An effective affordable housing policy: the development of a playbook for local authorities

Problem

The Lithuanian housing sector is characterised by significant regional disparities and fragmented housing availability across individual local authorities (Ministry of the Environment and Smart Continent, 2026). According to the study ‘Assessment of Opportunities for Increasing Housing Affordability in Lithuania’ carried out by the Ministry of the Environment, in 2024 the housing affordability index values in municipalities range from 32.84 to 73.44*. Although a Housing Affordability Plan has been drawn up at European Union level (European Commission, 2025) and the Ministry of the Environment of the Republic of Lithuania is preparing a national affordable housing agenda, there remains a critical gap between national policy and its practical implementation at local government level. Only 21 per cent of local authorities have incorporated long-term objectives for increasing housing affordability into their current strategic development plans.

This problem is significantly exacerbated by the specific structure of the Lithuanian housing market. The rate of private home ownership in the country exceeds 90 per cent, which is why the rental market in the regions is extremely ‘thin’ and underdeveloped – rented accommodation accounts for just 5 per cent of the total market (OECD, 2023). At the same time, social housing accounts for less than 1 per cent of the total housing stock, and in terms of this indicator, Lithuania ranks second from the bottom among the Organisation for Economic Co-operation and Development (OECD, 2023) member countries. For this reason, the supply of social and municipal housing in the regions is critically low or virtually non-existent.

This market imbalance and lack of tools give rise to three main challenges, which this project aims to address:

1. Lack of clarity regarding concepts and standards: there is a lack of clear, practical understanding, at both national and local levels, of what constitutes the basis of ‘accessible housing’.
2. Lack of processes and tools: local authorities lack systematic processes and methodological tools that would enable them to plan, manage and ensure the development of affordable housing in Lithuania’s regions.
3. Lack of alternatives for residents: due to the limited variety of housing types and a stagnant rental market, current and potential residents of these regions have no real choice, which directly reduces the regions’ demographic and economic attractiveness.

*On a scale of 0 to 100, where 0 means that housing is relatively unaffordable and 100 means that housing is relatively affordable.

Goal

The aim of the project is to develop a playbook enabling local authorities to assess their level of affordable housing and draw up a tailored action plan to effectively address housing supply challenges at local level.

Participants

2026/27

Andrėja Šlekytė

2026/27

Edgar Vladimirenko