ASSESSMENT OF EUROPEAN COMISSION’S REGIONAL POLICY IMPACT ON REAL ESTATE INVESTMENT IN A POST-SOVIET CITY: CASE STUDY OF SELECTED NEIGHBOURHOODS IN RIGA, LATVIA

Normunds Strautmanis, Maija Rozīte

Abstract


Europe 2020 strategy, the replacement of Lisbon strategy for jobs and growth, is an “umbrella strategy” for development of all policy areas in countries of European Union, EU setting concrete target aims to be reached until year 2020 that are ambitious than the previous Lisbon strategy. All other policies of European Commission, EC or Commission, are supporting the Europe 2020 strategy, including the EC’s regional.

Nowadays, growth and development at a local level within EU is seen as part of Commission’s regional policy aimed at contributing to the “umbrella strategy”. Its purpose is to help to achieve the overall goals of Europe 2020 strategy.  EC’s regional policy in point of fact is an investment policy meaning that largely it is being implemented through funding provision to the member states (of the EU). Aimed at reducing significant economic, social and territorial disparities between EU’s regions the regional policy supports job creation, competitiveness, economic growth, improved quality of life and sustainable development.

The purpose of the paper is to evaluate the impact of Commission’s regional policy on spatial distribution of real estate investment on a local municipality level. Riga, the capital city of Latvia, the largest city within Baltic States and one of the largest in the Baltic Sea Region, BSR has been chosen for the case study reflecting the tendencies of a post-soviet city.

The main task of the paper is to analyse the impact of EU funds invested on real estate investment made in a particular territory and thus to answer the question whether the regional policy goals are actually met at a local municipality level thus contributing to the literature aimed at evaluating EU’s strategy.

Availability of different EU regional policy funding options at local municipality level are analyzed followed by critical assessment of locally available EU funding policy, overview and analysis of EU’s funding invested in different projects in City of Riga for two consecutive years following Latvia becoming a member state of EU in May 2004 (until the economic downturn in 2008) and the spatial distribution analysis of real estate investment made and correlation analysis of EU funding invested and real estate investment made in a particular territory allowing to draw the conclusions of the paper.

Empirical analysis shows that the actual performance of the EU funding is in contrary with the EU regional policy and it is not possible to speak about cohesion in the case of Latvian capital in regard of EU funding invested.

Although many EU funding options are available both for municipalities and companies, the results obtained show that regardless of the clear evidence that following Latvia becoming a member state of EU has increased the amount of real estate investment in the city of Riga, the spatial distribution of the real estate investment made does not have a clear linkage to EU funds invested in the particular territory (neighbourhood) although it is possible to argue that EU funding invested to some extent (depending on the amount and typology) may multiply the effect of possibility of real estate investment being invested in that particular territory due to the increased competitiveness of the territory.

DOI: http://dx.doi.org/10.5755/j01.eis.0.6.1482


Keywords


Real estate investment; EU regional policy; neighborhood; spatial development; city of Riga

Full Text: PDF

Print ISSN: 1822-8402
Online ISSN: 2335-8831