Creation of social housing


Sector

Housing

Stream

Creation of a social rental housing fund

Entry into Portfolio

Included in the State Single Project Pipeline

General Information

Program Description

The program is designed for the period 2026-2035 and provides for the creation of a social housing system in Ukraine through the implementation of local investment projects for construction, reconstruction, and major repairs initiated by local governments (hereinafter referred to as local governments), military administrations of settlements formed within the territories of territorial communities, the heads of which exercise the powers of the heads of local governments of the relevant settlement, and regional state (military) administrations. 

The total target number of equipped apartments planned to be created within the program is 50,000 units, which will allow restoring or ensuring access to housing for about 130,000 women and men, children, including their vulnerable categories.

The implementation of the program will contribute to overcoming the consequences of large-scale internal migration caused by full-scale armed aggression, and will also lay the foundation for the modernization of state housing policy in accordance with the standards of the European Union countries.

Target groups of recipients of social housing:

  • Internally displaced persons (IDPs);
  • Medical workers of healthcare institutions;
  • Pedagogical, scientific-pedagogical and scientific workers;Employees of housing and communal services enterprises;
  • Social workers;Servicemen and war veterans;
  • Members families of deceased Defenders of Ukraine; orphans and children deprived of parental care, after completing their stay in relevant institutions.

The list of groups of recipients of social housing is not exhaustive and will be improved with the gradual implementation of mechanisms for differentiating housing support by household income, in accordance with the principles of social justice and international practice.

The implementation of the Program is based on the principles of gradualism, transparency, economic efficiency and sustainability and is based on five fundamental principles that form the regulatory and institutional framework of the new state housing policy:

  1. Inalienability of social housing:  Housing created within the framework of the Program is not subject to privatization, which ensures its long-term use as a public resource for the benefit of the community.
  2. Creation of social housing management companies (affordable housing operators): it is envisaged to form a network of enterprises or institutions that will perform the functions of operators: social housing management, accounting, maintenance, selection of tenants and provision of services to the population.
  3. Combination of various financial instruments: financing the implementation of the program involves the integration of funds from state and local budgets, preferential loans from international financial organizations, non-repayable technical assistance (grants), private sector investments, as well as public-private partnership mechanisms. This approach ensures flexibility, sustainability and optimization of the budget burden.
  4. Transparency of housing provision procedures: clear rules for accounting, prioritization and settlement of persons entitled to social housing are being introduced. All procedures are accompanied by digital accounting, monitoring and must be unified throughout the country.
  5. Socially balanced rental policy: the rental rate is determined as economically justified, but lower than the market rate, with the possibility of further subsidizing or compensating part of the cost for individual population groups in accordance with current legislation.

The program is implemented in three phases:

  • Phase 1: Pilot (2026-2028): provides for the implementation of pilot projects in selected communities (6,620 apartments).
  • Phase 2: Scaling (2029-2031): provides for the expansion of the geography of projects with the construction of at least 14,000 apartments, the use of typical social housing management configurations, the deployment of subsidy mechanisms and the improvement of infrastructure integration (transport, medicine, education).
  • Phase 3: Institutionalization (2032-2035): involves the creation of full-fledged social housing (approximately 29,380 units), the integration of social housing into the state policy system, the formation of mechanisms for housing mobility, personnel placement and support for the population in regions with high demographic risks.

All housing facilities to be created within the framework of the Program must meet high requirements for quality and sustainable development. These include:

  • compliance with energy efficiency standards in accordance with current legislation and European standards;
  • barrier-free and inclusiveness: taking into account the needs of people with disabilities, low-mobility groups, women with children, and the elderly;
  • climate resilience: adaptation to climate change and environmental safety of materials and technologies.

To ensure coordination and quality of the Program's implementation, it is planned to create a single institutional and regulatory architecture, which will include: centralized coordination by the authorized state authority, methodological and technical assistance from international partners; development of standardized management models and use of unified digital tools.

