Housing for the Common Good: Sustainable Governance from European Best Practice for Recovery in Ukraine

Overview of the Initiative

The report “Housing for the Common Good: Sustainable Governance from European Best Practice for Recovery in Ukraine” is a public‑sector publication produced by the Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation and Technology (BMK) of Austria. It brings together the expertise of Wolfgang Amann, Oleksandr Anisimov, Julie Lawson, Alexis Mundt and Igor Tyshchenko, who represent academic, research and policy institutions from Austria, Ukraine, Australia and the EU. The document analyses how Austria’s limited‑profit housing associations (LPHAs) can inform the reconstruction of Ukraine’s housing sector after the war, aligning with the New European Bauhaus “Rebuild Ukraine” initiative.

Core Features of the Austrian LPHA Model

LPHAs are private‑law entities that operate under a limited‑profit principle: rents and sale prices must at least cover real costs, and surplus profits are reinvested in housing. They receive modest public subsidies (about 20 % of project costs) and benefit from tax exemptions, low‑interest loans and preferential land access. In 2022, LPHAs managed roughly 660 000 rental units, 300 000 owner‑occupied apartments and 40 000 municipal units—about 24 % of Austria’s total housing stock. Their construction rate is stable at 15 000‑20 000 units per year, with average construction costs kept low through cost‑rent pricing and strict audit mechanisms.

Ukraine’s Pre‑War Housing Challenges

Before 2022, Ukraine’s housing stock comprised roughly 18 million residential units, over 85 % built before 1990, with poor energy performance (average heating demand 264 kWh/m² vs 90 kWh/m² EU average). Ownership is highly fragmented: > 90 % of apartments are privately owned, while joint‑ownership structures are weak, leading to limited renovation activity. The 2006 Social Housing Law provides only a small number of social units (≈ 1 100 pre‑war), and rent regulation is virtually absent.

War‑Induced Damage and Displacement

The Russian invasion damaged or destroyed 1.4 million housing units, especially in Donetsk, Kharkiv, Luhansk, Kyiv and Mykolaiv regions. Approximately 5.1 million people are internally displaced; 60 % of them rent in the private sector, often spending a third to a half of household income on rent. The estimated reconstruction cost for housing reaches € 63 billion, with € 29.2 billion needed for immediate needs.

Legal Gaps for a Common‑Good Housing Sector in Ukraine

Ukraine lacks a legal entity comparable to the Austrian LPHA. Current legislation distinguishes strictly between profit‑making companies and non‑profit organisations, leaving no room for “limited‑profit” structures. Private‑law entities can engage in housing development but do not enjoy tax benefits, privileged land access or cost‑rent regulation. Homeowners’ associations (HOAs) manage buildings but cannot own property or operate as landlords. Housing cooperatives exist but face outdated statutes, ambiguous profit treatment and limited access to public land.

Proposed Common‑Good Housing (CGH) Framework

The report outlines a model law with 18 articles covering: (1) legal form and minimum capital, (2) supervisory board requirements, (3) incompatibility rules (no political party or construction‑industry control), (4) cost‑rent pricing, (5) limited profit distribution (≤ 3.5 % of capital), (6) audit and supervision by specialised auditing associations, and (7) tax exemption for income‑generating activities. CGHEs would be required to reinvest surpluses, maintain transparent accounting and undergo annual audits. The law also provides for privileged access to state housing subsidies and land leases.

Institutional and Financial Recommendations

The authors suggest that municipalities become shareholders of CGHEs, creating municipal enterprises to lease public land on cost‑rent terms. They recommend harmonising Ukrainian company law to allow limited‑profit status, simplifying land‑lease procedures (e.g., non‑competitive leases for affordable housing), and establishing dedicated audit bodies for the sector. Financially, they propose revolving funds sourced from affordable rents, low‑interest public loans and EU‑backed grants (such as the Ukraine Facility) to bridge the financing gap.

Pilot Projects and European Support

Pilot projects are envisioned using the “GESIBA model” – a large LPHA wholly owned by the City of Vienna – to demonstrate cost‑rent rentals of less than € 3 /m², translating to roughly € 240 per month for a 60 m² apartment. European institutions (EIB, IOM, NEB) have already organised workshops in Vienna, Lviv and Brussels to share best practices and explore funding mechanisms. The report emphasizes that scaling the CGH sector will require coordinated legal reform, capacity building at municipal levels and sustained EU financial backing.

Expected Impact on Sustainable Housing

If implemented, the CGH model could improve energy efficiency (Austria’s LPHAs achieve average heating demand of 29 kWh/m² in new buildings), lower rental costs, and increase social mix in Ukrainian cities. By tying profits to reinvestment and enforcing strict audit standards, the sector aims to deliver long‑term, climate‑neutral housing while supporting vulnerable groups such as IDPs. The approach aligns with EU climate goals and the New European Bauhaus vision of inclusive, beautiful, and sustainable living environments.