Restoration of destroyed apartment buildings pushes housing property transformation in Ukraine

The problem of principal impossibility to satisfy the housing needs of all citizens according to Constitution of Ukraine, subsequent housing property laws and other documents on housing management - was never articulated properly in scientific literature and remains still unsolved. The technical and economic problems of continues improper upkeep of existing buildings, reducing their service life, are also understudied. Ideas of new approach to housing policy firstly appeared in our recent publications. Unlike other researchers, we criticized condominium model, pointing out also on the wrong social policy, imperfect ownership regulations and the need of their scientific rethinking, poor condition of buildings and uncertain cost of its repair, tenant’s insolvency and budget limitations. All authors pointed out on the necessity to transfer poor residential real estate to efficient public or private owners. The history demonstrates that private ownership could play only limited role in housing provision, especially while economic depression or after the war. On the other hand, the value of existing housing property should be taken into account as the household means of payment. In our opinion, in the framework of liberal policy, any external expenses on housing and utility services as well as on capital repair of buildings should be exchanged for the share in property. The challenge appears: how to convert the future state subsidies into renovated public housing? Does the existing Ukrainian form of condominium let us to realize this task? Under conditions of insolvency of apartment owners in the worn-out of destroyed buildings, neither contributions nor loans could be possible, and mass budget subsidies, as we have showed, are socially unfair. Thus, the classic dualistic models could not help. The transition to the unitary model has the same obstacles. Only the corporative model allows to transform the shares of insolvent owner into funds to pay for the building maintenance and operation of dwelling, or, on the contrary, to transmit the ownership to investor who can bear appropriate responsibility. The last case need improvement of Finnish model. Of course, staying in a sort of shared property apartment means partly renting it using the same financial mechanism. Thus, residential property ownership in the legal form of a housing company will also make possible to obtain company’s ownership of a land plot, to register through the corporation the ownership on real estate with a land plot, to clearly define the shares and their value (instead of joint undivided ownership); to simplify these operations by treating shares as movable intangible assets (tokens). There are some additional advantages of corporative house ownership, like direct investments in the development project or company, life-cycle cost control as well as market value depending on the building condition. It could be easier to realize the reconstruction projects. In actual situation with thousands of demolished houses in Ukrainian cities, the housing policy must take into account the combination of existed property and new public or private investments in restoration. In the future, it would be possible also to carry out digital transactions with part of shares divided by tokens treating shares as intangible assets. The proposed model and tools will supplement the existing housing system and could be introduced both in houses under construction and under operation.