The Verkhovna Rada adopted in the second reading the bill “On the Basic Principles of Housing Policy” (No. 12377), which repeals the 1983 Housing Code and actually launches a housing reform, abandoning outdated Soviet approaches.
The Chair of the Verkhovna Rada Committee on the Organization of State Power, Local Self-Government, Regional Development and Urban Planning Olena Shulyak reported that almost two thousands of edits.
The committee, together with ministries, key market participants, international experts and financial institutions, worked on their development for more than five months. The law is part of Ukraine’s obligations under the Ukraine Facility program and should solve the problem of long-term housing queues, which was particularly exacerbated by the full-scale invasion.
According to the adopted law, only four categories of citizens will be able to receive free housing from the state: military personnel, police officers, rescue workers and orphans. For the remaining persons who need improved housing conditions, new formats are being introduced – affordable and social housing.
“Affordable housing is housing that citizens will be able to purchase on preferential terms thanks to new mechanisms: preferential mortgage programs, an updated system of housing and construction cooperatives, leasing. Social housing is housing for temporary use on social rental terms,” explained Olena Shulyak.
The law also changes the approach to official housing. From now on, it will be provided exclusively for the duration of official duties, will not be subject to privatization and must be vacated after the termination of employment. An exception is provided for persons who have become disabled while performing their official duties.
Among the new instruments is rent-to-own. After ten years of renting, housing can be registered as property, but this option can only be used once. All rental payments will be directed to a special revolving fund, with the help of which new social housing will be built. Payments for social rent will be determined individually and will not exceed 30% of the total family income.
“Rent-to-buy is one of the most common mechanisms in EU countries. Similar instruments operate in the USA and Great Britain. It was on its implementation that international partners insisted,” Shulyak noted.
Territorial communities will become the owners of social housing. It is planned to create two types of operators: social housing operators in the form of municipal non-profit organizations and affordable housing operators, which will work according to a business model. To make housing cheaper, communities will be able to provide land for development free of charge, attract preferential loans or provide local guarantees.
A key element of the new housing policy will be digitalization. It is planned to create a single information and analytical system in the housing sector, which will digitize all housing queues, combine data on citizens, the housing stock and available programs, and automatically interact with other state registers.
“No manual management or lost papers. Each person will be able to independently check their queue, the right to benefits and affordable housing options,” Shulyak emphasized.
At the same time, the adopted law is of a framework nature. To fully launch the reform, the adoption of a number of other laws and amendments to current legislation, in particular to the Tax Code, will be required. In the near future, registration of draft laws on the social housing stock and its management is expected. The law on the social housing fund should be adopted by the parliament next year, as this is also a condition of the Ukraine Facility program.
