Published on and written by Cyril Jarnias
In just a few years, Lithuania has transformed from a catch-up country into a genuine urban laboratory. Behind the cranes dotting the skylines of Vilnius, Kaunas, or Klaipėda, it’s not just new buildings that are rising, but a highly structured vision for the city of tomorrow: greener, more compact, more connected, and more inclusive. From railway districts transformed into multifunctional hubs to ports redesigned for offshore wind power, along with major sustainable mobility programs, the country has embarked on an unprecedented wave of projects.
Urban development in Lithuania faces several social realities: an aging housing stock, a high rate of private ownership that slows renovations, an aging population, and depopulation in several regions. It is within this context that the country’s new urbanity is being built.
Housing: Catching up without losing sight of affordability
The housing issue is the common thread running through the country’s urban transformation. According to the OECD, many Lithuanian households, despite relatively low average housing costs, live in substandard apartments and struggle to finance renovations or mortgages. The homeownership rate exceeds 90%, but it is precisely this fragmentation of ownership that complicates major modernization projects for the multifamily buildings constructed en masse before 1993, often during the Soviet era.
Modernizing an aging housing stock
The government has made energy renovation a priority, particularly through the “Multi-Apartment Building Modernisation” (MABM) program. This scheme offers loans and grants covering 30% of renovation costs, with no income conditions, and the possibility for the most modest households to obtain full coverage. The goal is to modernize 5,000 multi-apartment buildings by 2030, or about 500 per year. Between 2013 and 2020, the average implementation rate was around 340 renovations per year, peaking at 769 in 2016, which indicates the scale of the effort required in the coming years.
Number of people supported by a rent compensation scheme in the first half of 2022 in Lithuania.
Making major cities livable for young families
The property boom in the capital complicates access to homeownership. In Vilnius, only 20% of families can afford a mortgage for an average apartment on the existing market. The situation is more comfortable in Kaunas and Klaipėda (about 60% of households succeed), but this gap illustrates the growing urban pressure on the capital, reinforced by the arrival of foreign workers, international students, and refugees from Ukraine and Belarus.
To contain market tension, the state supports homeownership for young families with two forms of assistance: a means-tested grant for low-income households, and an unconditional grant for purchases outside major urban areas. This policy aims to redirect demand towards medium-sized or small towns, 14 of which are classified by the EU as ‘problematic territories’ with declining populations.
In parallel, a major public-private partnership is set to enable the construction of housing for young professionals (teachers, firefighters, etc.) based on a “Design, Build, Finance, Operate, Maintain” model. Thirteen municipalities have signed a letter of intent: the housing will be financed and operated by the private sector for 25 years, after which full ownership will revert to the cities, which must, however, offer affordable rents throughout the period. This program, supported by the European Investment Bank via the National Property Agency, could produce its first housing units within three years and extend until 2030.
Experimenting with new housing models
In Vilnius, the “Ethical housing Vilnius” initiative, led by a collective of architects, urban planners, and sociologists, is exploring alternative models like German Baugruppen or British Community Land Trusts. The goal is to design affordable, replicable, and ecological housing, in collaboration with the municipality to identify land. This culture of experimentation complements more traditional subsidy or public investment policies and could eventually inspire projects in other cities.
Vilnius: The capital as a laboratory, between green city, smart city, and major projects
Vilnius concentrates a large portion of the country’s new urban projects. The political capital and primary economic hub, the city promotes a “Vilnius 2030” strategy focused on sustainable growth, redesigned mobility, and a capital “closer” to its inhabitants, in the spirit of the 15-minute city.
A master plan that structures growth
The new master plan, prepared by the municipal company “Vilniaus planas,” serves as a compass. It is based on the “City+” program, which emphasizes modernizing residential neighborhoods, creating social infrastructure (schools, healthcare facilities, cultural venues), and preserving green spaces. This document divides over 3,300 urban blocks with precise rules for height (6–7 stories on average, taller only in sub-centers), density, and construction intensity.
