Forbes Development discussed measures to unlock the development of Ukrainian cities

During the first panel discussion at the Forbes Development Forum, representatives from government, the real estate development sector, and the media discussed new rules for urban development, the need for a national housing strategy, the updating of urban planning documents, and safeguards against government inaction.

The first panel of the forum—“Building in a New Way: Solutions to Unlock Urban Development”—focused on the issues essential to scaling high-quality development in Ukraine: transparent rules of the game, the reliability of permitting processes, access to land resources, urban planning, financing, and the role of local authorities.

Participants in the discussion included Olena Shulyak, Member of the Ukrainian Parliament and Chair of the Verkhovna Rada Committee on the Organization of State Power, Local Self-Government, Regional Development, and Urban Planning; Yevhen Favorov, Chair of the Ukrainian Association of Developers; Mark Marchenko, Founder of SENSAR Development; and Dmytro Struk, representative of Creator Bud. The panel was moderated by Volodymyr Fedorin, founder of Forbes Ukraine.

Opening the discussion, Volodymyr Fedorin reiterated the mission of Forbes Development:

“The goal of this panel and conference is to elevate the level of discussion surrounding urban development and identify real, key challenges that can be addressed quickly. It aims to bring together developers, communities, the government, and city officials in one place. It is through this kind of collaboration that solutions can emerge to make Ukrainian cities stronger.”

Urban development is impossible without up-to-date urban planning documentation

Olena Shulyak emphasized that in Ukrainian society, development is still often discussed only in a negative context, while far less attention is paid to high-quality urban development, new projects, and companies that continue to operate during the war, creating jobs and addressing issues of national importance.

“We very often talk about developers only in the context of conflicts, the development of green spaces and parks, or other scandals. But we talk much less about development—about the high-quality development of our cities, about new facilities, new projects, and about the companies that remain in the country today, creating jobs and addressing pressing challenges for the state,” said Olena Shulyak.

She identified the state of urban planning documentation at the local government level as one of the key issues. According to her, developers often own land parcels and are ready to move forward with projects—particularly on the sites of former industrial zones—but are unable to proceed due to the lack of approved master plans, detailed zoning plans, or modern comprehensive spatial development plans.

“One of the biggest obstacles to development today is the level of local government and the state of urban planning documentation. Many developers are already ready to move forward with projects, particularly on the sites of former industrial zones, but due to the absence or delay of decisions regarding urban planning documentation, these projects are effectively stalled. This is a factor that hinders the development not only of individual cities but of the country as a whole,” Shulyak emphasized.‍

She noted that local communities were required to prepare comprehensive spatial development plans by January 1, 2025, but the deadline was extended to January 1, 2028. At the same time, she said, some large cities are not making sufficient progress.

“Small communities that are eager to attract investors and businesses are making an effort: they’re developing strategies and comprehensive spatial development plans, and demonstrating a willingness to operate under transparent and clear rules. In contrast, large cities, where investor demand is significantly higher, often still prefer to work with developers on a case-by-case basis,” noted Olena Shulyak.

Yevgeny Favorov: The government needs a clear goal for housing construction

Yevhen Favorov, head of the Ukrainian Association of Developers, emphasized that the industry’s main problem lies not only in regulation or specific decisions by local authorities, but in the lack of a clear national goal regarding housing construction.

According to him, Ukraine has a genuine need for millions of new apartments, but there is no consensus on the tools, pace, and resources required to meet this need.

“Today, we are building about 80,000 apartments a year. Before the war, we were building about 100,000. At the same time, the country’s actual need is for millions of apartments. But no one can say exactly how we are supposed to achieve this goal. We have statistics on construction volumes, the number of mortgage loans, land plots, permits, and certificates of occupancy. But what’s missing is the most important thing—a national goal for housing construction,” said Yevgeny Favorov.

According to the Association’s chair, it is the government’s responsibility to establish clear guidelines for all stakeholders—central and local authorities, businesses, and citizens. If communities fulfill their responsibilities and create the conditions necessary for construction, they should receive incentives. If, on the other hand, they fail to approve the necessary documentation for years and effectively block development, safeguards must be put in place.

