An extraordinary effort on behalf of IOM Ukraine (Konrad Klos, Olena Lukaniuk, Anna Szeleznova), EIB (Gerry Muscat, Grzegorz Gajda), IIBW (Wolfgang Amann) and RMIT (Julie Lawson) to bring together policy-makers, academics, IFIs, local governments and housing agencies to sit, discuss and design the outline of affordable rental housing system in Ukraine. The event was also supported by the Vienna Municipality, Ministry of Climate Action of Austria and KfW.

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It consisted of a deep dive into the housing landscape of Vienna and Austria:

• A presentation by Wolfgang Amman (IIBW) and Christian Zenz (Federal ministry for Labour and the Economy) about the essential role of state regulation and constant adaptation of the Law on LPHA (low-profit housing associations)(WGG - Wohnungsgemeinnützigkeitsgesetz). It has been stressed that the state must be aware, capable and strong to defend the common interest in delivering housing as a good to citizens via legal regulation and creatively stand up against developers who want to cash out and get away with publicly subsidised assets. The system is built on the pillars of supervision board of LPHAs, compulsory independent audit by GBV and oversight by the Ministry to assure full compliance and prevent corruption or speculation. It has had only one major scandal since the 1940s, which is absolutely unique in the construction sector.

• Participants learned about Wohnfonds Wien – land banking public company that is essential in securing access to affordable land for public and social housing in Vienna. Even as land prices skyrocketed, it has been able to mobilise much-needed land resources under the inclusive land zoning provisions by the city of Vienna since 2018 – they buy 2/3 of newly zoned private land for fixed EUR188/m2 and prepare it for developer competitions for affordable housing, in a transparent way with the involvement of experts, the public and the council in decision making.

• Gerlinde Guthheil from GBV (Verband Gemeinnütziger Bauvereinigungen) – a national federation of LPHAs –  told us that the effects of the LPHA sector (22% of all housing stock) towards a productive economy are immense: first, it allows low to middle-income people to save up to a Billion(!) EUR per year in rents that are 20-25% lower than in the market. It makes market rental prices lower (a dampening effect), thus contributing to broader housing availability. The low-profit sector also invests in the times when the market stops (i.e. in times of crisis) and keeps the construction sector going, and acting as a counter-cyclical economic safeguard.

• GESIBA (headed by Klaus Baringer) is a private LPHA company 100% owned by the municipality of Vienna that is delivering the most affordable public housing in line with the best possible standards with social facilities and common spaces times better than the private sector. How is this possible? As LPHAs are incredibly capable of managing bodies and are highly motivated both by their social mission and the need to cut costs to deliver small, but important profits, they function even better than the usual public housing corporations.
  

Participants also looked in multi-level governance of the delivery of housing:

• France (presented by Olga Koukoui from AFD) has a nationally designed system in which Casse de Depots (National savings bank, to which almost all French citizens put short-term deposits) provides loans to dedicated municipal housing agencies on very favourable terms, essentially turning pocket money into affordable housing projects with a wide range of rents and forms of tenure catering from the poorest to middle class customers. It is embedded in the political economy of the French state and has been incredibly robust in defending against any privatization. Currently, with other IFIs involvement, such system allows to fund massive refurbishments and district renewal of older properties across the country to meet the decarbonization agenda of EU.

• Finland (presented by Raija Hynynen from the Ministry of the Environment and Jarmo Linden from ARA) has maintained a system of nationally supported loans since 1949 to rebuild cities bombed during WW2 and to support homeowners. It has since laid off the support to homeowners in favour of delivering targeted rental housing in ‘growth areas’ where there is infrastructure, job opportunities and rising market pressure. By meticulous work with non-profit municipal housing companies on spatial and land-use planning, it manages to fund much-needed housing in accordance with the principles of social mixing and mixed tenure, providing housing options to students, families, and professionals. Astonishingly, under the Housing First policy, Finland has almost totally eradicated homelessness, which would never happen without state assistance.

• Ireland (Housing Agency, as presented by Michelle Norris) has the youngest but very dynamic system of housing finance, which has been mostly redesigned based on the learning after the GFC, which was caused by and led to a complete breakdown of Ireland’s speculative housing sector. Strict mortgage regulations pushed an increase in public funding of municipal housing. However, income-based rents, the opportunity to buy out social housing and complex rental management have been a challenge to the system and need to be addressed in the future to increase the financial sustainability of housing companies and establish broader access to rental housing. Still, without the national intermediary, even the current system would not be present, and it is because of Housing Ireland’s numerous efforts and adaptive approach that the rental housing is growing in Ireland.

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Housing Europe (Dara Turnbull) has summarised the big picture and clearly shown that the role of a revolving public finance was key in recovering Europe after the WW2 and that each state has dedicated a lot of attention to mobilise and set up municipal and social housing entities, supported and regulated by public institutions to address the immense housing need. Without such institutions, financing instruments are just empty shells, devoid of real public purpose and long-lasting social effects, simply assisting in wealth accumulation for the landowners and financial institutions. Current drop in capital expenditure after the GFC has only worsened the housing unaffordability among the most vulnerable groups, and reliance on the rental assistance schemes without supply made prices increase dramatically, draining both the public and tenants' budgets.

This was supported by Jan Ruth and Krzysztof Gierulski from DG NEAR European Commission linking the discussions to the Ukraine Plan, which will launch the recovery in a European way with the structural reforms in the sector: ensuring good governance, transparency and social justice underpinned by several billions of earmarked investment into housing.

Reflecting on the existing financial intermediaries and their role in funding cost-rental sustainable local housing companies participants also discussed the role of UKRFINZHYTLO and State Youth Housing Fund in providing such finance to municipalities and what should be done to ensure that public money is not spent predominantly on the already better-off citizens with access to mortgages, but also to many of those who cannot afford it (no less than 500 000 IDPs according to AHAT research of IOM country survey data).

The Ministry of Restoration has agreed to work on this further and take on board many of the recommendations and suggestions from the workshop.

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We must not stop there and systematically develop local knowledge of best practices and approaches. Much has been lost in the 1990s and 2000s, and essentially architects, planners, municipalities and developers need to start learning from zero, and very fast.

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