Count Pehr Brahe, governor general, gave a charter to the town of Salo in 1649 with a purpose to build a town at Satamakangas, near the old harbour site. However, the harbour area had become so low that the future town was decided to be transfered. A new and better place was found further north, at the present bay of Raahe. Having acquired the possession of the parish of Salo in 1652, Pehr Brahe renamed the town. It became Brahestad, or Raahe in Finnish.

The planning of the town plan for the purpose of building Raahe was given to the surveyor Claes Claesson. His town plan followed the ideals of the regular grid plan of the Renaissance. All streets were of equal width of 20—21 cubits or 10—11 meters. The market square stood by Rantakatu and the Town Hall behind the square. At the northeast corner of the town stood the church and the schoolhouse. Six blocks were realized of the first town plan, ie. the area surrounded by the present-day Koulukatu, Kirkkokatu, Saaristokatu and Rantakatu. The later expansion and changes of the town have held the ambitions of Claesson's town plan in respect until the beginning of this century.

The oldest picture still remaining of the town of Raahe, a drawing, dates from 1659. It shows that the town was surrounded by a so-called customs fence with two customs gates, the eastern one outside the crossroads of the present-day Brahenkatu and Reiponkatu and the southern one at the end of the Pitkakatu (present-day Kauppakatu) approximately by the present-day Koulukatu. The busy harbour of the town was located on the shore by the customs warehouse, the present museum.

There were two public buildings: a handsome, two-storey town hall with a tower, and a wooden church, whose building had already been started in 1651. The church was given a weatherboading already in 1684—1685. This is one of the earliest examples of boarding known in Finland.

The dwelling houses were made of logs. As a rule, they were built close to the street facing plot boundary, the long side and the ridge of the roof parallel to the street. The unbuilt part of the plot against the street was fitted up with a high, solid plank fence and a drive-in gate. The plots inside a block were not separated by fences. The houses usually had one or two rooms, most were of the two-room cabin type. Almost every house in the drawing of Raahe has the most remarkable novelty of the 17th century, the chimney. At the same time it was still quite common to have whole towns and villages with chimneyless houses, especially in Eastern Finland. Considering from the point of view of architectural history, at the time of its foundation Raahe was quite a modern town. As far as is known, no buildings exist from the 17th century.