The exorbitant cost of renting housing for IDPs in Ukraine. The expert told how this can be prevented
Because of the Russian invasion, some four million Ukrainians who have been internally displaced are still unable to return home.
They predominantly rent accommodation at their own expense. In March this year, most lost their right to cash assistance, causing 130,000 people who could no longer pay rent to return to dangerous regions.
The situation with IDPs has exacerbated the problems of the rental housing market, which were present before the war, says the Spilka Orendariv Zhytla (Union of housing tenants). This initiative aims to defend the rights of tenants, promote conditions for equal and fair relations between them and landlords, and advocate for the adoption of fair public policies in this area.
Socportal asked Vita Schneider, an activist of Spilka and researcher of the expert team “Nova Zhytlovaya Polityka" (New housing policy), to tell us what is happening to the rental housing and whether it is possible to improve the situation. Vita is also the author of a documentary film on this topic, "Bezpeka v orentu" (Security for rent), which describes the main issues of the sphere.
How long has rental housing been the focus of your attention? Was it interested in it after the full-scale Russian invasion?
I started to focus on rental housing after the full-scale invasion. However, the issue of rental housing was not given enough attention even after 2014, when the first migrants appeared. It was thought that there were some shelters for them, but people were predominantly renting. After the full-scale invasion, most displaced people also live in rented accommodation.
It is believed that if a person has moved out of a shelter, they are fine. So they are bypassed by the state, international organisations working with displaced people and city authorities.
But it is not known what happens to these people next. They can find a flat and move out of the shelter because it is hard to live there. However, they will raise the rent price in private housing, not find work, and it is not excluded that they will return home under shelling.
How much has the rent price increased since the big war outbreak?
According to Gosstat data for 2023, rent prices rose by 15.9 per cent, while official inflation was 5.1 per cent. That is, the growth of rental prices is three times higher than the growth of inflation. We cited these data in the film because landlords have the following arguments: “Prices have risen, everything has gone up in price, we need to raise the cost of rent.” But landlords have increased rent more than prices have risen.
In the film, we also wanted to challenge another popular belief that prices rise in response to increased demand. It is true that demand is increasing, but not all people have gone to the western regions, where prices have risen the most. Many ended up in Kyiv, in Odesa or in the central regions. But there, prices either did not rise much or fell during the first years of the war.
What are the most common lease agreements? What legal effect do they have?
Tenants usually sign standard contracts provided by real estate agents. According to the Civil Code, rental agreements are legally enforceable if they set out the basic lease terms (cost, length of stay, and so on) and if both parties sign them: the tenant and the landlord. However, people often express the opinion that these agreements have no force because they are not notarized. Tenants have this impression: “Why should we sign them at all if they have no force?” Or: “We liked the landlord: he is a good person, as it seemed. So we didn't sign anything.
In fact, these contracts are enforceable. Lease agreements do not have to be notarised (the only exception is when it is a lease with buyout).
You can go to court with this agreement, as stipulated in the Civil Code. It is important to sign an agreement to protect your rights, even if the landlord is someone you trusted and has treated you well.
According to your film, the only mechanism for controlling the rental housing market remains an appeal to ethics and morality.
Mechanisms that do not exist in national legislation cannot be introduced locally. Therefore, the most popular way for local authorities to respond to injustice by landlords has become an appeal to morality. The mayor of Lviv, Andriy Sadovyy, suggested at the beginning of the invasion that a register of unscrupulous landlords be created and forced to give away their housing for free. That didn't work, although there were many comments under his post.
But the city could enforce the rules that already exist - those already spelled out in the Civil Code.
For example, if you can't evict a person without three months' notice, you can't raise the rent unless these things are stipulated in the contract.
One of the tenants told me about her situation. The girl had been renting a small flat in Lviv for 6000 hryvnias for 5 years, and at the beginning of the invasion, the owner of the flat decided to raise the rent to $500. Of course, the tenant did not agree and decided to move out after a month, to which the owner reacted aggressively, broke into the flat the next day and told her to move out. The tenant called the police. However, the police did nothing to prevent the eviction other than suggesting they “spread the situation media-wise.” The police can at least make a report evicting illegally because these things are spelt out in the Constitution and the Civil Code. You can't evict a person like that without warning. Also, you can't raise the price without re-signing the contract. The city could teach the police how to react in such situations and set up counselling institutions to help tenants treated unfairly. Also, the city could monitor the payment of taxes because most of the sector is in the shadows. These taxes could go into the city's budget, and a military levy is also built-in.
Realtors' standard contracts, which you say, are pretty common and enforceable to protect tenants' rights. The problem is that people don't believe they are enforceable. However, are these agreements still concluded to circumvent taxes?
Taxes are underpaid because the landlord does not register the lease agreement with the tax authorities. The landlord must formalize an FLP or pay income tax by attaching this agreement. This practice exists, but mainly for flats in the expensive sector. There, contracts are concluded, taxes are paid, and the housing is properly maintained. The rental market is largely illegal, and it is primarily an issue for low-income people and vulnerable groups, but also middle-income people.
Your film gives examples of unfair treatment of certain categories of tenants. For example, a military family that was unjustifiably raised their rent.
There are three districts in Lviv where military men live because of the specifics of their work. The heroine of our film told us that her husband works on just such tasks, and it takes him 40 minutes to get to the base. So they cannot live in any other neighbourhood in the city. According to her, landlords know about it and deliberately raise prices. But, as in the heroine's situation in the film, military men in the rear do not earn much money. Therefore, the woman was forced to go to work, although she planned to be with her child on maternity leave.