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Strategic Case

Program Goal

Main Goal: Creation of new facilities and services
Secondary goal: Implementation of innovations and energy-efficient solutions, Expanding access to goods and services
Problems: 1. The extent of housing destruction According to the updated Fourth Rapid Assessment of Damage and Recovery Needs in Ukraine (RDNA4), prepared by the Government of Ukraine jointly with the World Bank, the European Commission and the UN, as of December 31, 2024, direct damage to Ukraine’s infrastructure exceeded USD 176 billion. The housing sector remains the most affected sector: approximately 13% of the country’s residential real estate has been destroyed or damaged – almost 2.6 million households, which amounts to USD 57.1 billion or 33% of total losses. Compared to the previous assessment (RDNA3), an increase in direct damage in the housing sector by 26% was recorded, which indicates the duration and scale of the devastating impact of the war on civilian infrastructure. About 75% of the damage in monetary terms falls on four regions: Donetsk (30%), Kharkiv (27%), Luhansk (12%) and Kyiv (8%). Another 18% of the damage is concentrated in Mykolaiv, Chernihiv, Kherson, Zaporizhia and Dnipropetrovsk, Sumy regions. 2. Long-term housing shortage and increasing number of IDPs The housing crisis in Ukraine is protracted. The first wave of internal displacement was caused by the events of 2014 - the annexation of Crimea and the beginning of the armed conflict in Donbas, as a result of which more than 1.5 million people were displaced. The full-scale invasion of the Russian Federation in 2022 caused a new, much larger wave of internal migration. As of mid-2025, according to official data from the Ministry of Social Policy of Ukraine, the number of internally displaced persons is about 4.6 million people. The highest concentration of IDPs is observed in the regions bordering the combat zone or with developed infrastructure: Donetsk, Kharkiv, Dnipropetrovsk, Sumy, Kyiv, Zaporizhia, Odesa, Lviv and Poltava regions, as well as the city of Kyiv. Due to the ongoing hostilities, the number of IDPs is dynamic and continues to change. 3. Housing conditions of IDPs and vulnerability of tenants According to the results of the International Organization for Migration (IOM) study “Housing Situation in Ukraine Review” (July 2024), about 3 million Ukrainians live in damaged or uninhabitable houses. The highest share of such households is in Kherson, Donetsk, Kharkiv, Chernihiv and Mykolaiv regions. The housing conditions of displaced persons are characterized by a number of structural risks: - 37% of IDPs do not have legal rights to the housing in which they live; - 39% fear eviction; - 53% face difficulties in paying rent or utilities; - 29% do not have long-term contracts. Among the population renting housing, there is a high burden on the family budget: - 31% spend more than 70% of their income on housing (rent + utilities); - 54% - more than 50% of their income. This leads to late payments, moving to unsuitable housing, and neglecting basic needs, which increases their social and economic vulnerability - especially in the winter. 4. Lack of affordable housing as a barrier to mobility and integration Housing availability is a key factor affecting the mobility and integration of IDPs. The lack of a sustainable housing solution forces some displaced persons to change their place of residence, and to postpone or cancel their return to their homes. IOM surveys indicate that the lack of access to housing in the new location was the main reason for returning to their place of permanent residence, even in the event of damage or danger. At the same time, a significant part of IDPs who have lost their housing decide to stay permanently in new communities. This creates new challenges for local governments to integrate such citizens, expand social infrastructure, services and plan for long-term development. 5. The need for a state social housing program The analysis of the scale of damage, the growth of the number of IDPs, the social vulnerability of tenants and the challenges for local governments indicates systemic challenges in housing policy in Ukraine. Existing rental mechanisms do not guarantee access to safe, quality and affordable housing for millions of citizens. Rebuilding the destroyed housing stock is a necessary but insufficient response to the challenges. The situation requires an urgent solution to the housing issue for millions of citizens who have lost or do not have access to safe and affordable housing. The answer to this challenge should be a new state model - a social housing system, which will provide long-term accommodation at rental rates below market rates. The implementation of the Program is a tool for overcoming these challenges and is a prerequisite not only for restoring the housing conditions of millions of Ukrainians, but also for ensuring social cohesion and will contribute to the achievement of: 1) The identified priorities and objectives of the State Strategy for Regional Development 2021-2027, approved by the Resolution of the Cabinet of Ministers of Ukraine dated 05.08.2020 No. 695 (as amended), namely: the priority of “creating security and socio-economic conditions for the return of Ukrainian citizens to regions and territorial communities”; task “Comfortable communities: implementation of updated standards of accessibility of residential buildings with safe, comfortable living conditions taking into account the needs of different groups of citizens, implementation of new approaches to providing people with housing taking into account best practices and experience of EU member states; direction “Investment instruments of regional policy” to promote the attraction of funds from international technical assistance and international financial organizations for the implementation of public investment projects for the restoration and development of territorial communities. 2) Tasks of the Plan of Ukraine, which was approved by the order of the Cabinet of Ministers of Ukraine dated March 18, 2024 No. 244-r, in order to implement the European Union initiative “Ukraine Facility”, introduced by Regulation (EU) of the European Parliament and of the Council (EU) dated February 29, 2024 No. 2024/792, namely: The document defines investments in housing, namely: “Reform 7. Ensuring access to housing for people in need: “In order to ensure the constitutional right of socially vulnerable groups of the population of Ukraine and other persons to receive social housing, the institutional capacity of the regulatory framework will be improved by amending the Law of Ukraine “On Social Housing” (or adopting a new version of this Law)”. 3) Tasks of the Priority Action Plan of the Government of Ukraine for 2025, approved by the Resolution of the Cabinet of Ministers of Ukraine dated February 18, 2025 No. 131-r, which, in particular, provides for ensuring support for the thermal modernization of buildings; fulfillment of European integration obligations in the field of energy efficiency. 4) Implementation of the Association Agreement between Ukraine, on the one hand, and the European Union, the European Atomic Energy Community and their Member States, on the other hand: revised Directive on the Energy Performance of Buildings (EU/2024/1275), revised Directive on Energy Efficiency (EU/2023/1791); Implementation of the Decree of the President of Ukraine No. 722/2019 “On the Sustainable Development Goals of Ukraine for the period up to 2030”, namely paragraph 11: ensuring openness, security, viability and environmental sustainability of cities and other settlements; as well as paragraph 7: ensuring access to affordable, reliable, sustainable modern energy sources for all, and paragraph 13: taking urgent measures to combat climate change and its consequences. Also, the creation of social housing is a component of the sectoral State Strategy for Housing Policy of Ukraine in the direction of “Implementation of the Right to Housing”, which is currently in the process of development.

