Rent-to-own after 10 years: Ukraine is developing a new model of social housing, says MP Shulyak.
A novel housing rental arrangement, offering the option to eventually own, could be implemented in Ukraine. However, this will not encompass all properties. It is anticipated that this provision will be applicable to social residences, but renters will need to reside in the dwelling for a minimum of 10 years to be eligible.
Parliamentarian Olena Shulyak (Servant of the People party) shared this information with OBOZ.UA. She indicated that efforts are underway on draft law No. 12377 “Concerning the Foundational Principles of Residential Policy” to institute rent-to-own schemes in Ukraine. It is currently being prepped for its second reading.
As per Shulyak’s statements, the regular monthly rental payments made throughout these 10 years are intended to be factored into the overall price of the residence. As such, the opportunity to acquire the property will arise upon the lease’s termination.
Additionally, the expense of acquiring the housing will be no less than the expenditure on newly constructed social dwellings intended to replace it. This implies that occupants of older structures, for instance, will be obligated to remit rent equivalent to that of new constructions.
The central idea, Shulyak clarified, is that funds derived from tenant acquisitions will be channeled into a designated fund earmarked for financing the development of fresh social housing units. Consequently, by securing permanent housing for themselves, Ukrainian citizens will contribute to the provisioning of residences for others.
What comprises social housing?
Concurrently, according to Shulyak, a principal aspect of the bill will be the establishment of a Social Housing Fund, encompassing both governmental and municipal entities. Housing from this fund will be allocated on a provisional basis:
- for social lease – wherein rental expenses will remain below 25-30% of the household’s earnings;
- as service housing.
The fund is projected to be replenished predominantly by structures under the jurisdiction of communities and the state. However, this will necessitate a preliminary inventory of such dwellings, notably including unfinished constructions, of which, as per the MP, there are presently hundreds across Ukraine.