Other examples of biased attitudes are that there are “good” and “bad” IDPs. People from Donetsk and Luhansk oblasts are more biased than those from Zaporizhzhya or Kherson oblasts.
The language you speak matters. Most of my respondents are trying to switch to Ukrainian; for many, it is important. However, they may have children or elderly parents, for whom it is more difficult. For example, I had a respondent with an adult daughter with autism, for whom it is not so easy to change.
It's also difficult for people with disabilities to rent a flat, even though it's the most necessary for them. It is very difficult for them to live in shelters, to wash, to go to the restroom. If a child with autism, it is difficult for him to be among many strangers. However, finding a flat for people from vulnerable categories is difficult. I spoke to a blind person who was refused a tenancy with the motivation: “You will burn the flat down for us.” However, this is an adult person who is orientated in space and lives on his own.
It is also problematic to find accommodation with an animal. But if people have a small child, it can be even more difficult.
And these are unreasonable things to do. The landlord should understand that he gives the flat for full use to another person and gets profit from it, so, firstly, he should invest in the depreciation of the flat, and secondly, he should put in the contract mechanisms for compensation of damages.
Are there mechanisms to compensate for housing costs for the most vulnerable groups?
Until March this year, there were payments for IDPs: 2 2,000 hryvnias per adult and 3 per child or person with a disability. I know from interviews that most people use these funds to pay rent. Now, the Ministry of Social Policy is considering a way to compensate IDPs with low incomes for the rent. I am critical of such a program.
If you throw money into a sector where there are no requirements for the condition of housing or restrictions on payment per square metre, where taxes are not paid, where there is no protection against evictions, then prices will rise.
The situation will be similar to that of military personnel, whose high salaries are stereotyped, directly affecting their families' rent.
The Law of Ukraine, “On Basic Principles of Housing Policy," is being drafted, which should abolish the Housing Code of the Ukrainian SSR. However, there are no requirements for the condition of rental housing or restrictions on its cost. The regulation on places of temporary residence for IDPs has minimum requirements for the quality of premises but not for rented housing. And this needs to be implemented because we will not be able to build housing for all those who have lost it. The proportion of renters will only increase. At the same time, the results of the "єOsela" or "єVidnovleniya" currently are limited. A significant source of compensation for them is the unknown when reparations from the Russian Federation will come. The state should develop other mechanisms to provide housing: regulate rent, encourage cooperative construction, and create social housing.
Mass movements demanding adequate rents occurred in Western Europe in the early twentieth century. Can we draw an analogy with our conditions?
Europe was also in a post-war situation at that time. At the end of the First World War, when many veterans returned, people found themselves in terrible conditions: destroyed homes, unemployment, and deaths of the main breadwinners of the family. A massive grassroots movement for adequate housing was formed, which provoked current policies. In Austria, this movement led to social democratic policies and the creation of a social housing fund. As a result, Vienna shows one of the most telling success stories of social housing, built from the 1920s to the 1970s with a wealth tax. So Vienna has a large social housing fund that works not only for the vulnerable but also for people on middle incomes and below - its development began in the 1980s because of a complex programme of subsidies, tax rebates, and development competitions with the provision of cheap land for building. Importantly, a large social housing stock is "dumping" prices on the market. That is, since in Vienna one-fourth of the housing stock is social housing, the prices are relatively adequate compared to other cities. For example, in Berlin, many social housing projects have been privatised.
But in Ukraine, where a new law on social housing is currently being discussed, it is important that this issue is considered in relation to rental housing. Firstly, because rent regulation and standardization of contracts is also necessary for the functioning of social housing. And secondly, because to build social housing is a lot of money and a lot of time.
Given that most of the resettled people are now living in rented housing, it is necessary to pay attention to it first.
Going back to the example of Vienna, there the city can introduce very specific regulations that meet the challenges of this particular region. In Ukraine, there is no such thing. In Ukraine, representatives of city administrations disassociate themselves from the private sector, saying that their competence extends only to the communal sector. On the other hand, they say: "If some regulation will be introduced at the state level, then we will think how to implement it". And they are in this right, because in Ukraine communities cannot introduce new regulations if they have not been laid down at the state level.
From the experience of communicating with Ukrainians in the EU, I got the impression that people were rather frightened by the lease rules there. Was this felt in your interviews?
Of course, many people in our country want to have their own housing in private ownership. In Ukraine, this is the only form that guarantees stable and cheap housing adapted to individual needs. Housing from which you will not be evicted. In Ukraine, safe housing is really housing in private ownership, because we have no other mechanisms to ensure the housing rights of citizens. From rented housing, you can be evicted at any time or raise the price. It's often short-term. There's no one to support you if you're treated unfairly, there's limited jurisprudence, people don't go to the courts, they don't have the resources, and they don't know how to do it. They have the perception that the lease agreement is invalid.
Indeed, in Ukraine, private rental housing is a very unsavoury option for living.
And in Europe, tenancy agreements are usually lengthy. (A number of Ukrainian EU refugees also face the risk of being evicted from the housing provided. For example, in Germany, Hungary, Ireland. However, it is more often about temporary housing or other forms of arrangements, such as "Precarium" in Poland, rather than rent — ed.) It is difficult to evict you, you can bring your own furniture, make your own repairs. You can live there with your children and start a family. Thus, rental housing in Europe is more attractive than in Ukraine, because it guarantees greater security. In our country people are skeptical that it will work, but we need to start thinking about how to solve the problems of the private rental sector, because the situation will get worse.