Expert: municipalities are incapable of attracting new residents
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.