Expert: Poor Condition of Ida-Virumaa Real Estate Could Become a Security Threat

According to Jaanus Laugus, the head of Estonia's largest real estate office Uus Maa, the development of Ida-Virumaa with 130,000 inhabitants depends largely on the fact that specialists don't want to move there because the region lacks modern housing.

According to Laugus, entrepreneurs have noted for years that it is difficult to attract qualified workforce to Ida-Virumaa because the housing stock is outdated or not renovated at all, and younger people don't see themselves living in Khrushchyovka apartments. "Many Ida-Viru settlements and even towns have not had a single new apartment built throughout the independence period, because the normal real estate market doesn't work here. Without state or local government intervention, life in Ida-Virumaa will just stagnate, which is also a security issue – whether segregation deepens or whether development is more balanced," said Laugus.

"When the four-lane road reached Rakvere, business and housing development immediately took off there. Now is the right time to move forward with the four-lane road and build new rental apartments in Ida-Virumaa where educated specialists could move to. This in turn stimulates culture, economy, and other areas of life. This way it's finally possible to more broadly overcome the image of the periphery," said Laugus.

"But currently the outlook is unclear. Narva city has not built new apartments this century. Unfortunately, the city recently abandoned even building the only rental apartment and instead is building a sauna center and trying to find money to renovate the local church. By 2026, two rental apartments should rise on the border of Jõhvi and Kohtla-Järve, but that is very little for a county with 130,000 inhabitants, because nothing bigger seems to be coming anywhere else," added Laugus.

"In a sense, Ida-Virumaa is in a situation where the beak is open but the tail is closed. A normal real estate market doesn't work – there are few well-paying jobs because there's nowhere to live and vice versa. Currently, entrepreneurs don't dare build new apartments for sale or rent there, and old and tired property is still many times cheaper. For example, in November the median price per square meter of an apartment in Narva was 551 euros and it's difficult to compete with that," said Laugus.

"Ida-Virumaa needs a comprehensive solution and vision from the state – what will happen to the region next. Currently there is no clarity about which industries and jobs will remain, and new investments are quite easily halted – for instance, the oil plant. The green transition visions look nice on paper, but in addition there would need to be a practical approach – what people will actually get today and tomorrow," added Laugus.