42.9 million euros for the construction of low-rent housing in the regions
In a few weeks, EUR 42.9 million in support for the construction of low-rent housing in the regions will be available, Economy Minister Ilze Indriksone (NA) said in a webinar on Thursday. The support program is designed to address market imperfections and provide quality and affordable rental housing in the regions for households that cannot afford housing at the market price due to insufficient income, explained Indriksone. The Minister of Economy emphasized that a large part of Latvian households do not have the opportunity to rent quality housing at the market price due to insufficient income. Also, Indriksone stated that it will be possible to apply for support in all regions, except for Riga and Pieriga. “Lack of apartments is a significant problem in the regions, entrepreneurs are running out of workers, and this is hindering development. We, the Valmiera region, will start this program and build multi-storey wooden houses, which will be another novelty. I am sure that people will appreciate this program,” said Jānis Baiks, the chairman of the municipality council, sharing the experience of the Valmiera region. The support program is intended for the construction of rental houses outside of Riga, Jūrmala, Baloži, Ķekava, Olaine, Mārupe, Babīte, Salaspils, Stopinių, Garkalne and Carnikava. Reinis Bērziņš, chairman of the board of JSC “Development financial institution “Altum””, said that this support program will be attractive to developers, as a 30% capital discount or a 0.69% rate for loans for 30 years will be available. The support program has been developed as part of the Recovery and Resilience Mechanism plan, and for its implementation, funding of 42.9 million euros is available, and this funding is intended to build 700 low-rent apartments in the regions. The support program will run until June 30, 2026, and it is expected that 300 apartments must have been built by this date. In the program, support for real estate developers for the construction of rental housing will be provided by “Altum” in the form of a long-term loan of up to 30 years and a capital discount of up to 30% of the total eligible costs of the project. In order to receive the capital discount, certain conditions will have to be met, for example, the quality requirements of the residential rental house and a certain amount of rented apartments. Agita Fernāte, senior reporter of the Housing Policy Department of the Ministry of Economy, informed that a 30% capital discount will be due if the house is put into operation by August 31, 2026, but after that date there will be a 25% capital discount. For buildings with up to nine apartments, 100% of the apartments will have to be rented to receive support, and for larger buildings – 90% of the apartments. The eligible costs of the construction of the building shall not exceed 59,477 euros without value added tax, but the average area of the apartment shall be 52 square meters. Buildings must have at least three apartments or more. Also, in order to receive support, project developers will have to make at least 5% of their own investment, Fernāte added. The support program does not limit the range of real estate developers and the support will be available to both commercial companies and cooperative companies, capital companies controlled by a public person or public-private capital companies.
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