A new housing policy is being developed in Ukraine, which provides for the introduction of social rent. Find out how this type of lease will change the real estate market and what steps the government plans to take to implement it

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Ukraine is developing new housing legislation that will change the rules of the game in the rental market. According to OBOZ.UA, the author of these changes, the chairman of the Verkhovna Rada Committee on the Organization of State Power, Olena Shulyak, noted that the new draft law “On the Basic Principles of Housing Policy” provides for the creation of mechanisms that will help every Ukrainian realize their right to housing.

Read this article to find out how many years you need to work to buy an apartment in Ukraine.

Social rent: what does it mean?

The Rada plans to create a new type of lease - social lease. In developed countries, social rent (housing owned by local communities) makes up a significant part of the market. In Ukraine, however, this figure is still very low - only 1.5%. In general, social housing is relatively cheap real estate that allows people with low incomes to rent a full-fledged apartment.

“The emergence of social housing in Ukraine will significantly change the rental market. Prices for social rent will be lower than market prices, which will force private landlords to revise their tariffs. In addition, social rent will be official, which will provide security for tenants,” said Olena Shulyak.

Why is social rent important?

Currently, Ukraine has some of the least affordable apartments in Europe. According to Numbeo, the average salary in Germany can be used to rent 4.66 apartments, while in Ukraine it is only 1.64. This is the worst figure in Europe.

In addition, it is worth noting that before the full-scale war, the problem of rental affordability was already relevant. Today, more than 4 million IDPs have left their homes and are unable to buy new housing. Social renting could partially solve this problem.

It is also important that the rental market in Ukraine is currently in the shadows. Homeowners do not pay taxes, and there are no clear, statutory rules. Most realtors are satisfied with this situation because demand creates supply and competition dictates the rules. However, in such a situation, neither party is protected: tenants can be evicted without warning, and landlords remain defenseless against unscrupulous tenants.

Therefore, without waiting for the adoption of the framework draft law, the Committee, together with the Ministry of Reconstruction, is preparing the next draft law “On Social Housing”. It will describe in detail all aspects of creating a social housing stock.

In this article, we told you how much daily rent in Ukrainian resort towns costs now.

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What kind of social housing will be available for rent and how much will an apartment cost?

The social housing fund will include:

1. Multi-storey buildings that are already owned by communities and need to be repaired.

2. New multi-storey buildings built for the money of international partners.

3. Buildings to be constructed at the expense of paid social rent.

To form the fund, an inventory of all the objects owned by the community will be conducted. The European Investment Bank is ready to provide €200 million to support this project. Social rent payments will be directed to the fund for the construction of new housing.

The rental price can be tied to various indicators, such as the tenant's income, the average market price, and the characteristics of the housing. Local governments will conduct annual monitoring of the income of the tenant and his family.

Socially rented housing can be obtained in several formats: long-term and short-term leases. Depending on the tenant's income, part of the cost will be paid by the citizen, and the other part will be subsidized by the state.

The introduction of social rent will help to change the market by lowering prices and ensuring official rent. The draft law “On the Basic Principles of Housing Policy” is expected to be adopted by the end of the year. This is a prerequisite for the Ukraine Facility program, under which Ukraine will receive €50 billion from the EU for recovery needs until 2027.

However, the main condition for the development of a new type of lease and changes in market rules is the end of the war. Only then can the country's full recovery and construction of new housing begin.

We remind you! Various trends in rental prices have been recorded throughout Ukraine. Read more about which regions of the country have the most expensive rental prices, and where renting a house costs quite a bit, and what determines the price here.

Photo: Freepik

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