New homes signal suburbia to come

RIGA - Latvians who can afford them can have attractive cottages in the country, commutable to Riga's center, as the single-residence building industry poises to take off. One such project is Liepezers, by Baltic Design Group which is building 30 presold houses among the linden trees about 8 km from Dome Square.

The half-dozen different floor plans begin at $108,000 for a split-level ranch-style home with a floor space of about 250 square meters.

A special financing contract between BDG and Unibanka will allow buyers to get a loan for a term of four to 40 years with a minimum payment of 600 lats a month. Because the average monthly income in Latvia is 148 lats, obviously few can afford to drink their Coca Cola in these American-style gated communities. So far, eight of the 30 homes planned for Liepezers have been sold, going to the likes of a SWH IT company manager, a doctor, and several banking officers, according to Aivars Gobins, a Latvian-American New Yorker and director of BDG.

How soon before such residential pockets do a ring around Riga?

When incomes increase, according to Sol Bukingolts, real estate developer and vice president of American Chamber of Commerce in Riga.

"Such gated developments give a good signal that this market will take off," said Bukingolts, standing in the grass-green yard of a model home at Liepezers, "but the critical mass is not here, because the disposable income is not here yet. I expect it will take off and grow just as it has in Central and Western Europe, in a spread of five to 15 years when people will have homes like this and apartments also in the city."

For those who can buy them like managers of medium-size companies, others in high management positions, these homes are available with wood throughout, open living room-dining and kitchen areas, three bathrooms, three rooms down, including a family room, rec room and great room or double garage at the buyer's option. The package sits on 1,500 to 2,000 square meters of ground with a deck, terrace and small pool for backyard entertainment and relaxation.

With a private entrance and its own bath, the lower level can be used as a home for mom and pop.

"In Latvia, several generations of families still live together," Gobins said, leading a walk-through. The division has a small lake with a sandy beach area hauled in from nearby Jurmala and a community barbecue/entertainment area, but small family-sized barbecues among the surrounding trees for privacy. Each home has access from an asphalt road.

Gobins agrees that the boom for such single dwelling projects is a ways off. He said he thinks the timing of the impending boom will depend on disposable income plus liberalizing the service monopolies to bring down the expensive part of such construction - sewerage, water and power infrastructure. Even so, there will be a wait.

"We're not even close, but we will get there if we don't have another banking crisis," he said. Gobins was ready to go with the project two years ago, he said, but had his financing pulled out from under him when Russia floated the ruble in August 1998.

Bukingolts said the lust for single dwellings is an evolution from the desire for bigger-than-big housing eight or nine years ago.

"People were building palaces right after independence. They thought the cash flow would continue forever, but it didn't. Then the market went for renovated, large apartments in old buildings," he said.

Meanwhile, until run-of-the-mill Rigans can afford to exodus the city for the suburbs, Latvia's urban-tethered upper middle class can have what their lower-middle-class counterparts in American suburbs have enjoyed and outgrown: small gated communities with 30 houses on five hectares, plus three hectares dedicated to community green space.

" I hope Latvians will like the Western style of living with fresh colors, Western architectural vision, simple, practical decor and design," cooed Bukingolts.

Gobins, Bukingolts and even former prime minister Maris Gailis, who came to the BDG open house and was seen thumping door casings and cupboards with his knuckles to check the quality of materials, think home buyers will eventually turn from full-time living in renovated apartments and take on new housing. Gobins' competition is Kolonna with a community in Mezaparks, Gailis' upscale development in Kipsala across the Daugava River from Old Town, and several in the Baltezers neighborhood, including 17 houses built by BDG.