Problems in Ensuring Sustainability of Estonian Real Estate Policy
In the course of the reforms of the period of restoration of independence and transition to a market economy, Estonia developed different attitudes toward the real estate necessary for performing state functions. Residential units were overwhelmingly privatized and housing problems were left to the market to resolve; real estate for production and service went into the ownership of companies, in which the state may hold a share; institutions that provided public services (universities, hospitals, museums) went to foundations, companies and persons under public law, which the state contracts for services; the legislation adopted by the Riigikogu and long-term activity plans form the basis for developing state forests and roads.
No policy for development and management of real estate (buildings) related to state governance and administration has thus far been developed in Estonia, and as a result the state activities in this field are disparate, contradictory and ineffective. Disposal of the major part of the state’s real estate is fragmented among hundreds of sub-agencies. The real estate of three ministries (finance, justice and the interior) has been transferred to Riigi Kinnisvara AS and the state institutions act as renters. At the same time, many state institutions lease the real estate they need from the private sector. On the other hand, state institutions lease out unused real estate to commercial and the third sector. To avoid economic losses and to create clear development prospects for management and development of state-owned real estate, it will be necessary to develop and implement an integral, comprehensive real estate policy that insures an expedient and standard approach for all the real estate necessary for the governance and administration activity of the entire state.
In order to develop an efficiently running state real estate policy, a number of problems will have to be resolved comprehensively as an integral system that considers the reciprocal associations.