S. Gentvilas: the state intends to increase housing affordability, expand the rental market

The Ministry of the Environment will work this year to make housing more affordable and to expand the rental market, says Environment Minister Simonas Gentvilas.

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Feb 9, 2024, 1:01 PM, atnaujinta Feb 9, 2024, 1:02 PM

He says the state needs to pay more attention to strengthening housing affordability.

„The state has not identified that there is an object of public interest: that housing should be affordable, that the population should have housing of the right standard, that homelessness should also be a problem of the state,“ S. Gentvilas said on Thursday at the real estate conference Core.

„We need state intervention in several directions,“ he said.

According to S. Gentvilas, first of all, it would be necessary to facilitate the ownership of housing and normalise the possibility of purchasing housing with a smaller share capital, primarily in big cities.

He also pointed out that the housing support scheme should be reoriented from the regions to the cities.

„Where the real housing affordability problem is,“ the Minister said.

He said it was also essential to strengthen rental opportunities in Lithuania.

The rental market currently needs to be more favourable for investors. Mr Gentvilas said it is unsafe for families with children who want to rent long-term, as there is no guarantee that the landlord will disproportionately evict or raise the rent.

„We need to protect and tell people that buying a home is unnecessary, but it must be safe to rent. There must be options for long-term private rented housing (...) so that if the owner wants to sell off the property, the state buys it and maintains the resident's housing,“ Mr Gentvilas said.

He added that it is also proposed that more instruments be given to local governments to shape housing policy.

„The third direction is the creation of municipal instruments because from now on, the municipality, when it manages the land, must go into private partnerships with property developers and talk about creating a supply of affordable housing both in cities, where it is very hot and in regions, where there is no supply,“ said S. Gentvilas.

The Minister referred to a study by the Organisation for Economic Co-operation and Development (EBPO), which revealed that housing in Lithuania has become the most expensive in recent times and that there is a lack of social housing.

In addition, he pointed out that 94% of the country's housing is privately owned. „On the one hand, this is good because the owner will always defend this country, but on the other hand, is it proportionate that 94% of the housing stock is privately owned?“ the Minister said.

According to the Minister, among other things, 15% of expenditure is spent on housing in Lithuania, which means that many people do not have the means to buy and improve their homes.

„Inflation is high, and housing standards are low. And it is obvious to us that we may not have slums like other developing countries, but in principle, we need to look at how to upgrade the housing in Lithuania,“ he continued.

According to S. Gentvilas, from this year, a housing policy group has been established at the Ministry of Environment, and the Ministry of Finance allocated funding to prepare Lithuania's housing strategy.

Announcing other future changes in the regulation of the real estate sector, Mr. Gentvilas said that the development of the Building Code will continue, the number of building permits will be reduced in line with the EBPO recommendations, and the number of building certificates will be consolidated.

In addition, in the spring session of the Seimas, the Ministries of Environment and Culture intend to propose that construction in areas listed for heritage protection should not require a permit from the Department of Cultural Heritage, which will only carry out an assessment.

The Minister also said that in the spring, Seimas will be asked to reform garages, gardeners' and other associations and to create a new legal form for the ownership and management of common-use facilities.

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