Passions around bill No. 5655 have not subsided for more than a month. The authors of the document declare deregulation, digitalization, transparency and cheaper construction. Opponents of the voted editorial note the destruction of control over developers and a return to the centralization of the industry. Similar discussions in almost the same composition from each of the parties, with the same main author of the idea and the project, already took place several years ago, when the payment in favor of the communities of equity participation by developers was canceled. Then the society was assured that the abolition of equity participation would lead to a decrease in the cost of construction and, accordingly, housing.

But something already went wrong.

Recall that until 2021, developers paid share contributions to the budgets of territorial communities for the development of infrastructure of settlements in the amount of 10% of the cost of housing development and 4% of the cost of industrial facilities.. These funds had a clear purpose and were spent on the construction and repair of the social infrastructure of the community (kindergartens, schools, engineering networks for water supply, drainage, heat supply, streets, etc.).. The budgets of territorial communities annually received about UAH 1.5 billion, which, according to budget legislation, could not be used for other purposes, for example, for salaries of officials, but were received exclusively for social purposes.

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Such a system in Ukraine fully complied with global practices, according to which developers are required to take part in the development of the infrastructure of settlements. In particular, in the USA, the developer's share fee (impact fee) has been introduced in 60% of all cities, and in some states, for example, in Florida, in 90% of settlements. In Australia, the volume of local infrastructure contributions is tied to the cost of construction (0.5–1%). Similarly, in Spain, Impuesto sobre Construcciones is tied to the cost of construction and is no more than 4%, depending on the specific locality..

In Canada, such a contribution is the sum of payments for individual elements of infrastructure. Moreover, for residential real estate, the contribution amount is fixed and depends on the type of housing, and for industrial buildings it is determined as a payment per square meter and does not depend on any additional parameters.. In developed cities in North America and Australia, the payment itself is made before obtaining a building permit from the municipality. In Ireland, a development contribution free developer pays in favor of not only the general infrastructure, but also the equipment necessary for the development of the city.

It should be noted that in all these countries, real estate tax is also provided at the same time..

In Ukraine, discussions continued for many years about the need to improve the system of share contributions based on the best world experience: link it to the cost of construction or the regulatory assessment of the Ministry of Regional Development; lower or raise rates; enter special accounts; establish a single rate for the whole country or regulate depending on the type of administrative-territorial unit, etc.. At the same time, experts and municipal specialists immediately rejected the examples of the countries of the post-Soviet camp, in particular Russia and Belarus, in which they do not charge such an additional fee from the developer as equity participation, but are limited to administrative fees for the preparation of documentation.

Contrary to world experience and the position of the expert community, on September 20, 2019, the Verkhovna Rada adopted the Law “On Amendments to Certain Legislative Acts of Ukraine on Stimulation of Investment Activities in Ukraine”, authored by Olena Shulyak, and abolished the obligation of developers to pay equity funds to the budgets of territorial communities.

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In the explanatory note, the author of the law noted that the payment by developers of equity participation increases the costs of administrative procedures related to construction, on average, up to 15.2%. Moreover, the document stated: " Consequently, after the cancellation of the share contribution, developers would have to reduce the prices of newly built housing, because their costs have decreased..

But statistics and, most importantly, the practice of consumers in the market indicate the opposite trend - the price index in the primary housing market in Ukraine from December 2020 to December 2021 increased by 21.5%.

For example, according to the LUNMisto website, the average price per square meter in new buildings in Ivano-Frankivsk and Zaporozhye regions increased from UAH 11,900 to UAH 14,100 (+18.5%) and from UAH 16,200 to UAH 18,900 (+16.7. And as of January 2023, in general, it is UAH 22,900 in Ivano-Frankivsk region and UAH 28,000 in Zaporozhye.

That is, after the cancellation of the share contribution, the cost of housing in the areas given as an example increased by 92.4 and 72.8%, respectively.. In general, during the quarantine year, Ukraine ranked fourth in the world in terms of the rate of increase in the value of real estate..

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Obviously, the improvement from the abolition of the payment of share contributions to the budgets of territorial communities came only for developers. For citizens, housing has become less affordable, and the budgets of territorial communities have lost funds to provide targeted residents with the necessary infrastructure facilities, social services.

There was also no improvement in the Doing Business rating, as promised by the author of the law. In 2021, the Board of Executive Directors of the World Bank Group decided to stop publishing the Doing Business rating. In June 2020, the World Bank admitted that incorrect data was used in Doing Business 2018 and 2020, after which the bank suspended the release of the next rating and initiated a series of audits of indicators and methodology.

Rhetorical question: where is the $600 million promised from the cancellation of share contributions. investment in the construction industry and municipal infrastructure?

Thus, after the abolition of the share contribution, the prices for newly built housing for citizens did not decrease, the indicators of the ease of doing business Doing Business for Ukraine actually did not change, the promoted crazy investments in communities did not come. On the other hand, the opportunities for corruption abuses among developers have increased, and the tools of influence from the municipal government have disappeared.. At the same time, the balance of the budgets of the communities was disturbed in the direction of reducing the level of financing of projects for the development of social infrastructure, especially in areas of multi-storey new buildings. The load on engineering networks has increased significantly, which leads to their rapid wear and forced frequent repairs..

By the way, experts warned about this even during the consideration of the already mentioned bill.. It's a shame they didn't hear back then..

Today, the next initiative of People's Deputy Elena Shulyak is on the agenda - the " The expert environment, municipal specialists again provide a list of warnings and oppose the voted version. And Ukrainian society does not want to step on a rake - literally in a matter of hours, the required number of votes was gained by a petition to the President of Ukraine to veto draft law No. 5655.

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