One of the problems in Latvia is the availability of quality housing at an affordable price. There is still a lack of private investments in the construction of rental apartment buildings in Latvia, despite a stable demand for affordable rental housing. The lack of investment is due to both household purchasing power and the economic viability, or profitability, of rental housing construction projects compared to alternative real estate projects. One of the challenges in Latvia is ensuring the availability of housing that meets modern construction standards and energy efficiency requirements at an affordable price. This is one of the basic needs of the population, and therefore, the availability of housing that meets the demands of modern life is one of the current priorities of the country. To promote the construction of rental housing, in 2022, the Cabinet of Ministers adopted regulations to support the construction of residential rental houses within the framework of the European Union’s Recovery and Resilience Mechanism Plan “Establishment of a Financing Fund for Low-Rent Housing Construction”. The research aims to explore low-rent construction capabilities and their implementation strategy. By developing rental housing through the support mechanism of the European Union, it is planned to provide housing for households that are too wealthy to receive social housing or housing allowances but whose incomes are not sufficient to obtain a mortgage loan. Some countries have addressed the issue of housing affordability by establishing housing development funds. Taking this experience into account, the Organization for Economic Cooperation and Development has developed recommendations for the long-term operation of a Housing Affordability Fund in Latvia. The study uses qualitative methods which cover sector-specific documents and their research. The statistical analysis will explore the current state of the rental housing market, prices and identify market challenges and opportunities.