The application round for rental housing grants will begin in spring


The Minister of Economic Affairs and Infrastructure of Estonia, Riina Sikkut, signed a regulation that states the conditions of the rental housing development grant. In spring, an application round will open for the development of about a hundred new homes all around Estonia.

Foto: Rivo Veber
Foto: Rivo Veber

“Small towns have an acute shortage of modern rental housing, although the demand is high,” says Minister of Economic Affairs and Infrastructure of Estonia Riina Sikkut. “It is important to provide people who don’t currently have the possibility to buy a property or who just need a temporary home opportunities to build a home in smaller regions. Investing into modern and energy-efficient housing in county centres and small towns is necessary from the regional political view so that all specialists and employers don’t move into larger cities.”

Minister added that creating new housing developments outside Tallinn and Tartu’s ‘golden circle’ is almost impossible under market conditions so state support is needed. “So far, rental housing projects developed with state and local governments’ assistance have all been success stories. I deem it necessary that much larger sums from the state budget should be allocated to the rental housing programme in the coming years,” Sikkut said.

Five million euros have been allocated from the state budget for rental housing development and renovations. The maximum grant will be 50% of the cost of the project, but not exceeding one million euros per local government. Local governments outside of Tallinn and Tartu and the municipalities bordering them can apply for the grant. Local governments can get private investors involved as well. It is estimated that the grant will help to provide approximately 100 new rental homes for 200 people throughout Estonia.

The grant can be applied for both the construction of rental housing and the reconstruction of existing buildings as rental housing. The new application round focuses more on the projects’ spatial impact assessment and the implementation of the principles of quality space, as well as ensuring the security of electricity supply.

The application round will be conducted by the Enterprise Estonia and KredEx joint agency and will open on 3 April. You can find more information on grants on our website and you can view the regulation at Riigi Teataja.

Local governments could apply for state rental housing grants from 2017 to 2019 when the state invested 19 million euros into rental housing stock. Investments were made primarily in regions suffering from market failure and where the supply of rental housing did not meet the needs of households. The grants helped 13 new buildings be constructed and 8 buildings reconstructed. An overview of the rental houses constructed with the grants can be found on the MKM website.