Strengthening Latvia’s Housing Affordability Fund
A 2020 OECD review of housing affordability in Latvia, Policy Actions for Affordable Housing in Latvia, recommended that the authorities establish a dedicated funding instrument to boost investment in affordable housing to address some of the country’s pressing and persistent housing challenges. Latvia’s establishment of a Housing Affordability Fund in mid-2022 is thus a welcome development in line with the OECD assessment and recommendations.
In the first phase, the Fund will aim to support the construction of new rental housing for middle-income households outside the Capital region. The Fund has initial capital from the Latvian Recovery and Resilience Plan (RRP) and the possibility of a state loan to complement its initial funding envelope. Beyond the RRP horizon of 2026, loan repayments from developers and a share of the rent paid by tenants of the newly built affordable dwellings will be allocated to the Fund to finance new affordable housing.
