Housing Affordability Issues in Ukraine

Abstract

The article is dedicated to the analysis of population’s housing provision in Ukraine and its certain regions considering the methodological features of assessing housing affordability indicators, as well as the losses in the housing stock as a result of military invasion. The purpose of the paper is the methodological determination of housing affordability indicator, assessment of its pre-war trend in Ukraine; and determination of an acceptable for modern conditions institutional mechanism for improving housing affordability based on the principle of rent. The novelty of the research is the substantiation of use of permanent housing lease mechanism. These schemes can be implemented at the state and regional levels with the direct participation of investors and local self-government bodies within the framework of public-private partnerships. In the paper the pros and cons of the current mechanisms of housing construction and obtaining are identified; prospective directions and possible financial mechanisms for state housing policy implementation in the current condition of construction industry and population welfare are shown. Research methods are the following: correlational, analog, time series for the analysis of regional differentiation of housing affordability in Ukraine. Housing affordability has become much more complicated due to the need to restore damaged and destroyed dwellings. In view of current situation, prospective dynamics of living area commissioning indicator aimed at bringing the level of housing provision of Ukrainian citizens closer to the indicators of European countries was determined. In the absence of official housing purchase estimates at the national level, the ratio of median cost per square meter of living area to the median wage was used as the housing affordability ratio. The housing affordability ratio for the regions of Ukraine was calculated. According to the generally accepted classification of housing markets by affordability criterion, the purchase of housing in the country is significantly complicated. The correlation between the housing affordability indicator and the living area commissioning indicator was calculated, which was negative and indicated that the regional programs for providing the population with housing are critically unsatisfactory. The positive and negative features of the financial instruments for ensuring the housing affordability for the population and their compliance with the strategic goals of the housing policy development were determined. The financial and organizational mechanism of lease as a target vector for providing the population with housing was proposed.