Student housing prices expected to rise

The Ministry of Local Government and Regional Development demands that all landlords create separate deposit accounts for their tenants. Worst-case scenario is a considerable increase in rent on student housing.


– The proposed deposit scheme will lead to a substantial increase in expenditures for the Foundation for Student Life in Oslo (SiO). The worst-case scenario is that the rental prices are forced up to market prices, which will undermine some the purpose of student housing, sys Fredrik Refsnes, President of the student welfare body, Velferdstinget (VT).

The extensive amendment submitted by the Ministry of Local Government and Regional Development orders landlords to register separate deposit accounts for each tenancy. Today, the landlord may keep several tenants’ deposits in one account.

The main argument behind this is to increase the protection of the tenants’ rights and eliminate cases of landlords taking the money to cover rent owed without proper notice, the way they have the opportunity to do today.

– This will have serious consequences for those who are living in student flats, Refsnes says.

– A great challenge

As of today, SiO is administering approximately 6000 housing units with a joint deposit account. The proposed deposit scheme will mean that anyone wishing to rent a flat from SiO must register a separate deposit account. Each account will cost SiO between 300 and 500 kroner each, and SiO will also need to have someone administering the accounts.

The yearly expense is estimated at 2.5 million kroner.

Egil Heinert, Head of the General Board of SiO, is also worried about the consequences this will lead to. He says that the greatest challenge will be to keep this from having a negative impact on the students.

– We don’t want the increase in expenditures to affect the quality of the student flats, but we have to take this money from somewhere. The alternative will be to increase the rent, he adds.

Heinert emphasises that SiO is a welfare service and that they are operating with very low profits. Economic gain is not their aim.

– We have a maintenance fund which is used for renovation and development of our internet site, and we would rather spend the funds we have on developing welfare services than on administering deposit accounts. We are, after all, talking about more money than what the day-care centres are given for student specific measures, he says.

International students vulnerable

At the end of 2006, a total of 29 446 housing units were administered by the various student foundations in the country. Per Anders Langerød, President of the National Union of Students in Norway (NSU), stresses that SiO is not the only one to be affected if the proposed deposit scheme is passed. It will have great consequences for everyone who rents a student flat.

– Almost 30 000 students will be affected by this, and we are following this matter with a great deal of concern, he says.

The impact of the deposit scheme will be especially hard on international students, who are occupying as much as 40 per cent of the housing units in SiO. In order to be able to register a deposit account, you must have a Norwegian national identity number. This is an elaborate process which includes personal attendance at the national registration office, followed by at least a three week period of waiting.

– I really hope that this will not have an effect on the admission of international students, but I cannot rule it out, Heinert adds.

Fredrik Refsnes explains that the Velferdstinget in principle is positive to a deposit scheme that will protect the rights of the students out on the open market, but he feels that the student foundations are in exceptional positions and should be exempt from the proposed scheme.

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