Built through a collaboration between Hiiumaa municipality and a private investor, the harbour rental building has brought 23 modern apartments to Kõrgessaare village, offering much-needed relief to the island's long-standing housing shortage. The new building was created by converting a former fish factory office that had stood empty for 30 years. Due to strong demand, all apartments have already been rented out.
The project is led by OÜ Sadama Üürimaja, a company founded by Hiiumaa municipality in partnership with private investor Hiiu Invest OÜ. The municipality contributed €175,000, while the Enterprise and Innovation Foundation (EIS) supported the project with €1 million — nearly half of the total construction cost of €2.1 million.
"The remarkably quick occupancy of Sadama Rental Building clearly illustrated the strong demand in the local rental market. To my knowledge, this is Hiiumaa's first and so far only real estate development in which the state, local government and a private investor have all joined forces in the financing model," said Margo Laul, board member of OÜ Sadama Üürimaja and Hiiu Invest.
The project involved converting a former fish factory office in Kõrgessaare that had been vacant for 30 years. Originally planned to house 12 apartments, the need to fully reconstruct the roof opened up the opportunity to create as many as 23.
Mayor: housing shortage has been a drag on development
Hiiumaa Mayor Hergo Tasuja acknowledged that the Covid period changed many people's attitudes toward where they choose to live. "That time proved that living in a big city is not the only or the best option. Hiiumaa's population grew by nearly 200 people — about 2 percent — after the pandemic, and the number of children in kindergartens grew by as much as 10 percent," said Tasuja.
"In recent years, the desire to return to the island or for new residents to move here has been greater than the existing housing stock can accommodate. Hiiumaa municipal council made a bold and correct decision in 2022 to participate in the state-supported rental housing programme. Hiiumaa has gained a significant amount of modern living space, and this shows that even in challenging circumstances it is possible to create solutions through cooperation between the state, local government and the private sector," said Hergo Tasuja.
Different apartments for different needs
The apartments have been deliberately designed to meet the needs of different target groups. The building includes one four-room apartment of over 70 m², as well as one- to three-room apartments with varying floor plans. Some apartments feature skylights, while others have a balcony overlooking Kirikukaht Bay. All apartments allow individual room temperature control and cooling in summer. The kitchen and bathroom are fully fitted in every unit.
The support measure underpinning the project was designed to improve access to rental housing for mobile workers — people who relocate due to the location or change of their workplace. As a result, the developer expected the majority of tenants to be people with short-term living arrangements who move for work. Reality, however, has turned out differently. Many Hiiumaa residents wish to use the completed rental building as a long-term home. This clearly confirmed that the demand for quality rental housing in this location is real and exceeds the measure's original target group. Those returning to the island and local residents needed modern housing just as urgently as mobile workers.
Rents range from €250 to €400 per month depending on apartment size, with utility costs on top. Apartments can be rented on a month-to-month basis or under a longer-term agreement. Kõrgessaare village is located just 15 kilometres from Kärdla.
Final steps
According to the developer, the building is technically complete and more than half of the residents have already moved in. "Only the area in front of the building is waiting to be paved by the contractor, and the notice of use has already been submitted. We also plan to refinance the construction loan issued by a Lithuanian financial company with a longer-term bank loan from the domestic market in the near future," added Laul.
In Margo Laul's view, Hiiumaa could accommodate a few more rental buildings — but only on the condition that the public sector is again brought in to help finance construction.
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