Finland
Country Introduction
The Finnish legislation on planning and constructing was amended in 2000, when the Land Use and Building Act came into force. Overall responsibility for planning is vested with the Ministry of the Environment. The power of the local authorities was increased by the new legislation, although the government authorities may still closely control the local planning and land use. The legislation distinguishes between three types of plan: the regional plan, the master plan, and the detailed plan. There are also special regulations for detailed planning and plan implementation in the shore areas for holiday homes. This plan type is also called the detailed shore plan. In addition to the plans there are also two execution plans, the plot division plan, which is used for dividing a building block into plots, and the street plan for the construction of a street. Besides these plans, there is a local building ordinance in every municipality, which gives detailed guidelines and regulations for building in the municipality. In addition, the Government has the right to decide on the guidelines for the national planning policy. The planning system is hierarchical: a plan prepared in general guides the drawing of a more detailed plan, but a more general plan is not valid in an area with a more detailed plan.
Relevant Legislation
Land Use and Building Act and Land Use and Building Decree. (10/03/2008)
In Finland land use, spatial planning and construction are controlled by the Land Use and Building Act, which came into force in 2000. The Land Use and Building Act aims:
- to organise land use and building to create the basis for high quality living environments,
- to promote sustainable development,
- to ensure open planning and participatory processes,
- to ensure that a wide range of planning expertise is available.
These general objectives are supplemented by more specific objectives relating to controls over land use planning and construction. All of these objectives have been designed to help make living environments healthy, safe, attractive and socially functional, with the needs of different groups fully considered.
More detailed regulations and controls on land use and construction are included in the Land Use and Building Decree.
Click to download: Land Use and Building Decree (unofficial translation)
Click to download: Land Use and Building act (unofficial translation)
Relevant Websites
Finnish Ministry of the Environment (10/03/2008)
The Finnish Ministry of the Environment is responsible for environmental and housing policies, coordinating local authority planning, strategic administrative planning and the drafting of new legislation, and international cooperation in its field of activity.
www.finlex.fi/en/ (08/10/2008)
This website contains information about Finnish legislation, case-law, secondary legislation,International treaties and Government bills.
Brief Overview of Country System
Land Use Planning System in Finland (18/12/2007)
Land Use Planning System in Finland
The Finnish legislation on planning and constructing was amended in 2000, when the Land Use and Building Act came into force. Overall responsibility for planning is vested with the Ministry of the Environment. The power of the local authorities was increased by the new legislation, although the government authorities may still closely control the local planning and land use. The legislation distinguishes between three types of plan: the regional plan, the master plan, and the detailed plan. There are also special regulations for detailed planning and plan implementation in the shore areas for holiday homes. This plan type is also called the detailed shore plan. In addition to the plans there are also two execution plans, the plot division plan, which is used for dividing a building block into plots, and the street plan for the construction of a street. Besides these plans, there is a local building ordinance in every municipality, which gives detailed guidelines and regulations for building in the municipality. In addition, the Government has the right to decide on the guidelines for the national planning policy. The planning system is hierarchical: a plan prepared in general guides the drawing of a more detailed plan, but a more general plan is not valid in an area with a more detailed plan.
Regional planning: The counties have the right and obligation to prepare their own land use plans and create regional development strategies. The essential parts of county planning are the regional scheme, which indicates the objectives of development of the area, the regional plan that controls other land use, and the Regional Development Programme. The regional plan is focused on the important matters of land use in regional level. Its salient mission is to make the national land use objectives concrete and to reflect them into the municipal planning. In the regional plan the areas important for developing the region are allocated. Particular attention is given to ensuring an appropriate regional and community structure, to preserve landscape values and ecological sustainability, and to provide proper conditions for the business and the industry. The regional land use plan is prepared and approved by the County Council, consisting of municipal representatives in the county, and ratified by the Ministry of the Environment. In practice, the regional plan is prepared gradually for the different objectives and sectors, such as the networks of centres, environmental protection, suburbs etc.
Local planning: Traditionally the independent Finnish municipalities, both urban and rural, have had extensive rights to decide on the control and guidance of their own spatial planning and development. This is called municipal planning monopoly. Because of this monopoly the municipalities play a very important role in local planning and building issues. The key actor in a municipality is the local council. With local plans the council can decide on the location, size and quality of public spaces, housing, industries, services, green spaces, recreation and environmental protection areas, and traffic arrangements. The council holds full responsibility: local plans are not subjected for approval by central government since 2000. However, when plans are being prepared, consultations with regard to the national guidelines or otherwise broader issues have to be held with the Regional Environmental Centre, i.e. the state authority.
