Panel "Development and government: cooperation for urban development"

Lviv Build Forum hosted a discussion titled "Development and Government: Cooperation for Urban Development." Representatives of leading development companies, the head of an industry association, and the head of the parliamentary committee in charge of urban development joined the discussion. The panel brought together different voices of the industry: developers, lawmakers and experts to discuss the challenges the market is facing today and opportunities for its recovery.

Among the participants were:

• Rostislav Melnyk, CEO of RIEL;
• Roman Davymuka, CEO of AVALON;
• Roman Korzhak, Managing Partner and CEO of BLAGO;
• Yevhen Favorov, Chairman of the Ukrainian Association of Developers (online participation);
• Olena Shulyak, Head of the Verkhovna Rada Committee on Organization of State Power, Local Self-Government, Regional Development and Urban Planning;
• The discussion was moderated by journalist and TV host Tetiana Honcharova.

Lack of market statistics

One of the first topics discussed was the quality of housing construction statistics. It turned out that the market currently operates with only a minimal set of basic indicators, while they are clearly not enough to fully understand the situation. Mr. Davymuka emphasized that the industry is actually one of the least data-driven:

"We still don't understand how much of the commissioned housing is habitable. This is a huge challenge, because investors, especially Western investors, need specific numbers, not assumptions."

According to Davymuka, today developers are mainly focused on their own internal analytics. This allows them to plan for a maximum of 1-2 years ahead, but does not create the basis for long-term market development.
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Forecast: lower volumes and higher prices

Another painful topic is the decline in new construction. Rostyslav Melnyk reminded that the statistics already show a serious decline:

"The reality is that more than 95% of the housing on the market is actually preliminary projects. According to the SACI statistics, permits were obtained for 176,000 apartments in 2021, and about 60,000 apartments in 2024-2025. Today we cannot build 2-4 phases at a time, we need more investment and equity. Eric Naiman said that there will be a "hole" in the supply in the coming years and this will lead to price increases. This is true. In 2-3 years, apartments will be more expensive."

Consequently, the market expects a significant shortage of new supply, which will inevitably lead to higher housing prices for end users.

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Difficulties with permits and risks

Roman Korzhak drew attention to the problems with obtaining permits and changing the designated purpose of land plots:

"Today, it takes 1-2 years from the start of the project to the start of construction. This is too long. There are conflicts at the legislative level, when the master plan provides for something, but the Land Code does not. There are certain rules that work against us. It would be great if all documents and permits were issued quickly and smoothly. This would create the movement and dynamics necessary for the development of the industry."

In his opinion, Ukraine should introduce more modern technologies, in particular industrial construction, which, for example, in Finland, allows to build a high-rise building in 4 months.

Another key barrier to attracting investment outlined by the speakers is the risk of canceling land rights and the resulting lengthy litigation. Roman Davymuka emphasized:

"The No. 1 problem is the possibility of canceling property rights, the right to build, and permits. With such a history, we will not attract a large international investor to the country."

No less significant are the absence of the "right of tacit consent" and the lack of the necessary dialogue between the Ministryof Culture and the market.‍

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Government programs: support through eOselya and new tools

The discussion focused on government support for the market. Olena Shulyak said that thousands of Ukrainians have already been able to get affordable housing thanks to the eOselya program:

"This week, we have crossed the 20,000 mark in eHouse loans and have 16,000 housing certificates sold. The state is helping the construction market and people through such government programs. In addition, starting from 10.09, all IDPs can take advantage of the new support of eHouse. The state will finance 70% of the down payment and interest for the first year. This significantly expands the opportunities for Ukrainian families."

She also spoke about the work on the implementation of escrow accounts and project financing.

Key market challenges

Yevhen Favorov, head of the Ukrainian Association of Developers, spoke extensively about the industry's problems. He emphasized that real estate sales have recovered to only 30-40% of the pre-war level, and the lack of financial instruments poses a threat of a housing shortage:

"Citizens lack funds, and there are few tools to buy housing. "eOselya covers 3,000 apartments a year, and 80,000 are under construction. That's why subsidized mortgages is not enoughand commercial mortgages do not function because banks are not ready to lend to buyers because of the risks. As for the volume of construction, there will definitely be a shortage of supply later. The market is currently moving by inertia: projects launched and sold several years ago are being put into operation. The market is slowing down. We may find ourselves in a situation where prices will rise."