The plan aims to correct the legacy of a highly segmented city – a tertiary center on one side, large, poorly served housing estates on the other – by promoting mixed-use development: more housing in the center, more services and jobs in outlying neighborhoods. Sectors like Žirmūnai, Naujamiestis, Naujininkai, or the Savanorių Avenue axis are targeted for this transformation. Approximately 500 hectares of underused former industrial zones are to be redeveloped.
The Vilnius Connect project: Turning the railway station district into a metropolitan hub
A symbol of this new development phase, the “Vilnius Connect” project aims to transform the railway station area into a true multimodal hub blending transport, offices, housing, and public spaces. Over 32.8 hectares, between Paneriai, Geležinkelio, Stoties, and Seinų streets, the city wants to create a hub that better connects neighborhoods currently severed by railway tracks.
The overall design is based on the winning project from an international competition won by Zaha Hadid Architects. Key features include a 9,500 m² structure over the tracks that will combine a passenger station, retail, and pedestrian crossing between neighborhoods. Around it, several squares and gardens (St Stephen’s Church, Strumila Garden, Pelesa Square) are to be redeveloped. The process involved extensive public consultation, proving that the transformation of this strategic sector is closely followed by residents.
Major urban redevelopment initiatives in Vilnius, supported by international investment.
The RELEVEN group, supported by the EBRD, is investing €50 million in a joint venture to redevelop brownfields and underused land in the heart of the capital.
A 1.3-hectare project on the right bank of the Neris, including six towers with 55,000 m² of offices, housing, retail, and restaurants, featuring an 85-meter residential tower.
Goal to create a new central area where all essential services are within walking distance, forming a true ’15-minute’ neighborhood.
All operations of this joint venture must at minimum achieve the “Very Good” level of BREEAM certification, or exceed the national requirements for nearly zero-energy buildings (nZEB) by at least 10%. This is a significant milestone in a country that already mandates the use of at least 50% wood and organic materials in public buildings from the end of 2024, before extending the requirement for environmental certifications from 2025 onward.
Rethinking the Neris riverbanks: Bridges, urban beaches, and new neighborhoods
The Neris River, long underutilized, is becoming the stage for a vast reclamation plan. Mayor Valdas Benkunskas has announced the construction of four new pedestrian and cycle bridges and one road bridge, with a goal of nine crossings across the capital. The Albert Bridge is already under construction between A. Goštauto and Upės streets. It will be followed by the Kernavė Bridge (between Šnipiškės and Naujamiestis), the Uzvingis pedestrian bridge linking Vingis Park to the Litexpo exhibition center, and an Antakalnis–Žirmūnai footbridge. A road bridge is planned to connect the Lazdynėliai and Vilkpėdė neighborhoods, which have been heavily urbanized in recent years.
The project is not limited to crossings: road access along the Neris, new cycle paths (from Verkiai to Upės Street, from the Valakampiai area to P. Vileišio Street, and along Šiltnamių Street towards Uzvingis), and the development of urban beaches are planned. Valakampiai, in particular, is to be redeveloped with a large playground, a boat pier, and a quiet zone.
The White Bridge area, already iconic for leisure, will be redeveloped with an underground parking garage, a redesigned esplanade, and open-air swimming pools. An architectural competition for these urban pools is planned for 2026, with an opening around 2030. Meanwhile, the Žirmūnai “winter port” will be rebuilt to accommodate more boats, through riverbed dredging, new ramps, and the addition of commercial spaces.
These interventions combine with large-scale private projects like the Akropolis Vingis complex in the south of the city, in the Vilkpėdė district. Developed by Akropolis Group – which is also financing significant neighboring roadworks – this complex will include a shopping center, a concert hall for 2,500 to 4,000 people, a conference center, a multiplex cinema, offices, and long-term rental housing, all surrounded by 4,500 parking spaces, promenades, and cycle paths. The adjacent public infrastructure (reconfiguration of the Gerosios Vilties–Geležinio Vilko interchange, new intersection, pedestrian/cycle underpass) is a prerequisite imposed for the site’s opening.