Generally, all building projects in the urban areas are based on a detailed land use plan. An increasing number of municipalities have also draw up legally binding master plans, which may control land use in the entire municipality or just part of it. A plan refers to a document about the planned land use of an area. It is drawn in the form of a map. The areas of different types of land use are shown on the map. In addition to the plan map there is a statement, which includes, e.g. the principles used in the planning process and the timing of its implementation. All plans also include written provisions about land use. All forms of local plans are normally legally binding after they have been approved by the Municipal Council. No plan implies a right to build as such; a building permit from the Municipal Building Committee is always needed. Planning is a task for the local authorities and the planning process is mainly started and directed by the authorities. When the real property owner has a special need for planning, it is also possible to start the process with the owner’s suggestion. In these cases the owner normally has to make a planning agreement with the municipality and pay at least a part of the costs of the planning process and of the infrastructure needed. However, all planning decisions are made by the authorities and the planning process has its normal stages.
Local Master plans: The local master plan can be fine-tuned according to municipal needs. The local council can decide to make either a more strategic or visionary master plan to coordinate the spatial needs of different sectors, or it can make a more specific one to guide building quite directly by binding regulations, in which case certain legal implications concerning the compensation for decreases in land value are created. The local master plan has to promote a well functioning and economically sound community structure, good access to services, and the conservation and maintenance of the natural and cultural heritage. The Land Use and Building Act also gives the council e.g. the right to determine the location of hypermarkets in order to keep inner cities lively and prevent urban sprawl. There are no regulations determining how long a master plan is effective, but the average age of a master plan is about 5 to 10 years. The implementation programmes are determined by the municipalities, which also finance the planning work. The planning is encouraged and supported financially by the Ministry of the Environment.
Local detailed plan: A local detailed plan is needed especially for dense settlement, i.e. in the areas in a need of planning for organising the land use, building and development. The plans are regulating the location of functions, the size and the type of buildings, as well as the formation of the townscape. Rather detailed regulations about the location and height of the buildings, building density, maximum number of buildings and storeys, construction materials, facades, roofs, parking, planting etc. are normally given in the plan provisions. The building right is usually indicated with a ratio showing the maximum floor area per the area of the plot. The size of the area of a detailed plan varies a lot, covering one plot, a block or a district. Because of the extensive participation in the planning process, the detailed regulations and the wide and cheap appeal possibilities the planning process is often very slow. When planning a first detailed plan for an area, there are usually no actual building projects. As the areas then are built, it is often noticed that the detailed plan regulations lead to non-functional building and the plan must be altered before building, as building must not be in violation to the local detailed plan.
A subdivision plan is also normally required in building blocks. The subdivision plan divides the blocks into building plots. A subdivision plan may be binding or directive. In the areas with a binding subdivision plan a building permission cannot be granted before the subdivision plan is approved, the plot is surveyed (subdivided) and legally registered in the cadastre. A binding subdivision plan is normally required in the cities. In the rural municipalities the detailed plans are normally prepared with a directive subdivision plan. In these areas a registration of the site is not required for a building permit.
The municipality must monitor the local detailed plans to ensure that they are kept up-to-date. When necessary, the authorities should take actions to revise outdated plans. If the plan has been in force for more than 13 years and remains unimplemented to a significant extent, a building permit may not, with some exceptions, be granted for the construction of a new building before the local authority has assessed whether the plan is up-to-date. This 13-year period may also be determined shorter or longer in the detailed plan, at least five years but not longer than 20 years. The local detailed plan is also used for building holiday homes on the shores and on the shoreline areas. Because the detailed plan for the shoreline still has special rules, it is also called a special detailed shore plan and it resembles the former shore plan (before 2000).
Plan implementation
Fundamentally the implementation of a plan is the task of the landowner in areas for private buildings, and the task of the municipality, State, or other public body in the areas for public buildings and public use. A detailed plan entails no obligation for the building of private plots but the municipality has the right to give a request for building and initiate expropriation. The landowner can also be obligated to build by agreement. Furthermore, if a detailed plan is prepared for a recreational or other type of private project the responsibility for implementing the public areas can be transferred to the private landowners. The responsibility can also be delegated to the landowners if the detailed plan can only be seen to benefit the internal needs of an area. The municipality has to draw up and keep up-to-date the local detailed plan as required by the development of the municipality or by the need to steer land use. When the plan has been ratified the local authority is in charge of implementing the streets and other public areas. The municipality is also responsible for the construction and maintenance of water supply and drainage in a detailed plan area. Connection to these networks is normally compulsory if a building has been built according to the plan. The municipalities are also responsible for taking care of the waste disposal in their area according to the Waste Disposal Act.
