UKRAINE: Land Use Deregulation in Kiev Commentary
UKRAINE: Land Use Deregulation in Kiev

Aleksandra (Sasha) Williams, Pitt Law '10, files from Kiev:

The last five years have dramatically changed the appearance of Kiev, the fabled "Cradle of the Slavs". Always admired for its green parks and gardens, its sensible city structure, and its historical sites preservation efforts, the city has now joined the ranks of randomly designed post-Soviet urban nightmares. In part this is because the real estate market structure emerged practically overnight, amidst the remnants of the centralized Soviet land use regulations, in a place lacking any civic organizations, administrative agencies, independent objective media, or, as one activist put it, "the necessary evil of multitude of lawyers who can tie up money interests in miles of red tape." Therefore, as soon as the old government system collapsed and the new money arrived, Kiev responded with a grotesque building boom.

Soviet land use and development laws were based on the premise that land was owned by the government. After the demise of the Soviet Union, Ukraine inherited a few outdated regulations dealing mainly with agricultural and non-agricultural use distinctions. Initially, growth and development were not at the top of the Ukrainian legislative priority list. For example, the "Law for Property Rights Classification, Recording and Registration" was not passed until 2004. Related legislature generally encouraged unrestricted development: there were no uniform city planning and construction codes until 2005 and real estate sale proceeds were not taxed as personal income until 2007. Even when the planning code was adopted in 2005, it was enacted as a "model code" only, and compliance was left up to the developers. Zoning regulations remained focused on the agricultural and non-agricultural use.

As a result, high-rise office buildings sprung up in low-slung quiet residential neighborhoods and park zones, and new residential buildings were constructed without any regard to the existing infrastructure. One of the examples of such chaos is the fate of a piece of land located near the downtown area. Initially the land belonged to the state, but was used by a hospital. Before the hospital was able to officially claim and register the land, the lot was given to the Orthodox Church by a politician, in fulfillment of his campaign promise to improve "morality and piety of the nation." Again, ownership was never recorded, but a church was built. It is unclear whether morality and piety were improved, but it is certain that the price of land in Kiev now exceeds $100,000.00 dollars per "sotka" (100 square meters). Therefore, the current administration plans to level the church and sell the land to a developer who proposed to use the site for an office building.

Public protests caused by similar situations encouraged the local and national government to at least take a look at the building boom. In 2006, the Kiev City Administration imposed an 18 month freeze on new development sites and a temporary moratorium on high rise construction. At the same time Ministry of Construction, Architecture and Housing Economy relaxed its remodeling requirements to encourage reconstruction of already existing buildings. However, in practice, even these regulations are frequently skirted or disregarded. A well-connected developer can usually make a "mutually beneficial" deal with the administration, and, if there is no significant public opposition, the development goes forward. Therefore, until some substantial and enforceable law is implemented, Kiev might as well borrow West Virginia's "Open for Business" sign.

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