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Housing availability is a crucial precondition for economic development, impacting not only household well-being and population growth but also labor force mobility and the creation of new jobs. Housing availability also promotes societal participation in fostering economic growth by providing residents with the opportunity to actively engage in the labor market and reducing the prevalence of poverty and social exclusion," emphasized Minister of Economics Viktors Valainis.
To promote housing availability in Latvia, the Ministry of Economics has developed Housing Availability Guidelines for 2023-2027, which were approved by the Cabinet of Ministers on November 7th of this year. The guidelines include action directions, policy indicators, and a set of tasks, offering solutions to ensure housing availability for households with various income levels, including those with the lowest incomes, as well as making investments in improving the existing housing stock and promoting investments in the development of new housing.
After reviewing the housing availability situation in Latvia and considering the long-term experience of collaboration with local governments, I have concluded that the primary focus should be on increasing housing construction volumes in areas with growing business activity and labor force demand. This approach will help better respond to the increasing demand for housing, maintain housing prices at a level affordable to residents, and facilitate labor force mobility. At the same time, it is essential to be aware that rising housing costs and housing availability for low and middle-income households are challenges across all of Latvia. The aspects of depopulation and population aging are becoming increasingly significant. Therefore, future housing policy must also consider the housing needs of different age and social groups, ensuring sufficient state support for the construction of social housing," continued the minister.
The guidelines define four problem areas within which further action is planned to promote housing availability:
- Vulnerable individuals do not receive adequate or up-to-date support for housing accessibility issues; municipalities lack quality housing for assisting this target group.
- There is a lack of quality and cost-effective rental housing.
- New housing is being built insufficiently to meet the needs of residents for purchase or rent.
- Inadequate investments are being made in maintaining and improving housing.
Therefore, the guidelines outline the following four action directions with specific tasks to find solutions to support vulnerable population groups, households with moderate incomes, households with moderately high incomes, and improve the existing housing stock.
In order to support vulnerable population groups, there is a need to develop a new law that would replace the existing "Assistance in Housing Matters" law and cover categories of individuals (structurally disadvantaged persons, temporarily unprotected persons, socially vulnerable group individuals) who require municipal support for housing issues. The new law should also define quality criteria for leased premises, minimum requirements for shared spaces in cases where a municipal apartment does not have access to a toilet, shower/bathroom, and kitchen, etc. Similarly, a mechanism should be developed that allows a person to receive assistance in another municipality, not just the one where they are registered, if the person has a job offer/employment in another municipality. The law should also include conditions for the use of leased premises in cases where vulnerable persons, economically disadvantaged persons, or other vulnerable persons no longer meet the criteria that formed the basis for providing assistance. It is essential to emphasize that starting this year, municipalities will be able to receive support from the European Regional Development Fund for the creation of social housing throughout Latvia.
To provide support to households with moderate incomes, a support program for low-rent housing construction has already been developed. It is also necessary to develop a housing availability fund that will ensure the reinvestment of invested funding into the construction of future low-rent housing. It is also planned to evaluate the possibility of reducing the proportion of obligations related to long-term obligations of municipalities (previously 75%) in cases where the obligations arise as a result of low-cost rental housing construction, as well as to extend the maximum possible term of the State Treasury loan for municipal capital companies if the loan is used to ensure low-cost rental housing. Additionally, it is planned to evaluate the possibility of amending regulatory framework to allow for the use of building rights on municipal land for rental housing construction in specific cases. Simultaneously, there are plans to develop a modular support program for the construction of private houses in regions where there is no demand for multi-apartment building construction, but where there is a shortage in the residential housing stock.
To support households with moderately high incomes, it is planned to expand and improve the conditions for receiving support under existing home purchase support programs in regions and to ensure the availability of support in the form of loans and guarantees for real estate development for entrepreneurs operating in regions.
Regarding the improvement of the existing housing stock, it is planned to develop effective regulations for the management of multi-apartment residential buildings, provide accessible support for investments in the maintenance and renovation of multi-apartment residential buildings, provide support for energy efficiency measures in multi-apartment and private houses, simplifying administrative requirements in support programs. Additionally, there are plans to develop a standardized solution for improving the energy efficiency of serial multi-apartment residential buildings and provide investments in improving housing accessibility. The guidelines also include plans to develop a support program for the installation of elevators in multi-apartment buildings to improve accessibility.
By implementing the tasks outlined in the guidelines, the following results are planned to be achieved by 2027:
- Reduce the number of individuals registered in the municipal assistance register for housing issues to 3,200 (base value 7,215).
- Decrease the percentage of households for whom total housing-related expenses cause financial difficulties (very burdensome/slightly burdensome) to 69.2% (base value 75.6%).
- Increase the number of households for which affordably priced rental housing is available to 467.
- Increase the number of families with children who have received support in the form of guarantees for home purchase or construction to 32,800 (base value 10,365).
- Increase the number of large families receiving support in the form of grants for home purchase or construction to 2,400.
- Increase the number of new specialists and National Armed Forces soldiers receiving support in the form of guarantees for home purchase or construction to 9,000 (base value 885).
- Reduce the percentage of households indicating unsatisfactory housing conditions to 22% (base value 31%).
- Increase the number of housing units (buildings) with improved environmental accessibility to 340.
- Increase the number of newly accepted apartments in operation to 10,000 per year (base value 2,966).