The municipality is normally responsible for the planning and implementation costs of public areas and for other constructions needed. According to the recently renewed articles in the Land Use and Building Act (valid from 1.7.2003) a landowner who gains a remarkable profit of a detailed plan may be obligated to pay compensation to the municipality for the infrastructure. The compensation shall, however, not exceed 60% of the increase of the value of the property.
Streets: Building and maintenance of the streets in the urban areas is normally the responsibility of the municipality. The landowner is obligated to give the municipality the area needed for streets according to the first local detailed plan without compensation or pay compensation for a street area. However, the area transferred without compensation shall not exceed 20% of the total land owned by the landowner in the plan area in question, or shall not be larger than the building volume permitted for the land remaining in his/her ownership.
Utilities: For joining and using the networks for water supply and sewer system the property owners have to pay, normally to the municipality. The connection fee is to cover the construction costs and the use charge covers the maintenance costs of the network and the sewage treatment plants. The basis of the using fee is the amount of water used in the property. In sparse settlement and shore plan areas, water services can be carried out without municipal networks. Construction, maintenance and paying for other networks serving the community, such as telephone, electricity and heat, are private matters. Sometimes conduits for telephone, electricity, heat, lighting and private and public drainage serving a property or community have to be built on private property. The property owner has to allow this, if the conduit cannot be built on public property at reasonable costs. The property so burdened is entitled to compensation for damages.
Building permits and restrictions: The principle rule for development in the urban areas is that it is not allowed without a detailed land use plan. Building regulation is based on the Land Use and Building Act. Each municipality is required to produce and require its own municipal Building Ordinance considering the local conditions in building. Planning and building control is the responsibility of the municipality. The master or detailed plans do not automatically imply the right to build. According to the Act, a Building Permit from the municipality is needed for new development and larger renewal projects in the areas with or without a land use plan. A Building Permit is also needed for a major change of use, e.g. when changing residential spaces to offices. Building Permit is granted by the municipal Building Committee, which in its decisions follows the building regulations and land use plans. If, in an urban area, a plan does not exist, the developer can ask the local authorities to start a planning process or apply for an exemption permit. Exemption permits can be granted by the municipal government or the Regional Environment Centre. Buildings may not be built in violation of the local detailed plan. Also the restrictions of the local master plan or the regional plan should be taken into account. Building on the shores and on the shoreline areas mainly demands a detail plan.
Possibilities to promote plan implementation
In addition to planning the municipality has a central position in promoting the plan implementation. In the areas owned by the municipality the plan may be implemented as the municipality wishes. This is one of the reasons why the municipality often acquires areas before planning them. Besides the planning agreements with the landowners the municipality can use many coercive measures for land acquisition and for promoting plan implementation. The landowners also have some measures for promoting the implementation (e.g. the right to coercive purchase of a part of a plot).
The possibilities to promote plan implementation can be classified in many different ways. All cannot be treated in this short description, only the most important or interesting measures have been shortly presented. The use of different measures varies from one municipality to another because the municipalities have a lot of power to decide on the measures used and in what quantity. In practice the municipalities often have given principles for the use of different measures. The following presentation aims to move from voluntary to more coercive measures.
Strategic purchase of land: In Finland the municipalities often own wide land areas, and land development is often done in the municipal-owned areas. The municipalities usually purchase land areas and real estates by voluntary transactions. In the beginning of the 1990’s a municipality acquired about 20 ha of land in a year on the average, more than 90% of which was acquired by voluntary sales or land exchanges. Nowadays the land areas for urban development are usually acquired before the land area is planned, because then the municipalities can buy the land at the price of undeveloped land. This means that the municipalities often also own a number of plots and building sites in the planned areas. These plots are usually sold or rented out. The share of development on the municipal assigned land is approximately 50% to 60% of all developments. By assigning the plots the municipality can carry out its housing and commercial policy plans. Most of the transfers have clauses, which require the purchaser to build the plot in a certain time period.
Restrictions and prohibitions on building or parcelling: In the Finnish legislation there are regulations, which aim to prevent activities impeding planning or plan implementation. The Real Property Formation Act forbids real property formation if the new real properties are not according to the effective plan, if the property formation complicates the implementation of the plan or plot subdivision, or complicates the future planning. In practice their significance is, however, minor and their necessity can be questioned. Building constraints are more important. If a real property unit is not formed according to the detailed plan with binding plot subdivision it cannot obtain a building permit. Further, all building activities and demolition of buildings demand a permit. In order to ease the implementation of the plans, it is also forbidden to build against the local detailed plan. Building can be prohibited also when the plan is being prepared. In a detailed plan the building of plots can be prohibited for a given time period, 3 years at the maximum. During this time the local building authorities have the discretion power to approve building permit applications with minor deviations from the plan.
