In EU countries, the percentage of social housing can be up to 50% of real estate. Whose experience Ukraine should borrow

The housing policies of European countries have several models and different levels of social housing segments that can be adopted by Ukraine. These include the possibility of freezing rents for social housing, redistribution of margins from the sale of apartments that were leased with the right to buy, as well as subjective and objective subsidization of rent for people in need of social housing.

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, Head of the Servant of the People party.

According to her, there are different models of social housing in the world, but the understanding of this term is not the same. Social housing is usually offered to people with low incomes. It can differ in terms of area, cost, layout, architecture, location, scope and types of possible utilities, etc. However, the need for social housing has always existed and its solution is a challenge for each country.

For example, in Belgium, social housing is provided by municipalities, state-owned companies, cooperatives or commercial organizations to individuals or families in difficult social or financial situations. It is allocated on the basis of income and priority groups. The category of social housing in this country is close to the category of "intermediate" housing, which is provided to people in need of state support.

In the Netherlands, Shulyak added, social housing is built by non-governmental funds, which then rent it out at subsidized rates that do not exceed a set amount, with the rest paid by the state.

"If a family is unable to pay even the minimum rent, they are helped to apply for a state subsidy or move to smaller housing. From time to time, the funds sell individual houses or apartments and spend the money on new projects. They sell the apartments to their tenants, offering significant discounts, but with a condition: in case of resale, the margin is divided between the fund and the seller. We have envisaged a similar mechanism for Ukraine - the new housing legislation provides for a lease with the right to purchase," said Olena Shulyak.

According to her, the fact that social housing in Amsterdam occupies more than 50% of real estate is indicative. At the same time, rents in social housing are controlled, and therefore annual rents cannot grow by more than 4.3%.

In Denmark, social housing is owned by the state and owned and managed by municipal non-profit organizations that cooperate with municipalities. The main principle of non-profit housing in Denmark is its accessibility regardless of income, social status or age. Rental rates for such housing are significantly lower than market and fixed rates. At the same time, information about social housing is open to all citizens through a waiting list. The rent is used for joint maintenance of the buildings and invested in new construction.

"In Denmark, approximately one million people live in social housing. This successful model has existed for more than 100 years and deserves to be adopted. The possibility of implementing this experience is evidenced by the fact that Denmark and the Mykolaiv Regional Council signed a memorandum on the reconstruction of the region in March 2023, under which Denmark created the Ukrainian Housing for All Foundation to develop and implement an affordable rental housing program in Ukraine based on the Danish model. Three pilot projects are planned to be implemented. At the same time, a special economic model should be created that will allow using rental income to increase the number of affordable housing in Ukraine," said the head of the Urban Development Committee.

She also noted that the experience of Germany, where two-vector subsidization is used to provide social housing - subject and object - may be quite interesting for Ukraine. Those who need help paying for housing receive housing subsidies, which, under certain conditions, can fully cover the rent. Object-based subsidization is directly related to the construction of social housing, as it involves subsidizing investors in the construction of social housing, for which the rental price will be fixed. Fixing the rental price is a key feature of social housing," Shulyak said.

She added that in Germany, in addition to a construction subsidy, investors can receive a long-term low-interest loan or land plots for construction on favorable terms. Both private and public economic entities are involved in the creation of social housing.

"The condition for obtaining a permit for social housing in Germany is a relatively low annual household income. The Federal Law on Social Housing defines the principles and methodology for calculating the eligible income, but specific figures are set by the Länder based on the local economic situation. For example, Baden-Württemberg has a very high threshold for access to social housing, and therefore, even quite wealthy households can apply for social housing," noted Olena Shulyak.

The parliamentarian also noted that in some European countries, not only low-income families can apply for social housing. In particular, in Finland, social housing is also provided to those who need help with independent living - the elderly, people with disabilities, people with developmental disabilities. In addition, it is provided to people who are being treated for mental health problems, or people with drug or alcohol addiction. At the same time, people living in Finland are entitled not only to social housing at correspondingly lower rental rates, but also to a living allowance that can cover rent, housing and utility bills, as well as water and heating costs.

"In Poland, citizens in difficult life circumstances are also entitled to social housing. Minors, people with disabilities, pregnant women, homeless people, victims of violence, victims of repression, and people living in houses that are subject to demolition have priority in obtaining social housing. However, it should be noted that this type of housing is characterized not only by low rents, but also by low standards," said Shulyak.

At the same time, she noted, there are other segments of social housing in Poland. Communal housing, or as it is also called municipal housing. It has higher standards than social housing, which also implies higher rents. At the same time, municipal apartments can be bought by tenants in certain cases.

"So, as we can see, in foreign practice, there are different segments of social housing, and at the same time, lease relations are prevalent in this area. We have studied the effective experience of European countries in this regard and adapted it to Ukrainian realities. The best practices have become the basis of our draft law on the basic principles of housing policy, which will soon be registered. However, without waiting for the adoption of the framework draft law, we started working on a draft law on social housing. Our goal is to adopt these documents by the end of this year, as new housing legislation is a requirement that Ukraine must fulfill in order to receive EUR 50 billion from the EU under the Ukraine Facility program," summarized Olena Shulyak.