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Local governments to receive €62.5 million for renewal of housing stock

Apartment blocks in Estonia. Photo is illustrative.
Apartment blocks in Estonia. Photo is illustrative. Source: (Postimees/Scanpix)

The Estonian government on Thursday approved the conditions for housing stock investments to be directed to local governments; from 2017-2020, the state will provide a total of €62.5 million for this project.

The government decided during its Thursday meeting that in order to facilitate the creation of jobs outside of Tallinn, the state must also invest in the living environment beyond the capital city, with special effort devoted to the renovation and construction of rental apartments in Ida-Viru County and Southeastern Estonia.

The measure will support the construction of new housing as well as the renovation of existing housing for use as rental apartments. The contribution rate will be up to 50 percent of eligible costs. The maximum grant will be €1 million per applicant this year and €2.5 million per applicant in subsequent years.

The local government applying for support must submit the project's financial analysis and the building's energy rating, illustrate the plan's suitability to the surrounding environment as wel as indicate the share of mobile workforce in the apartment building to be built. Applications for the construction of apartments in Ida-Viru County or Southeastern Estonia will receive extra points.

The Estonian Housing Sector Development Plan 2008-2013 provided for supporting an increase of at least 150 dwellings per year in municipal rental housing stock, however the plan ultimately went unimplemented.

At the time, the Ministry of Economic Affairs estimated that an additional 6,000 rental apartments were needed. The recently approved Estonian National Development Plan of the Energy Sector through 2030 similarly foresees the addition of 6,000 state-sponsored apartments for the establishment of an energy-efficient housing stock.

According to a survey commissioned by the Ministry of Economic Affairs and Communications regarding Estonian residents' attitudes and the housing market situation, 26 percent of respondents would be prepared to live in public sector-supported rental housing.

Editor: Aili Vahtla

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