Budget rental building project submission launched in Latvia

Application for regional low-cost rental building projects has started. It is a state aid scheme that hopes to address housing problems, as well as to attract workforce to municipalities. The first 300 apartments are expected to be built in the next two and a half years, and 15 property developers are currently interested, Latvian Radio reported on November 23.

Over the last ten years, new rental houses have been built only in Rīga and its vicinity, and other big cities. In the meantime, there is little choice of new and energy-efficient housing in the regions.

Therefore, the Ministry of Economics has developed a support program for the construction of 700 new low-budget rental apartments in the regions. New housing will be intended for households unable to purchase apartments on market terms, but not qualifying for disadvantaged status.

"At first, there won't be a lot of [apartments], but we look forward to continuing over the coming years, extending this housing fund and ensuring that part of that rental income returns to the housing fund. We hope to continue with this program certainly because in Europe, a large proportion of the population lives in overcrowded housing, which is not in line with today's quality of life requirements. And the other: we have a large part of the housing built in Soviet times in buildings that are not even viable to reconstruct. These buildings will have to be abandoned over the years, changed to new housing, so that the focus will certainly not be lost in the coming years,” said Ilze Indriksone (National Alliance), Minister for Economics.

This week, the development finance institution Altum began accepting applications from real estate developers for the state aid project.

Until now, 15 property developers in Valmiera, Alūksne, Liepāja, Ventspils and Ogre have consulted on the project.

“We think first applications could be expected in the coming month, an optimistic scenario would be – even in the next couple of weeks. One of the things developers would have to do before the applications were submitted – the municipality that has the desire to build a rental house should receive an authorization agreement. A major goal is to approve a project on construction of 700 apartments by June 30, 2026, of which at least 300 apartments would have been built. I think there will be no problem approving projects by this deadline,” said Reinis Bērziņš, chairman of the Altum board.

The Latvian Association of Local Governments estimated that this program is needed in almost all municipalities as the residential fund outside big cities is in poor condition.

“Such low-cost rental apartments are one of the tools for attracting human resources in the regions. It also promotes labor mobility, and municipalities themselves can also form a specific line of specialists. Of course, municipalities have an interest in attracting new workforce and supporting new families,” said Ella Pētermane, spokeswoman for the association.

The average area of the apartments is expected to be around 50 square meters. Rent per square meter – up to five euros, but can be increased annually in line with inflation. The total amount of funding for the program is limited to EUR 43 million. It is funded by the European Union Recovery Fund.

Seen a mistake?

Select text and press Ctrl+Enter to send a suggested correction to the editor

Select text and press Report a mistake to send a suggested correction to the editor

Related articles
Most important