Votes on participation in the private-public partnership programme "Rental Housing for Latvian Professionals" promoted by the Ministry of Finance in 7 municipalities – Gulbene (48), Tukums (150), Jēkabpils (140), Liepāja (192), Daugavpils (120), Cesis (100) and Riga (174 + 558), which envisages the implementation of the programme by 2030, have ended with positive decisions of municipalities. Renārs Griškevičs, Chairman of the Board of the SJSC “State Real Estate”, the programme's implementer, says t
hat at least 924 units of affordable rental housing will be built for professionals in sectors of importance to the Latvian state and municipalities.
It is planned that with this programme, the Latvian State will for the first time be involved in the implementation of the autonomous functions of local governments by providing its own support to assist in the provision of rental accommodation through the co-financing of an affordability payment.
"I very much appreciate the great interest of local governments in this important programme for Latvia, when for the first time the public-private partnership model is introduced in housing construction. Together with the construction of the Ķekava and Bauska bypass, it will become the third largest private-public partnership project in the country. In partnership with the European Investment Bank, a EUR 300 million investment programme is planned in three lots. We plan that seven municipalities from different regions of Latvia will participate in the first lot, and within five years more than 900 families will be able to receive the keys to their new rental apartment. It is a significant contribution to the Latvian economy, to affordable access to modern rental housing and to the modernisation of public governance," said Minister for Finance Arvils Ašeradens.
Experts involved under leadership of the European Investment Bank have developed financial and economic calculations for the pilot project or Lot 1 of the programme "Rental Housing for Latvian Professionals". The municipalities were provided with individual calculations of the financial contributions needed to cover the affordability payment and the projected rental costs for the implementation of housing in support of the municipalities' demand on the high readiness plots of land selected for the programme. The plots of land selected for the implementation of the programme are in Liepāja (192 apartments) – 4, 5, 6, 7 Debess Street; in Tukums (150) – 54 Smilšu Street; in Daugavpils (120) – 103 Nometņu Street; in Cēsis (100) – 45 Festivāla Street; in Jēkabpils (140) – 3B Celtnieku Street; in Gulbene (48) – 2 Malienas Street; and in Riga (174) – Tīnūžu Street. In addition to these 7 decisions, in order to ensure the success of the PPP programme, taking into account the wishes expressed by Riga and the Council's decision made on August 20 this year, it is planned to restructure the programme and expand Lot 1 by adding the previously planned construction of 558 apartments in Lot 2 on land plots in Riga, 39, 41, 45 Mežrozīšu Street and 62 Ozolciema Street (after the relevant decision of the Riga Local Government). SRE will shortly submit a report to the Government to start preparations for the launch of the PPP procurement.
"After the SRE report is approved by the Government and based on the decisions of the local governments, we will conclude agreements with the local governments in order to launch the procurement procedure for the private partner next year. In parallel, work is underway in cooperation with the Council of Europe Development Bank and its team of consultants to implement the rental housing programme in Lots 2 and 3 also in other interested municipalities," says Renārs Griškevičs, Chairman of the Board of the SRE.
The aim of the programme is to create a replicable model that would enable the provision of quality, sustainable and energy-efficient housing at reasonable and affordable rents for the retention of existing professionals, young professionals and their families in sectors of importance to the Latvian state and municipalities, such as teachers, firefighters, police officers, military officers, state and municipal employees, etc. The pilot project is based on a "private partner designs, builds, finances, maintains, operates" model, with the public sector accessibility payment included in the state and municipal budgets from 2030, alongside home accessibility for the population. In addition, the programme provides that at the end of the project, municipalities acquire ownership of the land and the constructed housing units.
As reported, a letter of intent for the construction of affordable rental housing for professionals in 13 cities across Latvia was signed in 2024 by the SRE acting as a national representative for the implementation of the programme in Latvia. A total of 18 Latvian cities have expressed interest in participating in the programme, and 7 municipalities have decided to implement the project in Lot 1.
According to the decision of the Cabinet of Ministers of 11 June 2024, SJSC “State Real Estate” (SRE) has been entrusted with the implementation of the programme in Latvia. In July of last year, SRE entered into agreement with the European Investment Bank (EIB) on the necessary financial and economic calculations and provision of advisory services. For Latvia, this is the first advisory service agreement of such scale signed with the EIB, allowing also international institutional investors to finance the construction of affordable rental housing. More information on the programme "Rental Housing for Latvian Professionals" and the timetable is available on the SRE website at.
Currently, 110 projects with a total investment of EUR 410 million are being implemented under the guidance of SJSC “State Real Estate”. The SRE provides professional real estate management and maintenance for 419 building and structure properties, comprising 1049 buildings with a total area of 0.98 million square metres and also the land beneath structures with a total area of 585 hectares, and 3385 land properties with a total area of 937 hectares. The SRE is one of 17 Latvian companies that in 2023 received the highest platinum award as part of the Sustainability Index of the Institute of Corporate Responsibility and Sustainability, confirming the good governance and sustainability of its operations. The company was founded in 1996, the state holds 100% ownership and the Ministry of Finance is the holder of capital shares.
