A year ago, in preparation for the extraordinary elections of the Riga City Council, parties and party associations promised a better life to the people of Riga if they would be elected. In reality, however, public transport in Riga is still more expensive and housing costs higher than, for example, in the Lithuanian capital Vilnius and the Estonian capital Tallinn.
Last year, before the extraordinary elections of the Riga City Council, the Latvian Russian Union (Latvijas Krievu savienība, LKS) promised free public transport to Rigans. Development/For! and the Progessives (Attīstībai/Par!, Progresīvie), in turn, were ready to make Rīgas satiksme a company whose main goal would not be profit, but to provide cheap, convenient and modern transport in the interests of the city's development. New Conservative Party (Jaunā konservatīvā partija, JKP) promised to expand the range of discounts on public transport, while Harmony (Saskaņa) estimated that from 2021 public transport in Riga could be provided free of charge to all residents under 24 and over 64, as well as the unemployed for a period of 12 months.
Experts from Swedbank's Institute of Finances have calculated that Riga is still the leader in terms of public transport costs compared to neighboring capitals.
A family living in Riga (two adults and two children) has to spend 100 euros or 5% of their monthly income on public transport every month, while in Vilnius it costs 64 euros or 3% of the total budget, while Tallinn residents continue to travel on public transport free of charge. Free public transport in Tallinn has been available to residents of the city since October 28, 2013. And from day one, opponents called the decision populist and predicted the bankruptcy of the city's public transport or even the whole Tallinn. As we all know, Tallinn has not gone broke.
Also, families living in Riga have to reckon with the highest housing costs, that is, about 180 euros per month, if the apartment is their own property, and not rented or borrowed. In Tallinn, these costs are 173 euros, but in Vilnius - 124 euros per month. Compared to the situation in 2018, the total cost of housing in Tallinn has decreased by 8 euros this year, while for Rigans it has increased by 8 euros, concludes Evija Kropa, an expert from Swedbank's Institute of Finances.
Housing costs have also decreased in Vilnius, but slightly - by about 4 euros. In both neighboring capitals, a decrease in the heating tariff is observed, while in Riga it has remained at the level of 2018. Residents of Tallinn are also paying less for water supply and sewerage services this year. Riga families also have to deal with the highest costs for electricity, total management, water supply and sewerage payments, as well as real estate tax (RET) payments, which families in Tallinn and Vilnius do not pay at all.
Looking at the pre-election programs of last year's Riga City Council extraordinary elections, it must be concluded that the housing sector was included in their programs by all parties that ran in the Riga City Council elections - both those that entered the Riga City Council and those that did not. For example, JKP promised to set RET at 0% for pensioners with housing valued up to 100,000 euros and land up to 10,000 euros. The Latvian Russian Union (LKS) was committed to maintaining real estate tax rebates and additionally exempting the first 50 square meters of living space from the tax. Neither the JKP nor the LKS promises to abolish RET for certain population groups in Riga has been implemented so far.
According to the calculations of the Swedbank's Institute of Finances, this year families in Riga are spending 764 euros per month for food, housing and transport, 709 euros per month in Tallinn, and 630 euros per month in Vilnius. The biggest stumbling block in the daily lives of Rigans is the growing expenditure on housing (while it has decreased in neighboring capitals), the highest public transport costs and the lowest average income after taxes and state family benefits.
"The costs of food, housing and transport are the most important items of expenditure in every family's daily life, so they have a significant impact on the overall cost of living. Over the last three years, the situation in Vilnius has improved relatively rapidly, thanks to a significant increase in the average wage level, while the three main cost items have remained almost unchanged. This has provided families living in Vilnius with a stable second-best place to live and work, leaving Riga as the last among the Baltic capitals,” sums up Evija Kropa.
The income of the population in all three capitals of the Baltic States has increased in recent years, although this increase has varied. Since 2018, the average salary has increased significantly in Riga, Vilnius and Tallinn. Assuming that the family has two children and both parents earn the average salary in the capital, the most significant increase is observed in Vilnius - there the “in-hand” salary has become higher by more than a third or 38%. Meanwhile, the corresponding increase in net salary with two registered dependents in Riga was 26%, but in Tallinn it was the most moderate - 18%. It is important that “in-hand” wages in Riga have also increased at the expense of reducing the tax burden: since 2018, the wage threshold has been gradually increased, up to which the differentiated non-taxable minimum is applied, the amount of the non-taxable minimum and the amount of the dependent allowance have increased too.
* The calculation of Swedbank's Institute of Finances is based on the assumption that a family of four has two adults and two children. Their disposable income is the average salary in the capital for each adult + state family benefit for each child. The family travels by public transport and buys a monthly ticket for all modes of transport. The family lives in the capital (Riga, Tallinn, Vilnius) in a non-renovated block of flats, in a 70 m2 apartment, consuming 0.017 Mwh/m2 of heat, 11 m3 of water, 200 kWh of electricity per month. Food purchased is the optimal range and amount of food for a person per month to provide adequate and sufficient amounts of nutrients.