Sustainable mobility: Green capital and electric transport
Named European Green Capital for 2025, Vilnius aims for climate neutrality by 2030. Mobility is one of the central levers of this ambition: currently, the city has 140 km of cycle paths and nearly 1,500 km of pedestrian routes and traffic-calmed zones, with an additional 100 km planned. In the medium term, one-third of trips should be made by public transport, one-third by car, and one-third on foot, with at least 8% by bicycle.
To meet these goals, the municipal operator Vilniaus Viešasis Transportas (VVT) is massively renewing its fleet. Thanks to €80 million in loans from the EBRD and the Nordic Investment Bank, the capital plans to purchase 73 new trolleybuses and 85 electric buses. A separate order for 145 electric buses of various lengths is underway, for an amount close to €97 million including maintenance. In parallel, 12 new routes reserved for electric buses will be created, frequency will be increased on over half the network, and priority bus lanes will be extended from 36 to 60 km by 2030.
Billions of euros from European funds 2021-2027 earmarked to finance sustainable mobility in Lithuanian cities.
A smart city built on digital technology
Vilnius has established itself as a showcase for urban technologies. Its “digital twin” relies on a geographic information system (GIS) fed by drones (four devices) and artificial intelligence, capable of detecting uncleared snow, potholes, traffic jams, illegal parking, or overflowing trash bins. AI models are trained on thousands of photographs and prioritize interventions based on proximity to schools, hospitals, or playgrounds.
The city also uses anonymized mobile phone data to analyze population flows, readjust public transport services, or identify neighborhoods underserved by services. The citizen app “Tvarkau miestą” allows anyone to report a problem in public space, and a “Greenness Index Calculator” helps architects measure the ecological footprint of their projects. From public wifi to intelligent traffic management systems, everything is grouped under the “Smart Vilnius” banner.
A capital building extensively, including housing
Beyond this major infrastructure, a constellation of residential projects is reshaping many neighborhoods: in Šnipiškės, the “Naujasis Skansenas” neighborhood and projects like “Aurea home,” “Trimitų namai,” or “Šnipiškių perspektyvos” are transforming a former low-rise housing area into a very dense extension of the business district. In Antakalnis, developments like “Šilo 23” or “Platinum 48” mix housing, offices, and retail. In Pašilaičiai, Baltupiai, Justiniškės, or Lazdynai, programs like “City Stories,” “Taika Alley,” or “Lazdynų namai” are renewing the existing stock, often to energy class A or A+.
The “Vilnelės skverai” project, developed by Merko Būstas, illustrates the scale of these operations: ultimately, 26 buildings and over 1,000 apartments along the Vilnelė River, with 20 buildings and 750 units already delivered (95% sold). The fourth phase, with six new buildings and 318 apartments, aims for partial delivery around 2026, with unit sizes ranging from 25 to 93 m², all in energy class A+.
Kaunas: Innovation, culture, and green energy as urban drivers
As the country’s second city, Kaunas presents another facet of the Lithuanian transformation. A former provisional capital, rich with over 6,000 interwar modernist buildings (now a UNESCO World Heritage site), the city aims to combine heritage and innovation with its Strategic Development Plan for 2030.
A co-constructed Strategic Plan
This plan, developed over more than a year with over a hundred experts and numerous citizen workshops, covers the economy, urban planning, mobility, the environment, health, social protection, education, sports, culture, and tourism. The stated goal is to enhance Kaunas’s attractiveness to national and international talent, capitalizing on already well-developed infrastructure.
The document draws inspiration notably from Dutch experience, particularly Amsterdam’s strategic plan, emphasizing the circular economy. It nevertheless highlights a weakness: the lack of a unified citywide data collection and exploitation system.
Urban HUB and Aleksotas Innovation Park: Two new economic hubs
Among the structuring projects, two major complexes stand out. First, the stock-office campus “Urban HUB” developed by SBA Urban in Biruliškės, Kaunas district. Spanning over 70,000 m² in three phases, this multifunctional complex will host logistics, retail, offices, restaurants, and leisure, for an investment exceeding €100 million. The first phase, 22,000 m², is set to bring together about fifty companies, from major food brands to specialty stores, cafes, and event spaces.
