Igor Terekhov, head of the Association of Frontline Cities and Communities, has proposed a national affordable housing system combining state, municipal, bank, and private investment.
Speaking at a meeting of the board of the Association of Frontline Cities and Communities, Terekhov outlined proposals that include housing associations, long-term mortgages, and social rental development.
The meeting focused on restoring Ukrainian housing and securing accommodation for frontline residents, internally displaced persons, military veterans, and critical infrastructure workers. Direct housing damage reached 61.1 billion dollars by the end of 2025, with about 14 percent of Ukraine's housing damaged or destroyed and total reconstruction costs estimated near 90 billion dollars, according to figures presented by Terekhov.
Terekhov serves as mayor of Kharkiv, Ukraine's second-largest city, which has suffered severe structural damage from near-constant missile and drone strikes. The Association of Frontline Cities and Communities represents municipalities near combat zones that face urgent housing deficits for millions of displaced citizens.
Austrian model and non-profit housing
Under the proposal, Ukraine would establish housing associations modeled on the Austrian housing system. These organizations would bring together local communities, state institutions, charitable foundations, trade unions, businesses, and private investors.
Terekhov said all profits generated by these associations would be reinvested directly into constructing new residential buildings and maintaining existing properties. Specialized organizations would work alongside government bodies, municipalities, banks, and private investors to build and manage affordable housing stock across the country.
Long-term mortgages and state guarantees
To expand home ownership, Terekhov proposed a long-term mortgage structure where commercial banks assemble loan portfolios. A specialized financial institution would then raise funding for these loans by issuing state-backed securities.
The specialized institution would not lend directly to individuals, Terekhov explained, but would supply banks with dedicated mortgage resources. He said this framework would lower borrowing costs and enable wide-scale mortgage lending without relying on constant state budget funding.
Social rental housing and tax relief
For citizens unable to qualify for mortgages due to age, health, or income level, Terekhov called for expanding social and affordable rental housing. State and municipal authorities must create a full-fledged social housing sector focused on constructing modern, long-term residential units rather than merely repairing old municipal buildings, he said.
The proposal includes a statutory requirement directing 10 percent of revenue from municipal land sales in frontline areas to social housing construction. Terekhov also advocated eliminating value-added tax on the initial sale of housing by legal entities to lower final purchase prices for buyers.
Terekhov concluded that Ukraine must establish a lasting institution that operates independently of political changes, annual budget votes, or future government decisions, turning national housing policy into a permanent structure rather than a temporary program.
