Significantly higher rent increases coming in 2024
The general rise of costs is putting Heka under pressure to increase its rents next year. As a result of the increase in loan interest expenses and other costs, Heka’s 2024 rent increases will be significantly higher than up until now. It is likely that Heka is going to have to increase its rents by more than 10 per cent.
Heka operates on a cost-price principle, which means that all operating costs are covered by rents. Therefore, the organisation must collect enough rent to cover all construction, repair, maintenance and administrative costs. In previous years, Heka has managed to keep its rent increases moderate, on average at 1.5 per cent.
However, the current sharp rise in interest expenses has a major impact on Heka’s finances as the organisation carries a lot of debt. New construction is financed entirely and renovations mostly with loans.
Planned repairs to be postponed
Already this year, interest expenses and other costs have soared beyond what was expected and budgeted for. Renovations and other repairs make up a significant share of Heka’s annual expenses. For this reason, Heka has had to and will continue to need to postpone repairs planned for this year. Some of the repairs initially planned for 2024 will also have to be delayed.
Residents to be informed of next year’s rents in October
Heka’s 2024 budget, and rent determination based on the budget, will be finalised by the autumn.
Heka will submit the 2024 rents, budget and repair plans to the housing committees for their comments in August 2023. Heka’s Board will confirm the 2024 rents in October, and residents will be informed of their future rents in October. The new rents will take effect on 1 January 2024.