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Baby bonus town suffers housing shortage

The Ostrobothnian town of Lestijärvi has seen record numbers of births since announcing a 10,000 euro ‘baby bonus’ for new arrivals. The scheme has been so successful that the town is now suffering a shortage of housing suitable for young families.

Image: YLE / Kia-Frega Prepula

With just 800 inhabitants, the town of Lestijärvi decided in 2012 that it needed to stem the tide of young people leaving to live in cities. The local council decided to offer to pay a total of 10,000 euros, payable in ten annual instalments, for each baby born in 2013.

That saw a huge upswing in births, with 14 born last year, compared to just one baby in 2012. According to city manager Esko Ahonen that trend is likely to continue into 2014, and the scheme is slated to run until 2016—despite a shortage of accommodation for the new families.

“It’s a problem that we don’t really have suitable homes for them,” says Ahonen. “Right now there are 3-4 young families who would like to come to the municipality.”

More towns paying baby bonuses

Lestijärvi is not alone in offering financial inducements to stem the flow of urbanization. According to the Association of Local and Regional Authorities (Kuntaliitto), around 70 municipalities across the country are offering some sort of reward to families who have a new arrival.

Some also offer goods or services, varying from an apple tree to the cost of the hospital stay for the baby’s birth.

“You could say that the baby bonus has stopped the flow of people out of the municipality,” says Ahonen. “Young families have preferred to stay in Lestijärvi, and some young couples have also moved here.”

One beneficiary of Lestijärvi’s largesse is one-year-old Leo Liimatainen. His parents lived in the town before the bonus was announced, and the first instalment of the money was paid into Leo’s account at the start of the year.

“It can be used for example for a family holiday in the summer,” says Leo’s dad Risto Liimatainen. “The money does not just go to Leo, it’s used for the good of the whole family.”