Around it, the municipality is developing water, sewer, and drainage networks, extending the district heating, and rebuilding access roads, notably by creating a new Veterinarijos Street. The architecture, by PLH Architects (Denmark), gives the site a showcase dimension for the stock-office model in the region.
Municipality and PLH Architects (Denmark)
Second, the Aleksotas Innovation Park (AIP), on the site of the former aircraft factory, aims to become a compact, green “innovation valley”. Surface and underground networks have been installed, a 10,000 m² helicopter maintenance hangar is set for conversion, and an urban feasibility study proposes a division into 20 plots, with a potential of over 200,000 m² of construction. Co-financed to the tune of over €10 million by European funds, the park sets ambitious targets: at least 1,000 skilled jobs, 142 researchers, and €90 million in private investment.
The box below summarizes some key figures for these two projects.
| Project | Area / Capacity | Estimated Investment | Major Goals |
|---|---|---|---|
| Urban HUB Kaunas (Biruliškės) | > 70,000 m² (3 phases) | > €100M | Stock-office campus, ~50 companies Phase 1 |
| AIP – Aleksotas Innovation Park | > 200,000 m² potential | > €10M European funds | ≥ 1,000 jobs, 142 researchers, €90M private |
Demographic rebound and housing boom
Unlike other Lithuanian cities, Kaunas saw its population grow by about 5.8% over five years, gaining nearly 16,800 residents. The real estate market is adapting: in 2023, over 1,500 new apartments were planned, after a peak of 1,020 units delivered in 2022, a level not seen since 2008. Behind these numbers are several trends: residents returning from suburbs to the center, increased demand for spacious units (over 120 m²), and the arrival of foreign investment from Estonia, France, Norway, Denmark, Finland, and the United States.
Real estate groups are actively developing new neighborhoods in Kaunas. YIT Lietuva is building the “Piliamiestis” and “Matau Kauną” neighborhoods on the outskirts of the Neris River and in the Aleksotas area. Meanwhile, SBA Urban is expanding its “Nemunaičiai” residential project in Žemoji Freda, with the ambition of creating a new neighborhood on the riverbank. This development is supported by the construction of a bridge to Nemunas Island, the future M.K. Čiurlionis Concert Center, and the rehabilitation of H. and O. Minkovskių Street.
Culture and heritage as urban levers
Kaunas is also betting on culture. After being a European Capital of Culture in 2022, the city continues the effort: over €100 million has been committed in recent years to cultural infrastructure. In the near future, the construction of the M.K. Čiurlionis Concert Center – a 23,000 m² glass building on the left bank of the Nemunas, near the Vytautas the Great Bridge – will give the city a 1,500-seat classical music hall and a 700-seat multifunctional auditorium. The project, resulting from an international competition that attracted 119 proposals from 36 countries, is designed by Paleko Archstudija and Baltic Engineers.
The budget envelope allocated to modernizing the Mikas Petrauskas School of Arts into a modern teaching hub.
Simultaneously, the “Modernism for the Future” program promotes interwar architecture, now labeled by the European Union (European Heritage Label in 2015, UNESCO inscription in 2023). The municipality has significantly increased its financial support for this heritage, from €30,000 in 2015 to €400,000 in 2016 and €1 million in 2017, alongside €800,000 per year for other cultural programs and €12 million allocated to “Kaunas 2022.”
Energy transition and smart city
The energy transition is another central pillar. The Renewable Energy Planning Concept for the municipality, developed within the Interreg BEA-APP project, aims to shift Kaunas’s district heating – once 96% dependent on natural gas in 2010 – to a 100% biomass and renewable energy supply. A municipal waste incinerator (CHP) operated by Fortum, under construction for a launch around 2020, was meant to play a structuring role in this shift, with a target of 85% biomass in the annual mix.
