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Housing issues: How Khrushchev-era buildings to be renovated in Ukraine

Author : Anna Peshkova

Source : 112 Ukraine

Against the background of such infrastructure projects as "Big Construction" and "Big Reconstruction" the problem of outdated housing stock could not but be on the agenda
13:28, 9 July 2021

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Against the background of such infrastructure projects as "Big Construction" and "Big Reconstruction" the problem of outdated housing stock could not but be on the agenda. According to the calculations of the Kyiv City State Administration, the reconstruction of only the capital's Khrushchev era apartments will require at least $ 2.7 billion. This is more than the entire annual budget of the capital, and they are in no hurry to allocate funds from the state treasury. Therefore, the Ministry of Regional Development has developed a renovation option (renovation of the housing stock) through cooperation with businesses. The bill was submitted to the Cabinet of Ministers.

Cracks in the foundation, rotten communications - everything screams that the life of the apartment buildings built under the Union is already coming to an end. If the Cabinet approves the renovation program, some of these houses will be demolished, and some will simply be repaired.

Those tenants whose houses will be demolished will be offered new housing. Moreover, it will be possible to relocate some of the citizens of such houses even without their consent. What area of ​​new apartments can be counted on remains a mystery. There is a possibility that it will become even smaller than before.

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Bonuses for owners of demolished houses

According to the inventory of the Kyiv City State Administration, in Kyiv, 3-5% of apartment buildings should be demolished due to their accident rate. In general, the innovations can affect about 80% of high-rise buildings, because they belong to the outdated housing stock. But how much housing will be demolished and how much will be reconstructed, it is still impossible to say even approximately.

"There is no exact mathematics here, each situation must be considered separately. The decision on demolition or reconstruction is made based on the condition of houses after a certain inventory procedure," said the author of the bill, President of the Confederation of Builders of Ukraine Lev Partskhaladze.

By the way, according to the bill, reconstruction can also include any objects, public places (kindergarten, square, etc.), and not just residential buildings.

If your home is still included in the renovation program, you will not be able to choose a developer for your new home. Responsibility for signing the agreements rests with the local authorities. However, there are several bonuses.

First bonus. The new housing will be located in the same administrative district so that after the move people can use the usual infrastructure: a clinic, a kindergarten, a school.

Second bonus. First, a new "start-up" housing should be built, and only then will the demolition take place. This will minimize the chances of program participants having to wait 25 years for their homes.

The combination of these two norms narrows the scale of the renovation because vacant land next to obsolete housing is far from everywhere.

“The initiative is skeptical because every playground is already built up in my microdistrict. I don’t see any options where you can move, therefore I don’t see any prospects,” Vera Radchenko, ex-deputy director of the housing policy department of the Ministry of Regional Development, wrote on the social network.

Possible abuse of such a site can discredit the entire renovation process.

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"For the construction of housing for the relocation of citizens (a flexible fund), first of all, you need a plot, all permits, etc. The success of the entire reconstruction project will depend on how this process is arranged," emphasizes Yuri Pita, President of the Association real estate specialists in Ukraine.

In addition, renovation projects must comply with building codes. And in 2018, building density requirements were introduced. Even if the land is found, it is unlikely that low-rise construction will be profitable for developers. That is, not all neighborhoods will be able to immediately find their potential developer-investor.

Third bonus. The bill states that during the renovation, all the accompanying infrastructure must be created, repairs must be made in the new apartment. Moreover, tenants should even be helped to move to a new home.

Apparently, all these obligations fall on the developer himself. So there is a risk that it would be advisable for an investor to participate in the renovation only in large cities, so there are doubts that the housing stock will really be able to be renovated throughout Ukraine.

The main stumbling block is communications. Communications, according to Partskhaladze, will be built anew, because the renovation envisages the demolition of not individual houses, but entire blocks.

The bill does not clearly spell out in which cases engineering, transport, and social facilities should be built from city budgets, and in which - at the expense of the developer. Everything will be resolved pointwise.

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"It is necessary to clearly indicate who will finance the laying of new engineering networks. In the cost of building a new multi-story building, the cost of arranging networks can reach 40-60% of the total cost of construction," says Yuriy Pita.

If the responsibilities fall on the investor, they can become overwhelming for him, because he will have to give 100% ready housing and relocate people to it. It is easier for investors to build new housing for sale without unnecessary hassle, where about 2-3 million more squares of housing can be built. Of course, with the exception of microdistricts, which a priori will be more interesting than others. For example, Pechersk. That is, the resettlement will mainly wait for residents of only the most "tasty" areas. The rest of the housing, most likely, will be renovated in the framework of public-private cooperation - this also implies a new concept.

However, the presence (or rather the complete absence) of one small nuance in the bill can make developers interested in the renovation. Moreover, the tenant himself can indirectly pay for such an interest.

Tempting area

The size of the new housing will depend not on the number of housing registered in the apartment when issuing new housing, but only on the size of the current square. This is logical because in this case, it will be possible to avoid the mass registration of relatives in the house for demolition. However, there is not a word in the bill about the coefficient itself, on the basis of which the size of future housing will be calculated.

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According to the current law, for every 100 sq. m of the old one must be provided with 150 sq. m of new housing. If the initiative is voted for, the coefficients will be set after the inventory.

Partskhaladze explains this by the different investment attractiveness of the regions: for example, Pechersk and Troyeshchyna.