“The second key problem is the lack of safeguards in case local authorities fail to act. If cities fail to approve 10- to 20-year master plans, if detailed zoning plans are not adopted, we must understand: from the perspective of local politics, it is often easier to do nothing, avoid taking responsibility, and refrain from building housing. But the country cannot afford such inaction,” Favorov emphasized.

He also noted that even before the full-scale war, Ukraine had a low level of housing availability compared to European countries. Therefore, the goal of increasing housing construction should have been a priority long before, and now it has become critical.

“We must work toward increasing housing availability for people in the country. But this is impossible without clear goals, without a coherent policy, and without safeguards that prevent anyone from blocking progress through inaction or micromanagement,” added the head of the Ukrainian Association of Developers.

The housing strategy should serve as a roadmap for the government, businesses, and communities

Olena Shulyak supported the argument that a national housing strategy is necessary. She noted that Parliament had passed a new law on housing policy, which replaces the outdated Housing Code of 1983. The next step should be to implement the law and adopt a national housing strategy.

“The first step we expect from the Ministry of Regional Development is a national housing strategy. This is exactly the issue Yevhen was talking about: how the government envisions our direction, which regions we’re targeting, under what conditions, and with what resources,” Shulyak said.

According to her, the new legislation provides for the introduction of social and affordable housing models, which previously did not exist in Ukraine. At the same time, the business community does not yet understand how these mechanisms will work in practice, as the necessary implementing regulations have yet to be adopted.

“For everyone working in the housing sector, the government strategy should serve as a roadmap. It should explain how the government envisions the development of housing in Ukraine, how social and affordable housing operators will function, what resources will be allocated, and how these decisions will be integrated with other planning documents,” said Olena Shulyak.

The stability of regulatory documentation as a key requirement for mortgages and international financing

A separate segment of the discussion focused on the stability of permits. Yevgeny Favorov noted that as recently as last year, at Forbes Development, market participants had discussed the risks of construction being halted at any stage due to attempts to revoke permits.

“This isn’t just a matter for developers. It’s about providing people with housing and ensuring affordable mortgages. When we go to banks, one of the first questions is: what happens if activists or law enforcement agencies come to revoke the permit? Over the years, the business sector has learned to work around this, but for the systematic financing of the market, such uncertainty is a critical problem,” Favorov explained.

Olena Shulyak also emphasized that the risk of these documents being revoked at any moment acts as a deterrent for international financial institutions:

“The European Investment Bank, the EBRD, the IFC, and others are aware of this problem. They are not willing to provide financing, invest funds, or offer financial instruments when there is a risk that documentation issues could arise at any moment during any stage of construction,” she said.

According to Shulyak, the rationale behind the necessary changes is that the government should have a limited period of time to verify the validity of the documents issued. If no violations are found during this time and no appropriate measures are taken, businesses should be guaranteed stability and the opportunity to continue operating.

Industrial zones as a resource for a new approach to urban development

Yevhen Favorov specifically highlighted the issue of land resources. According to him, Ukrainian cities have significant potential for the revitalization of industrial zones—areas that are often underutilized, falling into disrepair, and degrading the quality of the urban environment.

“Cities have great potential in their industrial areas, which today are often underutilized, neglected, and actually detract from the urban landscape. Such sites could host comprehensive projects featuring housing, social and transportation infrastructure, schools, and spaces for work and life. But the problem is that without action by local authorities, it is impossible to approve the necessary urban planning documentation,” Favorov emphasized.

Cities must compete for people, investment, and business

During the discussion, Mark Marchenko emphasized that urban development depends largely on the stance of local authorities. According to him, some communities are open to innovation and collaboration with the business sector, while in other cities, even high-quality, modern projects face micromanagement and bureaucratic obstacles.

“A great deal depends on mayors and local authorities these days. There are cities that are open to innovation and a European model of development. And then there are cities where you arrive with a modern infrastructure project, bring in brands, and create a new standard of quality, only to run into absurd restrictions and arbitrary rules,” said Marchenko.

