Projects to create municipal rental housing for a number of communities have moved on to the next stage of implementation – they have been submitted to the Ministry of Finance of Ukraine for an assessment of their financial models. The decision was taken during a meeting of a special commission under the Ministry for Development of Communities and Territories, chaired by Deputy Minister Nataliia Kozlovska.

Out of the 25 communities that applied to participate in the pilot project, five have been selected for the next stage: Lviv, Zhytomyr, Mykolaiv, Kremenchuk, and Kropyvnytskyi. These communities submitted the most well-developed projects, which have the potential to be implemented under the new social housing model.

According to Nataliia Kozlovska, the key task at this stage is to verify the financial viability of the projects.

 

 

‘Today we have shortlisted and submitted for further assessment well-structured projects – those with real potential for implementation. As the project terms provide for co-financing, it is important to assess whether communities will be able to secure loan funding without placing an excessive burden on their budgets, as well as how viable the rental model itself is. This is not about temporary solutions, but about creating a system that will enable the construction of affordable housing for those who need it most – internally displaced persons, veterans, and specialists whom communities are keen to retain,’ the Deputy Minister emphasised.

The scale of the submitted projects varies significantly. The total cost of a single project ranges from approximately UAH 680 million to nearly UAH 5 billion. The approaches differ accordingly: some communities are proposing individual residential buildings, whilst others are proposing large-scale neighbourhoods with infrastructure integrated into the urban environment.

For example, Lviv has presented one of the largest projects – the construction of four multi-storey residential houses ranging from 6 to 10 storeys high, comprising 1,000 flats – with commercial premises that can generate additional income and support the maintenance of such housing.

 

 

Kropyvnytskyi is proposing a project with a high level of readiness for implementation: the land plot has the appropriate designated use and requires no additional procedures. The community is proposing the construction of eight six-storey apartment buildings with 1,003 flats, making this project one of the largest in terms of housing capacity. Zhytomyr has proposed a balanced solution with good access to utility networks and modern technical approaches. The city is proposing a compact solution – the construction of a single nine-storey, four-section building comprising 216 flats.

In their projects, Mykolaiv and Kremenchuk are focusing on financial sustainability. In particular, Mykolaiv envisages a rental model that takes into account the residents’ ability to pay and is supplemented by a commercial component. Kremenchuk also offers a balanced approach: rents remain affordable, whilst additional income forms a reserve to ensure the stable operation of the housing stock. As for development parameters, Mykolaiv plans to construct two 10-storey apartment buildings with 300 flats. Kremenchuk presented the largest project in terms of the number of buildings: it includes the construction of 29 nine-storey residential buildings with 1,024 flats.

Importantly, all projects take safety into account, with each one providing for a bomb shelter. The communities also take different approaches to setting the rent: it varies by region – roughly between UAH 90 and UAH 320 per square metre – but is generally determined based on the principle of affordability for residents.

The projects are assessed comprehensively, taking into account not only the idea itself, but also the readiness for implementation, the availability of infrastructure, connections to networks, the financial model, and the actual need for social housing in the community. Representatives from the Ministry for Development, the Ministry of Finance, the Agency for Reconstruction, and the Reform Support Team at the Ministry for Development are involved in the process. Representatives of the European Commission and the EIB are also involved as independent observers.

Upon completion of the financial assessment, the projects recommended for implementation will be identified. The pilot project will form the basis for the development of a comprehensive municipal rental housing system in Ukraine, which can subsequently be scaled up to other communities.

For reference:

A pilot project to create municipal social housing, coordinated by the Ministry for Development of Communities and Territories of Ukraine, involves the construction of housing that will remain the property of communities and be rented out at below-market rates. The relevant provisions are set out in Government Resolution No. 796.

The pilot phase is implemented with the support of the European Investment Bank and the European Commission. EUR 100 million has been allocated for its launch – a combination of loans and grants that form part of a larger EUR 400 million funding package aimed to develop this initiative.