Although there is currently a shortage of affordable housing on the market, the situation is not yet considered to be at a crisis level.
The assessment of possibilities to increase housing affordability in Lithuania showed that the situation varies across Lithuanian municipalities. While the main problem in big cities is housing affordability, in small municipalities there is either no housing supply or it is of poor quality,” comments I. Andriulaitytė on the situation.
According to the minister, three target groups facing housing affordability problems are distinguished. The first – individuals with medium and low incomes who are not eligible for social support, the second – vulnerable households receiving social support, and – residents who own their homes but whose housing is outdated and energy inefficient.
The Ministry of Environment has submitted a draft resolution to the Government on the establishment of an inter-institutional working group. It will analyze the proposals presented in the study on possibilities to increase housing affordability in Lithuania and assess their implementation feasibility. A draft strategy is planned to be prepared by the end of this year, which is expected to be adopted during the spring session of the Seimas.
The ministry plans to pay much attention to more active involvement of municipalities and also aims to create a municipal housing segment that would become an additional part of the housing supply, positioned between social housing and market-priced rental housing, as subsidies alone, according to the minister, will not solve the problem.
“We plan to present several strategy models that could be applied in different municipalities. Some municipalities may have developers but face infrastructure provision problems, while others lack economic attractiveness and developers are not interested in building new housing, so ways to attract business need to be found. We see that the situation varies in municipalities and applying a single model would not be appropriate,” comments I. Andriulaitytė on the housing strategy being prepared.
The minister also drew attention to the renovation of apartment buildings, which is also very important when talking about housing affordability.
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According to I. Andriulaitytė, the 13th call for apartment building renovation exceeded expectations – 850 applications were submitted during it.
“The 14th call is planned to be announced in October this year, and we also have high hopes for it because the financing procedure will change – a mixed financing model will be applied,” says Environment Minister I. Andriulaitytė.
Vulnerable households will be financed from the Social Climate Fund. If fossil fuel is used in the apartment building, 80% support will be provided, and if the apartment building does not use fossil fuel – 50% support.
For residents who do not fall into the list of support recipients, a municipal renovation support index will be applied. Municipalities are divided into three groups: in economically strongest municipalities, support will be 15%, in medium ones – 20%, and in municipalities most in need of support – 25%.
Additional criteria are also provided for which additional funding can be obtained. For example, if residents want to upgrade heating and hot water supply systems, they are allocated an additional 5%, etc. The maximum support amount in municipalities most in need of support can reach 40%.
A call for partial renovation is planned to be announced in the first quarter of 2027.
These changes are expected to further stimulate renovation processes, and those residents who already have housing but it is energy inefficient will be able to enjoy a quality and safe life.
