Estonia plans 1,000 rental apartments in smaller towns

The Estonian government wants 1,000 new rental apartments built in county centres and small towns over the next few years, aiming to address a lack of development, ERR reports.

In the town of Türi, no new apartment buildings have been built in recent years, though local officials say there is demand for modern rental homes. The municipality last renovated a dormitory seven years ago and lacks the resources to build new apartment blocks.

“This building has 42 apartments, and 40 have been occupied all the time,” said Üllar Vahtramäe, Türi’s development manager. The remaining two are kept in reserve for unexpected demand. He said developers would be more likely to build if the risks were reduced, including the possibility that apartments might remain vacant.

The situation is similar in the county centre of Paide. Apartment buildings are being renovated and a few townhouses have been completed, but there has been no broad expansion of housing construction.

Paide Mayor Aivar Tubli said residents were interested in modern rental homes and that the city was ready to discuss the government’s plans. Local leaders support the initiative but do not want municipalities to cover developers’ losses if apartments cannot be rented out. Tubli said the city might work with a developer on ground-floor apartments for older people and could later buy them.

Infrastructure Minister Kuldar Leis said rental homes could help meet demand when industries expand outside major cities and need accommodation for specialists. The government hopes to work with the European Investment Bank, which could offer long-term loans at lower interest rates. Private developers would build the apartments, while municipalities could provide land.

Leis said the government had identified more than 130 possible plots after mapping municipalities’ interest, and that demand for the apartments was clear.