Construction coma: What the parliament proposes to do with long-term construction and unfinished projects

Ukraine plans to resume the process of inventorying unfinished and long-term construction projects, which was suspended due to the Russian invasion, to help outline the scale of the problem as clearly as possible and to help find optimal solutions.

This was stated by Olena Shulyak, Chairperson of the Verkhovna Rada Committee on the Organization of State Power, Local Self-Government, Regional Development and Urban Planning, at the roundtable "Improving Financial and Credit Mechanisms for Housing Construction to Develop the Construction Industry and Create Conditions for the Reconstruction of Ukraine."

According to her, the state does not yet have up-to-date data on the fund of unfinished housing and the exact number of citizens who have invested in unfinished construction. Therefore, conducting an appropriate inventory together with the Ministry of Community, Territorial and Infrastructure Development will allow us to outline the scale of the problem as clearly as possible. This, in turn, will help find the best ways to solve it.

"Unfortunately, the problem of unfinished and long-term construction projects is not new for Ukraine. We have a lot of illustrative cases in the capital alone: first the infamous Wojciechowski houses, then Ukrbud, Arkada, and now Kyivmiskbud. These are tens of thousands of Ukrainian families who have not yet received the keys to their homes. We need to look for possible ways to solve these challenges across the country, as well as strengthen legislation in the construction sector to prevent the recurrence of such situations," Shulyak emphasized.

An important step towards this, according to the head of the relevant committee, was the Law on Registration of Special Property Rights, which came into force at the end of last year. From now on, all developers have to register special property rights to their facilities in the State Register of Real Property Rights (SRRR), and for this purpose, they have to register each apartment as an integral part of the building in the Unified State Electronic System in the Field of Construction (USESC).

This system will not miss the registration if the developer has not previously received technical specifications, urban planning conditions and restrictions, entered design data, project documentation with an identifier, and an expert report. In addition, the system must have approved project documentation, as well as a document giving the right to perform construction work.

"In fact, such a multi-stage check by the electronic system's algorithms before registering a special property right is an additional guarantee for the investor that the developer is building in accordance with the current legislation," explained Olena Shulyak.

As of now, she noted, several dozen registrations of special property rights have already taken place, meaning that the process has been launched and is gaining momentum. And this, according to the MP, is an important step towards creating transparent rules of the game in the development market and another safeguard against the emergence of new problematic cases.

However, for the successful resolution of the issue of long-term construction and unfinished projects, it is also extremely important that local authorities are ready to join the search for optimal solutions to each specific case, Shulyak believes.

In this regard, the case of the Dolyna community in Ivano-Frankivsk Oblast is illustrative, where local authorities transferred several unfinished construction projects from state ownership to communal ownership and completed them according to all modern standards, including energy efficiency, at the expense of the local budget. And the keys to the new apartments were handed over to the families of our military.

In order to increase the number of such projects on the ground, the Verkhovna Rada recently adopted draft law No. 10202, which gives local government executive bodies the full right to order the repair or comprehensive restoration of social and industrial infrastructure, as well as residential buildings.

"I hope that after the adoption of draft law No. 10202, there will be more important initiatives like the one in the Dolyna community. This is about urban development, social justice, and, in fact, the feeling of local self-government bodies as full-fledged subjects in the public administration system," emphasized the head of the Committee on the Organization of State Power, Local Self-Government, Regional Development and Urban Planning.

Public consultations and the involvement of the expert community to develop appropriate solutions can also help in finding tools to solve the problems of unfinished and long-term construction projects.

According to Shulyak, it would be appropriate to use such a tool as public consultations. The experience of holding them has already become illustrative in improving the program of state compensation for damaged and destroyed property as a result of the Russian invasion, when public discussions helped to identify issues that need to be improved and jointly find solutions to improve them.