"Obviously, the attractiveness of living space in different districts is very different. If in the center of Kiev developers agree to a coefficient of even 2, then in more remote areas it will be less. the provision of apartments of the same area. The coefficient should be economically justified and set by local authorities. Just like the customers of the reconstruction should be the local authorities, it is clearly spelled out in the new bill," he stressed.

Thus, it cannot be ruled out that during the renovation, the area of ​​the apartment will be even less than that which was before. An old kopeck piece, for example, will become a one-room apartment.

It is unlikely that the variability of the coefficient is the interest of citizens who are tired of fighting with conservative neighbors. Obviously, the innovation is attractive primarily for developers (which, in fact, is Partskhaladze himself).

The ex-Deputy Minister of Regional Development himself emphasizes that the adoption of decisions on the establishment of the coefficient was legally assigned to local governments at the level of sessions of city and village councils. In his opinion, this should minimize the risk of manipulation with the recalculation of the area. He is confident that tenants will be able to win and capitalize their property even twice.

"If you organize the procedure of resettlement correctly when demolishing outdated houses, it will increase the interest of the residents of Khrushchev, because they will be able to capitalize their property by half," he says.

One way or another, the chances that "agreements" between developers and local authorities will lead to the most unexpected results for tenants, no one ruled out.

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In general, the proposed renovation concept is in many ways similar to the Moscow approach. The renovation program of the capital of Russia included 5174 five-story buildings, and within its framework, fifty houses have already been successfully built. The project was quite successful. With one "but": only those houses where all tenants voted "for" could participate in the Moscow project. In addition, even by agreeing to participate in the project, you can leave it.

But what if the conditions of the renovation do not suit you as a resident of an outdated house?

100% consonant to 75%

At the moment, without the consent of all 100% of the tenants of the house, they cannot demolish it or reconstruct it. That is why, in spite of the fact that the law on housing renovation has been in effect since 2006 and formally the housing stock can be renewed for a long time, the renovation has not begun. Many Ukrainians do not want to say goodbye to their homes and expensive repairs, or they oppose the compaction of buildings and the piling up of cars.

Even last year, experts were supposed to examine the technical condition of potential buildings for demolition or renovation, but the city budget did not allocate money for this. If the conditions for the developers do not soften, the complex renovation will not begin. This means that the money for the inventory will again be wasted, because the condition of the houses is deteriorating every year, and the technical inspection of the premises will have to be repeated.

In the Ministry of Regional Development, new bills are periodically developed, according to which the consent of a smaller number of residents is required for demolition. Even now, the officials planned to seek the consent of only 75% of all residents. If three-quarters of your neighbors are in favor of resettlement, and you disagree with their desire, you will still be resettled to a new house.

75% is still a high threshold for investors to enter the project. But in general, such an indulgence can really interest developers. However, it is impossible not to take into account the human factor in such a delicate issue.

Even in England, where it would seem that demolition should have gone without problems, the lack of public consultation in the renovation of old houses led to serious problems. Residents quarreled among themselves, filed lawsuits, and as a result, the districts simply turned into urban wastelands. Nearly $ 3 billion in public funds has been wasted.

Since the demolition will not only concern emergency housing, it is likely that constitutional changes will be needed to pass the bill.

Those whose houses still won't be demolished will be repaired. If funds are not found to replace rotten pipes, they will most likely carry out thermal modernization. In order not to expand the warm credit program - at the expense of the developer they can insulate the perimeter, basement, roof, replace windows and doors. Then it will be possible to avoid mold, cracks in the walls and slightly delay the demolition of housing. All this, of course, will be possible only if it is possible to motivate the developer with tax preferences or by providing him with a free building site. And, again, when making amendments to the Constitution.

And what, the Khrushchev-era buildings will disappear?

This bill will not be adopted by a single mono-majority. So will there be voices for him in the Rada?

The probability of failure is quite high due to the risks of disagreement of Ukrainians with a number of novelties of the initiative, as well as a fraud on the part of contractors.

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"The bill is able to positively affect citizens' confidence in developers and their investment in new buildings. But, despite the importance of the new document, the question of the coefficient and the percentage of citizens who agree with the reconstruction can become very controversial when the document is considered by the people's deputies," Yuri Pita emphasizes.

As for the rest of the risks, Partskhaladze is sure that a typical standard form of contract with a contractor approved by the Cabinet of Ministers will become a sufficient safety net. However, experts do not exclude the creation of a corruption niche.

By and large, in order to take part in the investment competition, the developer must already receive all the documents and develop his project. that the competition will be able to participate only by those companies who have “prepared. At the same time, the document does not contain information whether the competition will take place if, for example, only one application is submitted,” real estate expert Oleksandr Izarov commented in the media.

And the president of the Association of Real Estate Specialists of Ukraine emphasizes that an effective renovation program can only be in the presence of clear financial calculations.

"The bill needs to adopt other regulations that would regulate the mechanisms for attracting private investors. The roadmap must be clearly spelled out (these are the concepts of new quarters, transparent auctions, tenders, who will have the right to be admitted to such tenders), adherence to construction deadlines, the ratio of private companies, and the local budget, etc.," he emphasizes.

Architect Stanislav Demin also does not build castles in the air around the initiative. He believes that in terms of economic effect, everything will depend on specific special cases.

 

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