The Ministry of Economics claims significant progress in the area of affordable housing, however, experts believe that the scale of the implemented projects is too small to significantly impact the situation. Despite dozens of completed activities, the shortage of apartments in the country remains acute.
The Ministry of Economics has prepared a report on the results of housing policy over the past two years. According to the document, out of 32 planned activities, 17 have been completed, writes Latvijas Avīze.
Among the achievements, the ministry cites the start of construction and renovation of social housing. It is expected that by 2029, the municipal fund of social apartments will increase by at least 1,952 apartments. Additionally, projects for the construction of 676 apartments with reduced rent, intended for residents who find it difficult to find affordable housing under market conditions, have already been approved in the regions.
However, experts believe that these volumes are insufficient to address the accumulated problems.
Advisor to the Latvian Association of Local Governments on economic issues Aino Salmiņš notes that even after the implementation of all announced projects, the housing deficit will not significantly decrease. In his estimation, to realistically improve the situation in the country, about 10,000 new rental apartments need to be built annually with the involvement of the state, local governments, and the private sector.
The report itself acknowledges that housing affordability has worsened in recent years due to several factors. Among them are the rising cost of living, increased EURIBOR rates, which have raised mortgage payments, and a significant increase in construction costs.
Particular attention was drawn to the mention that the "activities of the Housing Affordability Fund have been strengthened and additional funding has been provided." The problem is that the fund itself has not actually been created.
The idea of its creation emerged back in 2022 on the recommendation of experts from the Organisation for Economic Co-operation and Development. It was anticipated that the fund would help finance the construction of housing in those local governments that cannot independently solve the problem of apartment shortages.
The initial plan included funding of 100 million euros and the construction of more than 4,000 rental apartments by 2036.
Today, one of the main problems of the Latvian housing market lies not only in the lack of new apartments but also in the limited opportunities to attract long-term financing for the construction of affordable housing. According to Salmiņš, the Housing Fund could have become a tool for attracting European funds and accelerating the implementation of new projects.
He believes that disagreements between state structures have stalled the creation of the fund. According to him, various ministries were essentially competing for control over the project, resulting in the initiative not being realized.
As a result, there remains a noticeable gap between official reports and the real situation in the housing market. Despite individual projects and initiated programs, the issue of affordable housing remains one of the most pressing for both regions and large cities in Latvia.
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