The rental market and the construction of new projects in the regions should be promoted.

The availability of housing suitable for families is planned to be promoted with new support measures to promote the rental market and the construction of new housing projects in the regions, it was concluded in the discussion organized by the bank “Citadele” in cooperation with the Ministry of Economy and the financial institution “Altum”. Families do not have access to suitable housing, so this discourages the desire to form large families. If suitable housing were available, 55% of families would want at least three children, according to a survey by bank “Citadele” and research agency “Norstat”. “A roof over your head and a job – we see from experience that these are the most important things for the peace and growth of the family,” admitted Inga Akmentiņa – Smildziņa, head of the Latvian parents’ organization Moms and Dads. “We observe that parents feel responsible if they are not able to provide each child, especially teenagers, with their own space. Parents do not always want to buy their property, they would like to rent a living space, but the rental market is poorly developed and the prices are not adequate, so it is often cheaper to buy I invite you to update support for single-parent families, as there are many of them in Latvia and support is equally important, and to promote financial literacy at the national level savings”. Economy Minister Jānis Wittenbergs emphasized in the discussion that the housing stock is old and the biggest problem is that since independence only 4% are newly built houses. In addition, most of them are in Riga, while the development of new housing projects in the regions is very low. “The issue of housing is one of our priorities, as it is the basis of both demography and economic development. We intend to solve this issue in three directions – improving the existing housing stock and developing the rental market, promoting the construction of rental houses, which is particularly relevant in the regions, as well as developing new housing alongside industrial centers. It is essential, of course, not only to continue the energy efficiency program by renovating houses, but also to build new buildings. That is why we are working on new support instruments and programs that will promote the development of real estate and rental markets in the regions,” said the Minister of Economy . Ineta Ventniece, the representative of the largest renovated multi-apartment building in Latvia, shared her experience gained during the renovation of a 180-apartment building in Piņki, Babites district. She revealed that the road to making a decision, convincing the neighbors of the need for the project, was long, however, the result is pleasing to every inhabitant of the house – an orderly environment, insulated and visually renovated building. “The issue of housing affordability is one of the bottlenecks in the development of the city. We concluded that the demand for rental housing exceeds the supply seven times,” admitted Jānis Rozenbergs, the chairman of the Cēsu County Council. “There is a difficult situation in the real estate market in the regions – there is a desire and opportunity to buy or rent, but there is nothing. There are also jobs, and entrepreneurs want to invest and develop, but there is no housing for employees. To build new housing that could be rented out to the residents of the regions affordable price, developers need loans for a long term and with a good interest rate. State guarantees for real estate developers to build rental houses in the regions, to allow the built houses to be rented out and sold at a good price,” said J. Rosenbergs. The readiness to introduce new support instruments to promote the construction of new housing in the regions was confirmed by the representatives of the state development financial institution “Altum”.

Already existing support tools for both housing purchase and energy efficiency improvement have proven their effectiveness, and residents are actively using them, the minister said. Chairman of the board of “Altum” Reinis Bērziņš admitted: “So far, 14.5 thousand families with 21 thousand children have used the housing guarantee program. With state funding of approximately 27 million euros, we have issued guarantees in the amount of 108 million euros, which has helped families to buy homes in general for 977 million euros. This is a good example of how the state can achieve an impressive result and improve housing affordability. In addition, the program has been supplemented and can be used both for families to buy a larger home and also during the expectation of a child, as families with many children will also be able to use the grant.” 70% of the mortgage loans of “Citadele” bank have been issued to families with children and 50% of them are guaranteed by “Altum”. Anna Fišere-Kaļķe, head of services of “Citadele’s” private persons directorate in the Baltics, emphasized that property price and liquidity are essential factors for obtaining a mortgage loan. In new projects, credit options are wider, however, the offer of new housing is limited and about 50% of transactions are with Soviet-era type housing. “Regular, transparent and sufficient income is a more significant obstacle to obtaining a mortgage loan. In general, families take loans thoughtfully and carefully evaluate the price, area and location of the property. The emergency situation has also changed habits, as 80% of customers and potential customers submit mortgage lending requests digitally, without going to the bank, but it does not arrive until the property is purchased, because it waits. This can also be partly explained by how convenient and simple this service has become – at the moment, the client of any bank can fill out the application, and the documents are automatically collected from various registers, until with that, the application process takes ten minutes, and you can get an answer within a day,” said Anna Fišere-Kaľke. In order to decide on the growth of a family, suitable housing is an essential prerequisite for the majority of the population. 29% would decide to increase their family if they had the opportunity to buy their own, while another 32% say they would do so if they had the opportunity to buy a larger home than the current one. 2% for the growth of the family would decide if there was an opportunity to rent an adequate housing. Only 31% state that housing has no meaning in family planning.

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