Expert: Without Subsidies, Builders Will Move to Other Sectors, Estonia's Housing Renovation at Risk
About half of Estonia's residents live in homes needing renovation, but EU funds are exhausted and subsidy applications are suspended for at least a year. Experts warn that the funding gap may drive builders away from the sector, leading to higher costs and lower quality.
Approximately half of Estonia's population lives in houses that require renovation, meaning about 10,000 buildings need to be upgraded in the coming years. EU funds for this program have been depleted, and the acceptance of subsidy applications is being paused for at least a year.
Kaspar Alev, head of the housing investment department at the Ministry of Climate, said that no subsidy competitions will be held this year, and a decision on next year will be made by the end of the year during state budget negotiations.
Jarek Kurnitski, a representative of the Centre of Excellence for Energy Efficiency, warned that without subsidies, builders will move to other industries. When subsidies become available again, everything will have to start from scratch, resulting in worse quality and higher costs for consumers. Furthermore, an entire economic sector could be lost.
The centre recommends that the government finance this period from the state budget and target funds to apartment associations that cannot take out loans – typically those outside major cities. Andres Jaadla, head of the Union of Apartment Associations, considers this approach unfair because apartment values are higher in Tallinn, but the difference is only realized upon selling the house.
The Ministry of Climate noted that in recent years, subsidy distribution followed a regional distribution principle. Particular concern was expressed about the low renovation rate in Ida-Viru County, where only 5% of buildings have been renovated.
