North of Tallinn’s centre, the tracks of the city’s rattling tram lead to a grass-covered green belt, bordered by rows of wooden houses and the odd factory building in stone and brick. This is Kalamaja.

While the Estonian capital’s Old Town hosts boozy visitors alighting ferries from Helsinki or Stockholm, this unassuming, low-rise neighbourhood is a world away from the city centre. It is also home to some of the city’s most unique restaurants, cafés and shops. This is a place where young Tallinners with ideas and projects to pursue are now moving. Kalamaja’s colourful wooden houses were built in the late 19th and early 20th century and have been well preserved throughout the Soviet occupation of the city between 1940 and the early 1990s.

Priit Juurmann and Yoko Alender are married with four children and bought an apartment in one of these houses 10 years ago. They later co-founded the bustling F Hoone restaurant in a disused Soviet-era factory building, serving Baltic and Eastern European-influenced dishes. “When we moved here it wasn’t the place we saw it could be,” says Alender. “I’ve seen how people can influence their own living environment. And that’s what I found so positive here in northern Tallinn.”

With its cheap properties, walkable streets and location between the Old Town and the Gulf of Finland, Kalamaja is ripe for development. Jaanus Juus is founder and owner of the Telliskivi Loomelinnak (creative city). The development occupies an expansive but only partly renovated factory compound, populated by a growing roster of shops, cafés, bars, design offices and galleries. “This is something we want to give our children,” says Juus. “It’s not a short-term project where we develop it and sell it for a profit.”

A stroll around Kalamaja reveals a wealth of such entrepreneurial ventures. There’s Pudel, a bar stocking beers from around the world, and Karl Annus’s workshop where the craftsman makes wooden glasses. Sesoon serves an excellent Baltic lunch and Kalamaja Pagarikoda is an easy-to-miss bakery with the best Moscow buns in the city.

During Soviet rule, Kalamaja was used for heavy industry and some of its past can still be seen today; as monocle visits, a freight train covered in Cyrillic script rolls past the new Indian restaurant, Lendav Taldrik. The waterfront is just a few minutes away but almost entirely blocked off by Soviet-era buildings including a vacant prison and what was a submarine factory and shipyard. But now many of these buildings are earmarked for development. One of the more advanced projects is Noblessner, which will include a seafront cycle lane and pedestrian paths, homes and restaurants.

The investment is good news for Kalamaja but its residents have had to work to ensure that the area maintains its charm and regains its historic link to the sea as these ambitious projects push ahead. “A seafront is a very valuable thing to have in a city and there’s so much potential because it’s not developed yet,” says Teele Pehk at the Estonian Urban Lab, which studies and consults on urban planning and development.

“People are demanding more quality, the kind of quality that was absent 10 years ago,” says Juurmann. “There’s a new wave of urbanism going on and Estonia is so open to different possibilities. It’s a very interesting time.”