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Favorov also spoke about the EBA's work with international partners:

"The second mission of the World Bank is currently underway, and the Association acts as a bridge between Ukrainian developers and international organizations. We are studying the European experience. We are working systematically to establish cooperation with industry associations in the EU."

European developer associations offer effective and proven solutions. For example, in Poland, there is a rule that after a certain period of time (5 years), a building permit cannot be canceled. This ensures stability for investors. Why not adapt a similar solution in Ukraine? 

Yevhen also shared an analysis of court cases involving the revocation of construction permits in 2019-2025, of which there were almost 200. It turned out that only 11 cases were canceled, which is less than 6%. In most cases, 72% (144 cases), the courts upheld the permits. Another 21% of cases (44) are under consideration. But the problem is the duration. The average duration of such processes is 16 months, which for the development market means the actual freezing of the project. After all, a building can be built during this period. 

We also touched upon the topic of detailed territory plans. The tool worked successfully in the country and provided some flexibility in the work of construction companies, but it has been canceled since January. As a result, the market has been at a standstillfor 8 months,as there is no planning tool available. 

Polish experience: lessons for Ukraine

Polish expert Michał Glinski, who joined the discussion, shared his own experience of market transformation. In Poland, the key to success was clear timeframes and the responsibility of government agencies. If officials do not meet the deadlines for issuing documents, they pay a fine of €120 per day. And the most important innovation, he said, is the ban on canceling building permits after 5 years:

"The decision has already come into force. In the past, Poland had problems that the building was put into operation, and after 10 years the permit was canceled, and it was a big problem for those who live in these buildings. Now, there is no way to cancel the decision, there is simply no procedure to cancel it. This situation creates predictability and confidence for investors. Developers can work calmly, knowing that their rights are protected," the expert explained.

Tax policy and "share contributions"

They also discussed the issue of share contributions, which, despite being officially abolished, are still the subject of lawsuits. 

The dynamics in Kyiv are particularly illustrative. While in 2021, only 6 cases worth UAH 134.5 million were recorded in the capital, in 2023 their number increased to 11 cases (UAH 128.9 million). In 2024, there was a real surge - 74 cases worth more than UAH 1.3 billion, and in the first eight months of 2025 alone, 31 cases worth UAH 599.2 million. 

Olena Shulyak explained:

"There is no such tax in the world. There is a real estate tax. In my opinion, share contributions create corruption risks. Local authorities could selectively decide who should receive a benefit and who should be charged the full 10%. Some people were credited with a fountain or old utilities that the developer had not even laid. And if they didn't like you, you had to pay the full amount. This is corruption. There are amendments to the bills in the Parliament to finally abolish this practice."

She also noted that the draft budget for 2026 is already receiving ideas to return equity participation in the format of 10% of the construction cost. For example, such a proposal was put forward by the Association of Ukrainian Cities.

It is worth noting that the excessive burden of share contributions puts additional financial pressure on developers, as forced legal costs and delays in processes inevitably affect the cost per square meter. As a result, it is the buyers of new apartments who suffer.

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Conclusion from the discussion

The panel discussion showed that Ukraine is already taking certain steps to support the industry: government programs are in place, and certain bodies are being set up, including the SIAI, whose work was positively reviewed by all. However, the scale of development challenges is many times greater. Lack of funding, lack of project financing, non-working commercial mortgages, lengthy litigation, legislative conflicts, etc. all pose serious risks and hinder market development.

In order to avoid further stagnation and ensure the sustainable development of cities, the industry must learn from European partners and implement best practices, as well as act in a consolidated manner. The main message from the Ukrainian Association of Developers is that we urgently need transparent rules, stable tools, and a dialogue with the authorities. Only in this way can we achieve systemic changes and create a situation in which both business and citizens in need of housing will be protected.

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