The company Kauno energija, which manages 410 km of heating networks for 120,000 inhabitants and 3,500 commercial buildings, is also experimenting with an IoT infrastructure based on a LoRaWAN network, with TEKTELIC gateways, to monitor heat and hot water parameters in real time. Ultimately, this digital layer is to be extended to other urban services: drinking water, public lighting, waste management, or parking.
Klaipėda and the ports: The sea as a new urban frontier
To the west, Klaipėda embodies another type of development: that of a port city aspiring to be a regional platform for green energy and logistics. The port, which remains ice-free year-round, handles over 47 million tons of cargo and over a million containers annually and is part of the core corridor of the Trans-European Transport Network (TEN-T).
A massive investment plan for a green port
Between 2025 and 2028, the Klaipėda State Seaport Authority plans to invest €308 million, with support from the European Investment Bank. The program includes: creating a new 100-hectare zone to the south, with a widened entrance channel (200 m), a turning basin, 1.3 km of quay, and all technical networks. The quays on the Smeltė Peninsula will be reinforced to support up to 40 tons per m², a prerequisite for handling the heavy components of offshore wind farms.
This is the total length, in kilometers, of quays that will be rebuilt, extended, or deepened for the new port project.
Offshore wind and green hydrogen as catalysts
Klaipėda is positioning itself as the support base for two future offshore wind farms, with a combined capacity of about 1.4 GW and capable of producing up to 6 TWh per year, or half of the country’s current electricity consumption. A first 700 MW concession has been awarded to a joint venture between Ignitis Renewables and OW Offshore S.L. A €115 million package was announced in 2023 to adapt port infrastructure for these projects, partly on the Smeltė Peninsula through an investment agreement with the stevedoring company Klasco.
The port is deploying a PEM electrolyzer to produce about 500 kg of green hydrogen per day. This hydrogen will power the country’s first hydrogen-powered waste collection vessel and freight locomotives through a partnership with LTG Group. Furthermore, shore power facilities for ferries will be installed to provide clean energy to the fleet.
These choices profoundly impact the city itself: they structure new activity zones, modify the waterfront, attract industrial expertise and skilled jobs, and impose strong environmental constraints (compliance with EU EIA directives, water framework, habitats, and birds).
A structured national sustainable mobility policy
All these local dynamics fit into a highly normative national framework. The Ministry of Transport and Communications adopted guidelines for Sustainable Urban Mobility Plans (SUMPs) as early as 2015, updated in 2022 to integrate the European Green Deal and the new European Urban Mobility Framework. The text covers ten themes, from road safety to alternative fuels, including urban logistics, intelligent transport systems, and TEN-T interchange infrastructure.
A table helps illustrate the scale of planned investments around SUMPs.
| SUMP Policy Element | Main Indicator |
|---|---|
| Cities with an approved SUMP | 20 |
| Cities preparing a SUMP | 5 |
| Cost of preparing the first 18 SUMPs | €1.5M |
| Estimated cost of sustainable mobility measures | €1.5B (18 cities) / €2.2B (national) |
| EU Funding 2021–2027 (urban mobility) | Dedicated “Sustainable Urban Mobility” program |
The ministry also sets specific targets for public transport: by 2029, all road-based public transport must run on alternative fuels, with an increasing proportion of zero-emission vehicles. By 2026, all vehicles purchased through public tenders must be alternative-fuel, at least half of which must be zero CO₂ emission. Four hydrogen stations are planned by 2026, ten by 2030, and 300 charging points for heavy electric vehicles are to be installed.
Number of electric buses purchased between 2014 and 2020 among the 189 public buses financed by national and European funds.
PPP, facilities, and medium-sized cities: Spreading the transformation
Beyond the major metropolises, Lithuania is relying on public-private partnerships (PPPs) to modernize infrastructure across the country. By the end of 2024, fifty PPP contracts were ongoing, with a notable increase in projects related to national defense and sports, educational, or leisure facilities.
Among the operations scheduled for 2025 are: major infrastructure projects, public transport network expansion, and improvements to public services.
An overview of major planned infrastructure and development projects, covering military, road, sports, cultural, and energy domains.
