Latvia plans significant additions to regional housing stock

At least 1,000 apartments are planned to be built in Latvia by 2030, with a total investment of €100 million, as foreseen in the agreement signed by "State Real Estate" (Valsts nekustamie īpašumi, VNĪ) with the European Investment Bank (EIB) on the implementation of a rental housing program in Latvian municipalities, VNĪ said September 4.

"This is the first time that a consultancy agreement of this size has been concluded with the European Investment Bank in Latvia to ensure that international institutional investors can also finance the construction of affordable rental apartments," said Finance Minister Arvils Ašeradens ("New Unity"). "Working together with highly qualified and experienced experts from the European Investment Bank will provide the public administration with new skills to successfully implement similar projects in the future."

The program is expected to significantly improve the situation in the regions, in particular in the cities where most economic development is taking place.

In cooperation with the EIB, several models for the implementation of the program will be discussed, institutional capacity at both state and local government level will be analyzed, a project selection strategy will be developed, a pilot project will be prepared and a draft public-private partnership agreement will be drafted, VNĪ said.

"We already see a great interest of local governments in participating in the program. At the beginning of October, we will conclude the Letters of Intent on the basis of the decisions adopted by the local government councils on the conceptual participation in the project," said Renārs Griškevičs, Chairman of the Board of VNĪ.

VNĪ will be the main representative of the public partner and will work together with the municipalities participating in the project.

This spring, 17 municipalities were interviewed and statistics were analyzed to produce estimates of future demand for affordable rental housing. The study confirms that the challenges facing Latvian housing policy are poor housing quality, overcrowding, low market activity, as well as the inaccessibility of mortgages to a part of the population. 

 

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