At the same time, he noted positive changes at the central government level, particularly the reform of the State Agency for Information and Communications Technologies (DIAM) and the gradual digitization of procedures.

“The government has taken important steps, including the reform of the State Agency for Urban Development (DIAM). Not all developers have adjusted to the fact that they no longer have to pay bribes but must operate within the rules. It may sound cliché, but adapting to new rules without corruption is also a difficult process. At the same time, this is the right direction, and it helps the market become more transparent,” Marchenko noted.

Speaking about the new economic geography, he added that investment flows to places where cities are ready to welcome it.

“Money flows to places where people are willing to accept it. Not all cities have proven ready for the influx of investment, developers, and new projects. Sometimes a city claims to be open, but in practice, it’s almost impossible to get in,” he said.

The war has intensified competition among cities for human capital

Dmytro Struk noted that the real estate development sector is currently operating amid a high degree of uncertainty stemming from the war, security risks, and investor behavior. At the same time, he emphasized that high-quality housing, energy independence, infrastructure, and strong urban communities will be key factors in encouraging Ukrainians to return.

“The key question for developers today is: who are we building for? Who will live in Kyiv, Lviv, and Odesa? Mayors must fight for the people and give businesses the green light. We’re talking about high-quality, stylish, energy-independent construction, proper infrastructure, and strong communities so that Ukrainians who have left will want to return,” noted Dmytro Struk.

According to him, it is not just a matter of competing for investment, but also of competing for people and talent.

“Today, there is a global competition for people and talent. Cities that can create high-quality living conditions will have the advantage,” he added.

Among the promising areas for development, Struk singled out Kyiv and Odesa, highlighting Odesa’s potential as a port city, a recreational hub, and a city with a rich history.

What needs to be done before the next Forbes Development

In the final roundtable discussion, the panelists identified the key tasks that need to be addressed over the course of the year, leading up to the next Forbes Development.

Mark Marchenko cited the development of mortgage lending as one of the most important tools for stimulating demand.

“The ‘eOselya’ program is already stimulating construction. If it were scaled up or if a full-fledged mortgage lending program were established, this could give a major boost to development,” said Marchenko.

Dmytro Struk emphasized the need to actively encourage people to return to Ukraine and to attract highly qualified professionals from other countries.

“We need to actively encourage people to return to Ukraine and invite top experts from around the world to come here. This is a matter of human capital and future development,” he said.

Yevgeny Favorov identified the main goal for the year as establishing safeguards against inaction on the part of state and local authorities.

“We need to put safeguards in place against inaction—both by local and national authorities. That is the main goal. It should lead us to a situation where the necessary resources for housing construction are available: land, personnel, and funding,” concluded the head of the Ukrainian Association of Developers.

Olena Shulyak identified four key areas essential for business and development: access to financing, infrastructure development, regulatory frameworks and digitalization, as well as human capital.

“We need to work in four areas. First, access to financing, because the country has a lot of work to do to attract funds and support programs like eOselya. Second, infrastructure: without roads, social infrastructure, and basic amenities, no one will want to live here. Third—regulatory rules and procedures, where digitalization must become a cross-cutting theme in the fight against corruption risks. And fourth—people. Human capital is the number one issue today, particularly for the construction industry, which is already suffering from a shortage of workers,” Shulyak emphasized.

In wrapping up the discussion, the participants agreed that the development of Ukrainian cities requires not piecemeal solutions, but a systemic overhaul of the rules of the game. This calls for a national housing strategy, up-to-date urban planning documentation, stable permitting procedures, accountable local authorities, access to financing, and dialogue between the business sector, the government, and communities.

The Ukrainian Association of Developers has consistently advocated for the creation of a transparent, predictable, and fair real estate market. After all, quality development is not just about building homes. It is about the development of modern cities, economic recovery, bringing people back to Ukraine, and a new quality of life for Ukrainians.

This year, the Ukrainian Association of Developers supported Forbes Development for the second time. We believe it is one of the key platforms for professional discussion on the future of residential construction, the country’s reconstruction, and the development of Ukrainian cities.

‍