Ex­pert: mu­nic­i­pal­i­ties are in­ca­pable of at­tract­ing new res­i­dents

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One way to in­crease bud­get rev­enue for mu­nic­i­pal­i­ties is at­tract­ing new res­i­dents. This is a prob­lem in Lat­vian mu­nic­i­pal­i­ties, es­pe­cially in Jur­mala. «The city lacks cheap and ac­ces­si­ble hous­ing of­fers. This does not con­trib­ute to the at­trac­tion of new res­i­dents,» says real es­tate ex­pert Jev­genija Dmitri­cenko.

«One of the ways to in­crease bud­get rev­enue is at­tract­ing new res­i­dents – taxpayers – to live in in a city or re­gion. In ad­di­tion to labour op­por­tu­ni­ties, hav­ing a fi­nan­cially ac­ces­si­ble hous­ing fund within the ter­ri­tory of a spe­cific mu­nic­i­pal­ity is no less im­por­tant,» says real es­tate com­pany NIRA Fund board mem­ber Dmitri­cenko, adding that this is a prob­lem for cer­tain mu­nic­i­pal­i­ties, es­pe­cially Jur­mala.

52.7% of Jur­mala’s res­i­dents agree that one of the meth­ods to at­tract res­i­dents is build­ing houses for them to life, ac­cord­ing to re­sults of SKDS sur­vey in Jur­mala. 85.5% of re­spon­dents said new pro­ject apart­ment should be avail­able to a wider range of Lat­vian res­i­dents.

«Dis­cus­sions about the qual­ity of life of res­i­dents

liv­ing out­side Riga and its nearby cities come up ev­ery now and then. Peo­ple do, how­ever, use the cap­i­tal city’s in­fra­struc­ture to get to their place of work ev­ery day. Data shows that more and more peo­ple ex­press the de­sire to live out­side of Riga,» Dmitri­cenko ex­plains.

«This of­fers an op­por­tu­nity for res­i­dents of Pieriga and other nearby mu­nic­i­pal­i­ties to in­crease the num­ber of their res­i­dents,» she adds.

The ex­pert notes that Jur­mala lacks af­ford­able hous­ing of­fers. This does not help at­tract new res­i­dents to live there. «In­stead the city de­vel­ops ex­pen­sive and exclusive prop­erty projects only wealthy peo­ple can af­ford. The exclusive hous­ing seg­ment is af­ford­able to 1% of peo­ple in Latvia. With such an of­fer, it is hard to imag­ine any­one to af­ford to buy prop­erty there, let alone set­tle for life. Look­ing at it from the per­spec­tive of PIT, Jur­mala only loses from that,» says the ex­pert.

She is cer­tain that if Jur­mala of­fered hous­ing prices close to Riga’s level, de­mand would be high. The mu­nic­i­pal­ity should con­trib­ute to the de­vel­op­ment of such projects

on its ter­ri­tory and do ev­ery­thing it can to re­al­ize them as soon as pos­si­ble, with­out un­nec­es­sary bu­reau­cratic ob­sta­cles. «The mu­nic­i­pal­ity could co­op­er­ate with real es­tate pro­ject de­vel­op­ers in in­fra­struc­ture de­vel­op­ment mat­ters,» Jev­genija Dmitri­cenko notes.

It should be noted that En­vi­ron­men­tal Pro­tec­tion and Re­gional De­vel­op­ment Min­is­ter Kas­pars Ger­hards said: «PIT can­not be al­lowed to cre­ate a large fi­nan­cial bur­den for res­i­dents and serve to in­crease tax bur­den. At the same time, it is nec­es­sary to se­cure trans­par­ent rev­enue in mu­nic­i­pal bud­gets,» the min­is­ter told BNN. «Con­tin­u­ously grow­ing real es­tate tax bur­den is be­com­ing too high for all Lat­vian res­i­dents, es­pe­cially for peo­ple whose home is lo­cated in Riga, Pieriga or Jur­mala. Politi­cians and of­fi­cials in state and mu­nic­i­pal in­sti­tu­tions have not ex­pressed any po­lit­i­cal will to re­solve the real es­tate tax prob­lem. Fi­nan­cial bur­den con­tin­ues grow­ing un­rea­son­ably, cre­at­ing a risk for Lat­vian res­i­dents to lose their real es­tate prop­erty,» as men­tioned in a public ini­tia­tive On Can­cel­la­tion of Real Es­tate Tax for the Only Home pub­lished on Man­a­balss.lv.

Edijs Pālens/LETA

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