Land use agreements: This topic is discussed in detail in the answer to the case.
Urban land readjustment: The objective of urban land readjustment is to promote the implementation of a detailed plan by organising the real property units, and to equalise uneven distribution of building rights to the landowners. The urban land readjustment procedure is legislated by the Real Property Formation Act. During the first five years, which the Act has been in force, not one single urban land readjustment procedure seems to have taken place. This may be partly due to the fact that the procedure was not incorporated into the Land Use Planning and Building Act, and the planners thus have little experience of its potential benefits. Therefore, it seems that the existing regulations are ineffective in meeting the needs of urban land readjustment, and further improvements are required.
Development areas: A new element in town planning is the possibility of the municipality to define special development areas where specific measures are needed, e.g. renewal, protection or improvement of an existing built-up area. Undeveloped areas can also be designated as special development areas where such is necessary due to the housing or business policy, and special development or implementation measures are required because of the fragmented ownership or property structure. In a special development area the responsibility for developing the area can be delegated to a body established for the implementation, and the benefits gained and the costs incurred from the development may be distributed between the municipality and the property owners in a separate urban land readjustment procedure. The municipality may also be entitled to collect a reasonable development charge based on the landowner’s gain and use pre-emption without restrictions on the acreage of the area. In addition, special supportive measures for the housing or business policy can be taken in the area. The use of the procedure has been studied actively in the municipalities but until now the use has been insignificant.
Reminder to build: A summons to proceed with the building process can be issued according to the building legislation. After the local detailed plan has been in force for at least two years, the municipality can issue an owner of a plot with a reminder to build, if the plot has not been mainly developed according to the plan. If the plot has not been developed according to the plan in three years after the reminder to build, the municipality is entitled to expropriate the said plot without special permission within one year of the end of the period reserved for building.
Expropriation (compulsory purchase; eminent domain): The property of a citizen is protected by the Constitution in Finland. The Constitution includes, among other things, the basic provisions for expropriation. The Constitution establishes that an act can only direct expropriation, which is required for public need with full compensation. Expropriation is usually executed for public needs and is based on a permit given by the government or on a confirmed plan. It is performed by the District Survey Office, and the compensation is the full price, i.e. market price, in some cases in planning areas excluding the rise in value due to the planning.
Besides the normal expropriation according to the Expropriation Act, a municipality or the State had the right to expropriate land for planning purposes according to the land use and building legislation. Although expropriation is easy, the method is rarely used: approximately less than 1% of land acquired by the municipalities is expropriated. This is because of its political unpopularity in the municipalities. Expropriation is mainly practised when acquiring land for common need, such as for street areas, parks and building sites of civic buildings.
Coercive purchase of a missing part of a plot: The coercive purchase of a missing part of a plot is the other example of the Finnish expropriation tradition where also others than the public authority may have the right to compulsory purchase. The coercive purchase of a missing part of a plot is used when a plot in a local detailed plan area or a plot according to a subdivision plan is owned by more than one owner as areal parts, i.e. the plot according to the plan belongs to two or more real property units. The possibility gains importance in the areas with binding subdivision plans, because in these areas it is forbidden to build if the plot is not formed according to the plan, registered in the cadastre and owned by one owner. Coercive purchase is used if the owners of the areal parts of the plot cannot reach unanimity on the transaction. The biggest problems are often the purchase price, and the question who should buy and who should sell. When purchasing, the landowner who owns the most valuable part of the plot, both the land and the buildings included, has the first right to purchase. Also the municipality has a special right to purchase a part of a plot in an area with a local detailed plan and subdivision plan. If none of the landowners has applied for the right to purchase the missing parts of the plot in one year after adopting the binding subdivision plan, the municipality has the right to purchase all the parts of the plot. When the municipality informs the landowner of the coercive purchase, the landowner has 60 days to apply for the purchase right. Correspondingly, in some cases the municipality also has the duty to purchase a part of a plot. The prerequisites for this are that the landowner is not able to use his land in a way that would bring reasonable profit to him. In this case the municipality has the duty to purchase the land within one year of the subdivision plan coming into force, if none of the owners of a part of the plot has used his right to purchase the land. The purchase duty may emerge, for example, if a small part of the landowner’s area is left on the other side of a new street, and the person who owns the biggest share of this plot has no interest in building. The purchase duty and the municipality’s right to expropriate a plot have rarely been practised.
This text is an abridgement of the chapter “Planning and building” written by Erja Werdi (Hakkarainen) in the book Real Estate in Finland (2003)
Prof. Kauko Viitanen