It’s been almost a year since the government re-launched an affordable housing program. As in previous incarnations, there’s little to boast about. Young families, the target group, still cannot afford homes even with the limited help that the program offers.
The new program officially kicked off on April 25 with a Cabinet of Minister’s decree that laid out two home-buying options with state backing. One scheme foresees the government covering 30 percent of the cost of housing if the family comes up with the rest.
The other scheme envisions young families getting 15-year, 16 percent annual interest bank loans, with the state later reimbursing the family 13 percent of interest. This scheme requires the home buyer to provide a 25 percent down payment.
The same Cabinet decree set the ceiling price for properties at Hr 7,000 per square meter in Kyiv, Hr 5,000 for Kyiv Oblast and regional centers, and Hr 4,000 for other places. Thus, the cost of a 60-square meter flat in Kyiv could not exceed Hr 420,000 ($52,500) in Kyiv and Hr 300,000 ($37,500) in a city like Ternopil or Sumy.
In contrast, the average monthly income in regional centers is about Hr 3,000 or $375, putting home purchases out of reach for many families. The Cabinet’s new program simply doesn’t bridge the gap between low incomes and high housing prices.
Still, government officials defend the program that set aside Hr 600 million in this year’s budget to finance this program.
Leonid Rysukhin, chairman of the State Fund for Promotion of Youth Housing Construction, said that last year 2,860 families received some form of assistance through this program.
“According to our forecast, this year not less than 6,000 families will get such support,” he said. This year the program only started working in March, and received 370 applications from young families in the first two weeks.
These are, however, tiny numbers compared to the 1.1 million families in need of housing in 2011, according to the government’s own statistics. Igor Lysov, deputy head of the Confederation of Builders of Ukraine, says only 33 percent of young families have satisfactory housing conditions. In Ukraine, many low-income families have three generations living in an apartment or simply share rooms and flats with numerous other renters.
Last year, just five percent of the allotted billion hryvnias was spent on housing for young families, according to Lysov’s estimates.
Andriy Guselnikov, an expert at the Expert’s League of Ukraine, says that each economically active citizen has Hr 38,900 ($4,800) in banks and in cash, which means they simply cannot afford the down payment, which is nearly twice that for a flat in a regional center.
“The government should understand that people who live in Ukraine, mostly are financially unable to take part in it,” Guselnikov said.
Another problem is that the program is almost inaccessible outside of Kyiv, according to vice president of Kyivmiskbud construction company Oleksandr Moroz. “The biggest regional centers, not to mention smaller towns, are actually unable to participate: the population can’t do it because of the low solvency and local governments are not interested in implementing such programs,” he said.
Kyiv Post staff writer Kateryna Kapliuk can be reached at [email protected].
