Latvia

In Latvia, the housing market is characterized by a high home ownership rate, reaching 83.7% as of 2024, while only about 12% of households rent their homes. This is significantly lower than the OECD average for rentals. The rental market remains underdeveloped, mainly consisting of Soviet-era housing. The median price per square meter to buy an apartment in Riga is approximately €2,640. New housing prices have surged by 11.4% year-over-year, while secondary housing prices have dipped slightly. Publicly owned housing in Latvia is primarily allocated to low-income and vulnerable populations through social housing programs. Social housing accounts for less than 5% of the total housing stock and is managed by municipalities. It is not the same as all public housing, as social housing specifically targets low-income groups and is non-privatizable, whereas other public housing might not have these restrictions. Latvia's social housing sector faces challenges, including limited stock and funding, and there is a need for policy improvements to address demographic shifts and economic disparities. Despite these challenges, there are initiatives to enhance social housing quality and accessibility.

In Latvia, the housing crisis is characterized by a severe shortage of affordable housing, particularly impacting low-income and vulnerable populations. The rental market is underdeveloped, with only about 12% of households renting, significantly lower than the OECD average. This leaves many without access to affordable housing options. The average price per square meter for buying an apartment in Riga is approximately €2,640. New housing prices have risen sharply, increasing by 11.4% annually, while secondary housing prices have decreased slightly. Social housing, which targets low-income groups, accounts for less than 5% of the total housing stock and faces challenges such as limited stock and funding. Affected groups include low-income households, families, and young professionals who struggle to find suitable and affordable housing. Many are forced to live in poor-quality housing or distant from their workplaces. The "missing middle" households, who are ineligible for public support but still cannot afford commercial mortgages, are also significantly impacted.

The Latvian government is actively addressing affordable and sustainable housing through several targeted strategies and programs. In 2023, Latvia approved Housing Availability Guidelines for 2023–2027. These guidelines set clear objectives: increasing housing construction in high-demand areas, maintaining affordability for low- and middle-income groups, and emphasizing energy efficiency and sustainability for both new builds and the renovation of existing stock. The policy also considers demographic trends, like an aging population, and seeks to provide adequate housing across different social and age groups. Key recent targets include the construction of up to 2,260 new affordable rental apartments by 2030, with a minimum target of 1,000 units, particularly for public sector employees and families. The establishment of the Housing Affordability Fund (Nodrošinātas mājokļu pieejamības fonds) is a major financial instrument. This revolving fund, supported by national and EU resources, incentivizes developers with capital rebates and aims to finance ongoing affordable rental projects, focusing initially on middle-income households, especially outside Riga. Municipalities play a significant strategic role in planning and implementing these investments. Latvia is also partnering with the European Investment Bank (EIB) and the InvestEU Advisory Hub to develop eco-friendly, energy-efficient housing. Public-private partnerships are encouraged to maximize funding and expertise for both new construction and improvements to the existing housing stock. These efforts are designed to make affordable, sustainable, and energy-efficient homes more accessible nationwide and to address Latvia’s housing shortage and climate objectives.

Housing cooperatives in Latvia mainly function as non-profit associations of apartment owners, with their key role being the management and maintenance of multi-apartment buildings. These cooperatives operate under specific Latvian legislation, emphasizing voluntary membership, mutual economic interest, and democratic governance, yet they are distinct from rental or social housing and do not significantly contribute to increasing rental housing supply. The share of housing units managed by cooperatives is relatively modest. While direct recent statistics are limited, legacy cooperatives that arose during and after the Soviet era are largely responsible for the administration of privatized apartment buildings, rather than for the creation of new cooperative housing or affordable rentals. In Riga, a substantial portion of multi-apartment buildings is still overseen by these owner cooperatives, but as a form of management, not new tenure or development. There are no substantial national programs directly promoting new cooperative housing construction; current policies focus more on boosting affordable rental housing and renovating existing housing stock. Government policy and investment primarily address the lack of affordable social and rental housing, with efforts targeting municipal housing construction, renovation, and expanding rental options for vulnerable groups. Cooperative housing is not a significant focus of recent national housing strategies, which prioritize affordability, sustainability, and energy efficiency in other tenure forms. Thus, housing cooperatives in Latvia remain a legacy management model with limited new development activity and a minor share in overall housing policy and market dynamics.

In Latvia, several key individuals and organizations have actively voiced the need to address the housing crisis and build more affordable, sustainable housing. Notably, President Edgars Rinkēvičs has publicly highlighted affordable housing as a critical solution for improving Latvia’s demographic situation, stressing the difficulties families face with mortgages and the need for targeted benefits. From the government, Latvian Minister of Finance Arvils Ašeradens and Minister of Economics Viktors Valainis have emphasized the importance of public-private partnerships and innovative financing models to expand housing for professionals and public sector workers. Key organizations include the Latvian State Real Estate Company (SRE, previously known as VNI in some contexts) and the development finance institution ALTUM, which are directly involved in building affordable rental projects across multiple cities. The SRE acts as the national representative for the government’s affordable housing program, while ALTUM provides financing and support to developers. Collaboration partners from academia could include research institutions like the University of Latvia, which can contribute expertise in sustainable urban development and housing policy. In the real estate sector, local developers and municipal housing companies, as well as emerging green building startups, are essential partners. NGOs specializing in housing rights and social inclusion are also important, particularly those advocating for vulnerable groups and promoting energy-efficient housing solutions. Together, these actors form a network capable of driving change in Latvia’s housing market.