Latvia cancels second round of affordable rental housing programme
Latvia has cancelled the second round of its affordable rental housing construction programme under a public-private partnership model. Most of the participating municipalities declined to continue due to unpredictable costs, LSM English reported on September 2.
Reasons for municipalities’ withdrawal
The programme aims to construct apartment buildings in the regions in order to provide specialists in various fields with affordable rental housing. Private partners were expected to be responsible for the design, construction and management of these buildings, while the state and local authorities would ensure that rents remained affordable in line with average income levels in the municipalities.
Alūksne municipal council chair Dzintars Adlers said that the local authority would not participate in the programme because its proposal proved too expensive for the municipality. At the same time, Alūksne plans to hold a separate tender for commercial operators on the site where housing was to be created under the public-private partnership.
In the Alūksne municipality, demand for nearly 50 rental apartments for specialists in healthcare, education, woodworking and agriculture is forecast in the coming years. Adlers noted that special conditions are needed to attract businesses to the eastern border regions.
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The first round of the programme continues
The Sigulda municipality also withdrew from participation. It explained the decision by long-term financial obligations and risks: if the apartments remain unoccupied, the local authority would have to cover the related costs. Gatis Konrads, head of the municipality’s Development and Investment Department, said that Sigulda would have expected a larger state subsidy.
The second round assessed the possibility of constructing rental housing in 14 cities. In August, 13 municipalities decided not to continue participating in the programme, after which the round was cancelled.
The programme is being implemented by the State Real Estate company together with municipalities and the private sector. Under the first round, 1,290 affordable rental apartments are planned to be built in six municipalities, with the first of them due to be handed over in 2030. A tender to attract a private partner for construction in these municipalities is planned to be announced in autumn; the contract is for 27 years.
