Ukraine adopts new housing law to replace Soviet-era system and make housing affordable

In January 2026 a new housing law was adopted in the second reading in Ukraine’s parliament. This marks the beginning of a major housing reform, something that has not happened for over 30 years in the country.

The new Bill No. 12377, “On the Basic Principles of Housing Policy,” replaces the 1983 Soviet-era Housing Code, includes the establishment of social housing, new financial mechanisms to support the construction and purchase of housing, digitalization of processes, as well as putting vulnerable people and their specific needs as a priority. It is now awaiting Presidential approval and signature to come into effect.

For decades, Ukraine’s housing policy followed a Soviet-style model in which the state-controlled housing supply and access was mainly decided through administrative allocation and long waiting lists for state or municipal apartments. Much of the stock was built quickly with standardized designs and limited quality, and maintenance often lagged behind, leaving many buildings aging and in need of major repairs. These long-standing problems are why updating the law is necessary to support affordable and decent housing in Ukraine today.

A shift toward social and affordable housing.

Under the new rules, people who need support can apply for social housing from the state or municipalities (and sometimes the private sector). Tenants will pay an affordable rent, based on their financial situation and any legal benefits, plus utilities. Some people may also qualify for a subsidy to help cover the rent. The rent that is collected is then reinvested into maintaining existing social housing and supporting the development of new units.

This follows models widely used in several EU countries. Austria is a well-known example: in Vienna, one of the world’s most livable cities, close to 60% of residents live in municipal or city-subsidized housing, backed by a large stock owned or supported by the city and limited-profit housing providers. This scale helps keep rents more stable across the market, supports access for mixed-income households and vulnerable people, and enables reinvestment in maintenance and new construction. If implemented well, Ukraine’s reform can deliver similar results over time.

Social and affordable housing operators.

Housing operators, another key institutional change the law brings, are meant to make the delivery and management of affordable and social housing programs more consistent in practice. Under the framework, social housing operators are expected to be non-profit organizations that manage social housing and provide it for rent. Affordable housing operators can be legal entities that build and manage affordable housing projects. Therefore, this should improve housing management and maintenance, while creating clearer accountability for how units are allocated and operated.

New financial instruments, such as mortgages, leasing, and rent-to-own.

These changes introduce a broad system of state-backed support to help eligible people build or buy housing, funded by state and local budgets, as well as international assistance and other legal sources. These different tools, like affordable long-term loans, partial payments/compensation, or rent-to-own and similar programs, will be expanded by future laws.

Digitalization and a unified housing system.

The government plans to develop Unified Information and Analytical Housing System and digitalize processes related to housing. This will increase the transparency and effectiveness of procedures, so everyone can quickly and transparently use state tools in order to rent, build, purchase and apply for housing.

Similar solutions are already common across the EU. Many countries use nationwide digital registers for buildings and addresses, and online portals where people can submit applications, track decisions, and verify property information.

Stronger focus on vulnerable groups.

The law is framed around targeted support for those who need it most, such as internally displaced people, elderly people, people with disabilities, and others whose needs are not addressed by the market. This matters because effective housing policy is not “the same support for everyone,” but support that matches vulnerability and ability to pay.

Rebalancing public housing stock and limiting erosion.

The law pushes back the privatization of state-owned units, and treats public housing stock as a long-term resource. It invalidates the previous Housing Code and the law “On Privatization of the State Housing Fund,” with the overall intention of preventing the public housing stock from being gradually eroded over time. The objective here is to treat public housing as a long-term resource for social support and affordable housing provision.

More opportunities for public-private partnerships.

The law encourages public-private partnerships in the housing sector. These partnerships can increase supply, management capacity, and investment, as long as rules, accountability, and safeguards are clear.

A possible concern is data protection, with the risk of leaked data related to the digitalization of processes and the establishment of a unified information system. Data protection should be seriously taken into consideration, and it should be clearly defined who can access what data, and for what purpose.

Another uncertainty comes from the limited stock of state- and municipality-owned housing, and ways to increase it. Expanding public housing to meet social and affordable housing goals requires sustained financing to construct, renovate, purchase, or rent the housing units.

In addition, there is the question of whether the public-private partnership model will actually work in the housing sector. If private-sector participation is expected to help scale supply, the state will need credible incentives and instruments (for example low interest rates on construction loans), in order to attract public-private partnership opportunities.

This law sets the overall framework, but its real impact will depend on secondary legislation and practical implementation. Without clear follow-up rules, funding, and strong enforcement, the reform risks staying on paper instead of changing how housing support works in reality.

This reform strongly reflects principles Habitat for Humanity has always supported in Ukraine. Habitat for Humanity in Ukraine team was proud to be part of this process as a member of the working group led by the Ministry of Development of Communities and Territories, alongside partners like UNECE, IOM, UNHCR, the European Commission, the European Investment Bank, the Council of Europe Office in Ukraine, and the World Bank. We and collegues in Ukraine will continue working closely with the Ministry and partners to ensure further implementation of the law for decent and affordable housing in Ukraine.