Self-imposed stumbling blocks
It is no secret that after the COVID-related boom in real estate, this market is currently stagnant. Of course, this prompts developers to think and strive to offer buyers more for the same money. However, there are also several objective factors that are slowing the development of the real estate market.
The impact of inflation and interest rates on the real estate market in Riga
One of them, of course, is the high inflation of recent years and high Euribor rates, which in turn dictate high interest rates. Both of these factors have complexly led to stagnation in the real estate market – it is understandable that high interest rates require a greater portion of the household budget to be diverted to debt repayment, yet inflation does not allow this, having caused an increase in the cost of living.
As a result, potential real estate buyers have to spend more money on daily living, leaving less for mortgage payments.
However, aside from inflation and international interest rates, which Latvia cannot particularly influence, there are also factors that Latvia can indeed affect. I will speak about Riga, as the operations of the '1 37 digital agency' are specifically related to the renovation of historic houses in Riga. The Riga municipality is increasingly discussing the need to bring people back to the city center, yet chooses to ignore how decisions made by the municipality itself hinder the development of Riga's historic center. This concerns decisions that have made the center of Riga an area that is simply uncomfortable for drivers and many residents.
The impact of bike lanes on commercial properties in the center of Riga: Are innovative solutions possible?
Similarly, shops cannot exist if customers cannot drive up and park in front of them, and not everyone will ride bikes, scooters, or take public transport. Therefore, there is no reason to be surprised that the establishment of bike lanes in the city center and the closely related removal of parking spaces on the streets have led to signs saying 'For Rent' in the ground floors of historic houses, where shops and offices used to be.
At the same time, the Riga City Council has chosen to ignore that Riga is suitable for cycling only six months of the 12 months in a year. In late autumn, winter, and early spring, bike lanes are used by at best one person per hour, and it is hardly rational space utilization in the city center. Perhaps a solution could be that during the cold months of the year, bike lanes could again become a place for parking cars at the edge of the street? That would be an unusual and innovative solution. Likewise – perhaps it would be possible for the Riga City Council, when making decisions about bike lane installation, to also decide on building a paid multi-storey car park or creating a parking lot in the area where a bike lane is being built? Such solutions could significantly enhance the tarnished splendor of Riga's center.
The impact of removing parking spaces on the viability of the center of Riga
I don’t even want to mention that the removal of parking spaces in the center of Riga is justified by a desire to free the center from cars and make the air cleaner. Neither of these goals is being achieved – there are not fewer cars in Latvia and Riga, but the removal of parking spaces leads to cars circling the block several times searching for parking, while simultaneously polluting the air around them. Moreover, the suggestion for everyone to switch to bicycles or public transport is only relevant if citizens are heading to a specific location and back home or to work. However, many people plan trips to the center to accomplish several tasks at once, and this often requires a vehicle, which has now become very difficult to park. Is it any wonder that offices and shops are moving away from the center, where there are no problems with access and parking? However, at the same time, this process creates an impression of abandonment and decline in many places in the center, despite the great architecture, an increasing number of well-kept buildings, parks, and cafes in the center.
To revive the city center, not only well-planned bike lanes are needed, but also comprehensive solutions. The sooner the Riga municipality understands this, the fewer obstacles there will be to overcome in the effort to revitalize the center of Riga and reassure residents that living in the center is comfortable and appealing.