Modernization of major complexes in Rūdninkai and Kairiai (near Klaipėda), with an estimated budget between €900 million and €1.2 billion.
Improvement of key routes like national road 130 Kaunas–Prienai–Alytus and creation of the Zarasai bypass.
Construction of new facilities in Vilkaviškis, Rudamina, and Šiauliai district.
Creation of a modern art museum in Nida and renovation of the national zoo.
Energy optimization projects and public lighting modernization in Šilalė, Rokiškis, and Telšiai.
The logic is always the same: entrust the private partner with design, construction, financing, and sometimes operation, with a progressive transfer of the asset to the public authority. In the field of transport, the modernization of street lighting in Klaipėda, for example, was entrusted to a consortium of two companies for fifteen years, as was the renovation of the S. Darius and S. Girėnas Stadium and the Kaunas Sports Hall.
Cities leveraging citizen participation
Lithuanian urban development is not only played out in architects’ offices or city councils. Alytus, a city of 51,856 inhabitants, has had a procedure in place since 2018 allowing any group of at least 16 residents to propose development projects (playgrounds, dog parks, green spaces). Between 2019 and 2023, 55 proposals were put to a vote, with 13 realized for over €700,000: a monumental sculpture “Alytus-Myliu” at the city entrance, a playground for teenagers, a concert square in the municipal garden, a “Jasmine Park” recreation area, and a barbecue area in Youth Park.
Starting in 2024, schools will be able to decide for themselves on the layout of their spaces. This initiative is part of the city’s sustainable development strategies and action plans and is part of a broader movement of citizen participation, as evidenced by the example of Vilnius where consultations for the master plan gathered 1,200 contributions and then 330.
Persistent challenges and paths forward
Despite this abundance of projects, Lithuania faces several major challenges. The first relates to housing affordability. In a context of rising rents (up to +26.7% in 2022 and +10.2% in 2023 in Vilnius) and strong rental demand, especially in business districts, the government is pushed to rethink its homeownership assistance, deemed too focused on demand. The OECD recommends directing more resources toward supply (construction of affordable housing, mobilization of public land, tax incentives for landlords).
Lithuania has one of the lowest residential mobility rates in the OECD, hampering labor market adjustment. Over 40% of seniors live alone in energy-inefficient homes. The solution lies in developing neighborhood services (15-minute city) and improving the existing housing stock, without forcing relocation.
The third challenge concerns municipal capacities. Major cities like Vilnius, Kaunas, or Klaipėda have robust urban planning departments, capable of managing large projects and dialoguing with investors. But many small municipalities, especially among the 14 territories with declining populations, lack the technical and financial engineering to launch complex operations. Strengthening these skills is explicitly identified as a priority, as is the creation, at the state level, of a lead ministry for housing and a long-term financing mechanism for social and affordable housing.
A contrasted, yet deliberate trajectory
Underlying all these projects is a clear strategy: using the city as a lever for economic, environmental, and social transformation. In Vilnius, this translates into a green and digital capital, redeveloping its railway brownfields and riverbanks. In Kaunas, through an alliance between heritage modernism and new innovative industries. In Klaipėda, through the ambition to make the port a green energy hub that also benefits the city. In small and medium-sized towns, through mobility programs, PPPs, and citizen participation aimed at maintaining quality of life despite demographic pressure.
The bet is ambitious: achieving climate neutrality by 2030 for the capital, deeply transforming a housing stock largely inherited from the Soviet era, and rebalancing a country highly polarized around a few urban centers. In light of the investments already committed and the strategic frameworks adopted, Lithuania seems to have chosen to move fast, accepting experimentation – whether through alternative housing models, digital twins, or participation portals – rather than waiting for ready-made solutions from elsewhere.
What is at stake today on the banks of the Neris, in the hangars of Aleksotas, or on the quays of Klaipėda goes far beyond the mere question of construction: it is a new way of making cities, where energy, climate, culture, mobility, and housing are conceived as a coherent whole. The success of this approach will depend as much on the ability to finance and deliver these projects as on the ability to make them livable places for all, including the most modest households and the most fragile territories.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
