The Cabinet of Ministers has approved additional funding of EUR 29.02 million for the continuation of the low-rent housing construction support program in 2025 and 2026.
The funds will be allocated from the Recovery Fund. Additionally, extra public funding of up to EUR 5 million will be directed to cover the value-added tax (VAT) costs for the projects.
Currently, seven loan agreements have been concluded for the construction of 446 apartments under the support program, and six more projects for the construction of 233 apartments are under evaluation. Contracts have been signed for projects in Bauska, Valmiera, Jelgava, Tukums, Ventspils, Cēsis, and Alūksne. The additional funding is intended for new projects—both those under evaluation, for which a positive credit committee decision will be made, and new projects, for which applications will still be submitted.
"There is satisfaction with the growing activity of local governments and developers in the development of low-rent housing projects. With the provision of additional funding for the continuation of the low-rent housing construction support program, we are helping to address housing availability issues in the regions, ensuring greater market dynamics for rental apartments, and creating a more flexible housing market. This will offer opportunities in regions with increasing and competitive employment prospects, boosting business activity and workforce attraction," says the Minister of Economics, Viktors Valainis.
With amendments to the low-rent housing construction support program, the implementation of a new investment 3.1.1.7 “Loans to real estate developers for the construction of low-rent housing” is being launched.
Favorable changes are also being made to certain program implementation conditions. For projects for which loan agreements will be concluded starting from 2025, there is an opportunity to receive a maximum capital discount of up to 30% of the ALTUM loan when the residential rental building is commissioned. There is no restriction on the commissioning deadline, although it is currently set until August 2026.
Reinis Bērziņš, Chairman of the Board of the Development Finance Institution ALTUM: “With ALTUM's support, the construction of seven low-rent homes has already begun in Latvia's regions, with nearly 450 new apartments in total. These projects are at various stages of construction or project preparation, and with them, we are approaching the program's goals both in terms of available funding and the number of apartments to be built. Thanks to this state support program, the long-awaited low-rent housing development in the regions has gained momentum, and local governments remain interested. Therefore, we positively assess the additional funding allocated to the program, which will allow the construction of more than 300 apartments within the program framework.”
To address the issue of insufficient housing stock in the regions and not limit the promotion of housing availability in municipalities with higher demand for rental housing, the restriction on the number of apartments to be built within one administrative territory has been removed (previously, this was 120 apartments in cities and 60 apartments outside city areas), as well as the restriction on approving new projects in the relevant municipality (when at least 90% of the rental apartments from the municipality's approved, initiated, and implemented projects are rented out).