During the short period starting with the ownership reform in the 1990s the structure regarding ownership of housing in Estonia has dramatically changed from state owned to private owned. The possibility of returning properties expropriated by the Soviet Union to their rightful owners, and the ability to privatize dwellings and buy land, created a large number of property owners. On the other hand the rental market still remains underdeveloped.

This paper analyses and discusses on the matter concerning the need for public housing in Estonia. Public housing can be seen as a regulatory tool to cool down the overheating residential property market. Some of the aspects focused on: changes and developments in the Estonian housing market, current housing demand and affordability situation and finally factors which facilitate the need for social housing and provide developments in this field.