Riga’s housing shortage creates opportunities for investors and developers
The city of Riga showcased its investment opportunities at MIPIM 2025, highlighting key sectors poised for growth, including affordable housing, tourism infrastructure and tech-driven industries.
One of Riga’s most pressing challenges remains the shortage of affordable and sustainable housing. Latvia has one of the lowest levels of social housing stock in the OECD, with less than 2% of total housing inventory available for rent, compared to the OECD average of 7%. To address this, the Latvian government, the Ministry of Finance, the European Investment Bank (EIB) and 18 municipalities —including Riga — launched the Rental Housing for Latvian Professionals programme.
The initiative aims to develop 2,260 energy-efficient, affordable apartments by 2030, with 1,000 located in Riga. Implemented under a public-private partnership (PPP) model, municipalities will provide land, co-finance rental subsidies and offer incentives to private investors. The approach involves bundling units, with each bundle comprising approximately 1,000 units and requiring capital expenditures of €100-€125 million.
Riga’s tourism sector continued its strong recovery post-pandemic, with visitor numbers rising by 15.8% in 2024. In response, the city prioritised two major investment projects: the development of a new Ro-Pax ferry terminal connecting Riga to Stockholm and Helsinki, and the expansion of high-end hotel accommodation. Despite a strong hospitality sector, Riga still lacks a significant presence of international five-star brands beyond Kempinski, prompting efforts to attract new investors.
The ambitious Rail Baltica project is reshaping Riga’s urban landscape, particularly around the Central Station area. Long underdeveloped, this district is now attracting significant investor interest for residential, hotel, and commercial real estate projects.
The city’s tech-driven economy is also expanding, with notable growth in ICT and shared service centers. Riga is fostering a vibrant startup ecosystem, supported by initiatives such as Startup House, which provides education, incubators, and accelerators. Additionally, the government is encouraging investment in life sciences, biotech, and medical research, building on Latvia’s strong pharmaceutical heritage.
Amid shifting geopolitical dynamics, Riga is also exploring opportunities in defense manufacturing and dual-use technologies.
Fredis Bikovs, director of the Riga Investment and Tourism Agency, emphasised that real estate development is integral to Riga’s economic growth, stating: “As Riga’s investment landscape evolves, partnerships between the public and private sectors will be key to unlocking the city’s full potential.”
Watch the interview with Fredis Bikovs in full here.
