Is Ukraine ready to get rid of Khrushchev-era apartments?

Author : Yuriy Hryhorenko

Source : 112 Ukraine

Ukrainian cities have little space for the construction of the new building, so more attention is being paid to quarters with Khrushchev-era apartments, which can be demolished and replaced with the new skyscrapers
15:30, 7 November 2018

Open source

Many Ukrainian cities face the problem that there is less and less space for the construction of new buildings, so more attention is being paid to quarters with Khrushchev-era apartments, prefabricated five-storey apartment blocks, which can be demolished and replaced with the new skyscrapers. It is not just about money, but also about a legislative mechanism that would not require the consent of 100% of tenants for demolition

According to the State Statistics Service, the total housing stock of Ukraine as of 2017 amounted to 985 million square meters, despite the fact that in recent years about 10 million square meters have been built (including unauthorized construction). The queue for housing in 2014 amounted to 657 thousand families and individuals. But the state will not be able to provide everyone with housing, like it used to be in Soviet times.

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The state’s lack of disability to provide housing for all those in need does not eliminate the problem of the moral and physical aging of the housing stock. And every year this problem becomes more and more serious. Initially, Khrushchev-era apartments were built with an approximate operating period of 25 years, but then it was extended to 60 years, which are already expiring.

Ukraine has already implemented some separate projects of Khrushchev-era apartments renovation (modernization, which allowed to extend their “life” and improve the quality of such housing), however, these "pilot projects" have not become a comprehensive program. Some people are convinced that it is better to carry out the renovation of Khrushchev-era apartments, while the others believe that building new housing replacing the old quarters is better. The first idea is less expensive, but the second method allows to significantly increase the size of the new housing stock, creating more housing in a small area, improving the quality of social infrastructure.

However, the adoption of programs for the comprehensive reconstruction of housing rests on the law "On the comprehensive reconstruction of quarters of obsolete housing stock" from 2006, which provides for tenants’ 100% consent on being relocated; the total footage of the apartment should be 50% more than the old one, at the time of new construction, “relocators” should be provided with a temporary housing. There were specific plans for the demolition of entire neighborhoods and the construction of high-rise buildings in their place, but for various reasons, everything has stalled.

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At present, Ukraine’s Ministry of Regional Development is completing work on a new draft law, which is intended to launch a comprehensive reconstruction of quarters of obsolete housing stock. In particular, it is proposed to reduce the threshold of tenants' consent for the demolition of Khrushchev-era apartments to 75%.

Why is it problematic? Getting the consent of all the tenants is unrealistic, even with the prospect of getting a larger apartment, many have made expensive apartment remodeling, elderly single people have become accustomed to their surroundings, they don’t have the means to relocate and don’t want to change anything.

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Also, densification is met with great resistance from local residents, who do not always want to see a new skyscraper near their house, whose residents will take their places in a nearby school and kindergarten, turn the neighborhood into a huge parking lot, etc. Building a new house close to the old one might cause cracks on the walls.

It should be noted that the regional authorities are trying to do something within their capabilities. In late October, Chernihiv authorities approved the “Program for the construction of new housing on the site of homes over 50 years old” and agreed to participate in the program of the two largest local developers. 25-40% of the amount of construction of new housing will be financed from the city budget. Part of the apartments (30-40%) will be transferred to tenants of demolished houses, and the rest will go to the developer for sale. However, even a successful launch of the program will not solve the problem: they plan to build 5 new houses each year, while at least 200 residential buildings need reconstruction or demolition.

Capital prospects

Kyiv authorities plan to develop a renovation scheme for the Khrushchev-era apartments by the end of the year. After that, the Kyiv City Council will provide potential investors with a list of proposals for them to choose interesting ones. Most of the Kyiv Khrushchev-era apartments are located on Nyvky, Darnytsia, Solomianka, and Pechersk districts.

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Taking into account the new building standards (from September 1, 2018, the limit values of the population density of 150–450 people/ha were introduced, in large cities, it might exceed 20%), which significantly reduced the possibility of hotspot construction, development of unused industrial zones and the renovation of dilapidated housing becomes prioritized. A number of large enterprises, currently not functioning or not operating at full capacity, take large (10-100 hectares) territories, which might be used for the construction of residential areas.

"According to our estimates, it is possible to create up to 5 million square meters of housing if we use the industrial zones. And on the site of 2.8 million square meters of the “outdated” buildings, up to 4 million square meters of new modern apartments might be built. That is, Kyiv market has bright development perspectives,” Svitlo Park residential building head of sales Oleksandr Panfilov assumes.

According to Kostiantyn Oliynyk, head of UTG strategic consulting department, there are several examples of such a scenario – “Rybalsky” residential complex (built in the place of the Leninskaya Kuznitsa factory), Comfort Town residential complex (former Vulkan plant), Fayna Town (agricultural polygon and greenhouses of the vegetable factory), etc. In the future, territories of the industrial zones of Poznyaky, Bereznyaky, Petrivka, Kurenivka, and other industrial parts of Kyiv might become residential areas.

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New construction on the territory of the industrial zones is more expensive than residential areas densification. “It is much cheaper to build a 20 houses in different neighborhoods of the city inside the already existing residential areas, rather than build this very 20 houses on the free site and provide its future residents with kindergartens, school, sports infrastructure, parking space,” Oleh Prykhodko, GREENOL development company CEO, explains.

The interests of the developers

There are many peculiarities in the issue of this kind of comprehensive programs prospects. The first of these is the adoption of legislation that would broadly take into account both the interests of developers and the tenants of the old houses.

"The main problems here is the resettlement process, compensation with both money and living space, the area of proposed resettlement, the availability of housing in a maneuverable fund. Also, the mechanisms of resettlement of people remain unclear… These mechanisms simply do not yet exist, we need to elaborate on them," Panfilov emphasizes.

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Kostiantyn Oliynyk note that the main difficulty with projects for the reconstruction of the pre-revolutionary houses and housing of the Khrushchev era is the low protection of developers and residents of the existing houses. Residents of the old houses are certainly interested in receiving housing in a new comfortable complexes in exchange for their emergency apartments, but, on the other hand, they are frightened by the prospect of being left without a house at all.

In addition to the adoption of legislation, there is an acute question of the interest of the developers themselves. A favorable location will attract the unprecedented number of the takers. But the districts, which are far from the historical center would be of a low interest.

“The current situation in the real estate market does not motivate the existing developers or potentially new market players to independently raise the issue of demolishing old and dilapidated housing,” Oleh Prykhodko notes.

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The emergence of a viable model (as an example of Chernihiv showed) and the adoption of a new law might lead to the fact that in some 2-3 years, this positive experience will spread throughout Ukraine. A quick positive decision of the Ukrainian parliament is needed to reach this aim. However, we should not hope for it in this pre-election year.

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