Administrative Barriers in Residential Construction: Results of the First Annual Industry Survey

About the study

The Ukrainian Association of Developers conducted its first annual industry survey of developers regarding administrative barriers in residential construction. The goal is to identify key procedural issues, assess the actual timeframes for obtaining approvals, and determine priority areas for reform.

The survey included over 120 respondents —owners, shareholders, CEOs, and specialists from real estate development companies in the legal, construction, commercial, and design-engineering sectors. The participating companies account for over 25% of Ukraine’s primary residential construction market.

The government creates demand—but the market cannot respond immediately

This is the main finding of the study. Through the e-Oselya program, compensation for destroyed housing, and initiatives for military personnel, the government has become one of the key drivers of demand for new housing. But even strong demand does not automatically translate into new apartments—it takes at least 2–4 years from the decision to build to the buyer receiving the keys. And a significant portion of that time is spent not on construction, but on administrative preparations.

“The market cannot meet demand immediately: developers build to order, and by the time a building is completed, 80–90% of the most marketable apartments have usually already been sold. Therefore, if the government wants to secure additional housing for its programs, it will take time—at least 2–4 years, a significant portion of which is devoted to the administrative preparation of the project. — Yevhen Favorov, Chairman of the UAD”

The average duration of administrative procedures—from land registration to obtaining a building permit—is 14.4 months. That’s over a year of purely administrative work before the first construction worker even sets foot on the site. For comparison: the full construction cycle for a typical comfort-class residential complex takes 3–4 years. In other words, administrative preparation accounts for one-third to one-half of the total project implementation period.

How long does each stage take?

The survey recorded the average timeframes for each key stage of administrative preparation. Registration of land rights: 13.3 months. Obtaining urban planning conditions and restrictions: 9.78 months. Technical specifications: 7.37 months. Building permit: 6.64 months. Certificate of readiness for operation—another 5.97 months.

It is worth noting that the administrative burden does not end with the start of construction—it accompanies the project at every stage. Even after construction is complete, the developer spends about six months getting the property ready for occupancy.

Nearly a third of survey respondents noted that the total duration of administrative procedures exceeds 18 months. Sixteen companies reported more than 24 months, and another eight reported more than 36 months.

What is the biggest obstacle?

The market has clearly identified five major barriers to the implementation of real estate development projects:

• MUO — difficulties in obtaining urban planning conditions and restrictions (35%)
• Land and property relations — legal uncertainty, competing claims, and administrative complexity (30%)
• Uncertainty regarding permits—revocation of approvals by third parties, changes to conditions during construction (24%)
• Technical specifications — difficulties in obtaining technical specifications (22%)
• Constant changes to the rules—instability in legislation and regulatory requirements (20%)

Respondents also identified the most critical barriers—those that do not merely complicate the work but actually bring the project to a standstill:

• MOU is a systemic problem that combines administrative barriers with the risk of corruption
• Pressure from law enforcement and regulatory agencies
• Land and Property Relations
• Constant changes to the rules of the game

MUOs ranked first among both general and critical barriers. Olena Shulyak, chair of the relevant Verkhovna Rada committee, commented on this as follows:

“MUOs have effectively become a quasi-regulatory tool that creates corruption risks, reinforces the monopoly of local authorities, and, in some cases, places developers in a dependent position.”

Where optimization is most needed

Government Procedures

Among government procedures, the market most urgently needs simplification in the area of cultural heritage protection—49% of respondents identified this as a problem. This procedure is particularly relevant for city centers and is a source of prolonged and unpredictable delays.

Local procedures

At the local level, the most pressing issue is urban planning documentation—its absence or obsolescence prevents projects from getting off the ground at the very outset.

• Zoning plans and urban planning documentation — 55%
• Land registration — 39%
• Receipt of MUO — 38%
• Approvals in protected areas — 19%
• Complaints from municipal services — 12%

The lack of up-to-date urban planning documentation is not merely a regulatory issue. It has direct economic consequences: land plots remain undeveloped, investments are put on hold, and new apartments do not enter the market. Roundtable participants cited cases where master plans have not been put to a vote for years, and land assets are effectively “frozen.”

The most challenging stages of the project

• Obtaining source data — MOU and TU (37%)
• Land and Property Relations (36%)
• Connection to utility networks (35%)
• Urban planning preparation (34%)

It is noteworthy that the construction phase itself—specifically, quality control and supervision—turned out to be the least problematic stage (3%). Developers know how to build. The problems arise before and after.

Network connectivity: a major pain point

Connecting to utility infrastructure is one of the three most challenging stages of a project. The most common issues arise with electricity supply (40% of companies), water supply and drainage (35%), heat supply (24%), gas supply (22%), and roads and transportation (13%).

Alexander Novitsky, Head of DIAM, noted that the section on technical specifications and network connections requires a separate reengineering effort—involving a transition to a unified digital process and a “single window” for the customer.

Trust in the government and assessment of changes

Despite the challenges, the industry generally views the trend in regulatory changes over the past four years positively: 67% believe that regulation has improved, 11% have not noticed any changes, and 22% believe that it has gotten worse.

The level of trust in state agencies stands at 5.0 out of 10, while trust in local authorities is only 3.0. The lower level of trust in local authorities correlates with the fact that it is precisely local procedures—urban planning documentation, municipal administrative bodies, and land issues—that are the most problematic.

The reform of the State Architectural and Construction Inspection (DABI) → State Architectural and Urban Planning Inspection (DIAM) received the highest score among all measured indicators—7.04 out of 10. The industry views this transition positively and considers it a step in the right direction.

Digitalization: 94% are already in the system

94% of participants use Diya or the Unified Electronic System for State Services (UESS) in their work—only 4 out of more than 120 respondents answered “no.” The most common method of submitting documents is via the UESS (33 companies), followed by Diya (22), the Administrative Service Center (5), and offline (only 1).

The basic digital infrastructure is already in place. The problem isn’t that the market isn’t ready for digitalization—it’s already there. The problem is that digital tools don’t yet address substantive barriers: the lack of urban planning documentation, the opacity of municipal authorities, and the complexity of land procedures.

Developers support digitalization because it shortens the time required to complete procedures and minimizes corruption risks. At the same time, digitalization cannot replace solutions to the industry’s systemic problems. Without up-to-date urban planning documentation, transparent rules for issuing building permits, and clear land procedures, even the best digital services will not deliver full results. That is why removing these fundamental barriers must be one of the top priorities.

Conclusions and Next Steps

The survey results paint a clear picture: administrative barriers are not an isolated industry-specific problem, but a systemic factor that affects the volume of new housing, the timing of its entry into the market, and the affordability of apartments for citizens.

Key priorities for change identified by the study:

• Reform of the MUO system — a shift from a discretionary to a regulatory mechanism for issuance
• Updating and digitizing urban planning documentation at the local level
• A single digital portal for technical specifications and network connections
• Simplification of cadastral and land procedures
• Stabilization of the regulatory environment — fewer rule changes during project implementation

The Ukrainian Association of Developers emphasizes that establishing predictable, transparent, and uniform rules is an essential prerequisite for the development of residential construction, increasing the housing supply, and fostering a robust investment market in Ukraine.

The survey results will serve as the basis for the Association’s future advocacy efforts in collaboration with the government and the professional community.