Strategic Relevance of the Program

Sector
Housing
Subsector
Housing Reconstruction
Stream
Creation of a social rental housing fund
Strategic Document
State Strategy for Regional Development for 2021–2027
Task
Creation of a social rental housing fund

Program Objectives

Indicator
Baseline Value
Target Value

Economic Case

Program Components

Financial justification

Total estimated program cost

126'528'400'000 UAH

Estimated cost of program components

126'528'400'000 UAH

Component

Amount, uah

Institutional development and management

528'400'000

Capital investments in residential properties

126'000'000'000

Cost justification

Short description

Justification document

Untitled

Sources and mechanisms of financial support for the implementation of programs.

Status
Funding mechanisms
Coverage, %

Investment

Non-repayable financing. Grant financing from existing international support projects, international technical assistance programs, and grants. Direct expenditures.

25%

Reimbursable financing. Debt financing. Loans borrowed by the state from foreign governments, foreign financial institutions, and IFIs

25%

Non-repayable financing. Direct budget financing. Funded from the general fund of the state budget.

50%

Justification document
Financial justification of selected sources and mechanisms of financing the investment program "Creation of social housing".pdf
What potential funding sources can be mobilized on the basis of prior agreements or intentions to cooperate (if any)

The potential sources of financing for the program at the moment are: 1) attracting framework mixed financing in the amount of 400 million euros: a loan from the European Investment Bank (EIB), which will account for 50% of the amount, and an investment grant from the European Commission, which will also account for 50%. The EIB has confirmed its readiness to support the implementation of the project. 2) the program “Municipal Infrastructure for Sustainable Territorial Development (MISTO)” supported by the Agence Française de Développement with an estimated amount of funds for social housing projects in the amount of 80 million euros.

Management Case

Organizational Measures

The institutionalization stage (2032-2035) - involves the completion of the Program and the construction of 29,380 apartments.

48 months

The scaling stage (2029-2031) - provides for a significant expansion of the geography and scale of the Program's implementation and the construction of 14,000 apartments.

36 months

The piloting stage (2026-2028) involves the launch of the main mechanisms for implementing the Program and the construction of 6,620 apartments.

36 months

Risk Assessment

Risk

Probability

Degree

Strategy

Risk

Delays in adopting the necessary regulatory documents.

Probability

Medium

Degree

Critical

Strategy

Reduction

Risk

Low quality of construction and installation work.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Labor market instability in the construction sector (staff turnover)

Probability

High

Degree

Considerable

Strategy

Reduction

Risk

Decreased activity of international partners due to changing priorities

Probability

Low

Degree

Considerable

Strategy

Reduction

Risk

Delay in construction work.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Reduced availability of credit resources.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Discrepancy between actual costs and the approved project budget.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Insufficient co-financing from local budgets.

Probability

Medium

Degree

Critical

Strategy

Transfer

Risk

Low solvency of residents.

Probability

High

Degree

Considerable

Strategy

Acceptance

Risk

Low level of transparency in the management of residential facilities.

Probability

Medium

Degree

Critical

Strategy

Reduction

Risk

Delay in receipt of funds from international partners or the state budget

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Insufficient access to basic services (education, medicine, social services).

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Lack of professional staff at the regional and local levels.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Currency fluctuations when servicing a loan in foreign currency.

Probability

Medium

Degree

Critical

Strategy

Transfer

Risk

Insufficient availability/availability of construction materials in local or regional markets

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Problems with connection to engineering infrastructure.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Change of leadership at one of the levels of public administration involved in the implementation of investment projects.

Probability

Medium

Degree

Considerable

Strategy

Acceptance

Risk

Delay in approval of technical documentation or issuance of necessary permits.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Escalation of military actions affecting the security of project implementation in specific regions and communities

Probability

High

Degree

Critical

Strategy

Avoidance

Risk

Fluctuations in prices for construction work and materials due to speculative market behavior

Probability

High

Degree

Critical

Strategy

Reduction

Risk

Stigmatization of social housing residents in communities.

Probability

Low

Degree

Considerable

Strategy

Reduction

Risk

Change in tariff policy for electricity, heat supply, water supply, sewage, waste management.

Probability

High

Degree

Considerable

Strategy

Acceptance

Risk

Insufficient level of coordination of the Program implementation between different levels of public administration.

Probability

Medium

Degree

Critical

Strategy

Reduction

Risk

Disruptions in building materials supply chains.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Lack of contracting organizations with sufficient capacity.

Probability

Medium

Degree

Considerable

Strategy

Reduction

Risk

Declining market interest in private sector participation in the implementation of investment projects.

Probability

Medium

Degree

Considerable

Strategy

Reduction