---
title: "\"The Solution Lies Underfoot\": Developers Offer Cities a Mechanism Capable of Bringing Tens of Millions of Dollars to the Budget"
description: "At the Annual Housing Conference 2026, developers presented a calculation: developing a single former industrial zone of 10 ha can bring about $56 million in taxes to budgets and create 3,000 apartments. Developing spatial plans across Ukraine requires about $300 million."
date: 2026-11-11T07:04:15.508Z
lang: en
url: https://xab.info/en/posts/developers-offer-cities-investment-mechanism
tags: [housing, urban-planning, developers, ukraine, spatial-planning, investment, post-industrial, budget]
author: "Darya Fomina"
publisher: "XAB.info"
---

# "The Solution Lies Underfoot": Developers Offer Cities a Mechanism Capable of Bringing Tens of Millions of Dollars to the Budget

![Participants of the plenary session at the Annual Housing Conference 2026 discussing spatial planning in a hall with a presentation on screen.](https://xab.info/media/2026/11/11/devylopery-predlagayut-gorodam-mehanizm-privlecheniya-investitsiy/devylopery-predlagayut-gorodam-mehanizm-privlecheniya-investitsiy-1.webp)

## Key Points

- Developers propose financing urban planning documentation through private investments — a mechanism already enshrined in legislation
- Developing comprehensive spatial development plans across Ukraine requires about 300 million dollars
- Developing 10 ha of a former industrial zone requires 275 million dollars in investments and yields a budget effect of about 56 million dollars
- In Kyiv in 2015, about 1,700 ha of industrial territories suitable for transformation were estimated
- Communities face declining donor support, a shortage of specialists, and strict budget constraints

At the Annual Housing Conference 2026, during the plenary session «Spatial Planning and Integrated Territorial Recovery», representatives of parliament, local communities, the development business, and the World Bank Group discussed a key issue of Ukrainian housing construction: how to ensure its development under conditions of limited state funding, complex urban planning regulations, and large-scale recovery needs. The central thesis of the discussion was the assertion that the resource to solve these problems «lies underfoot» — in the form of unused post-industrial territories which, with proper organization, can become a source of hundreds of millions of dollars in investments and tax revenues.

### Three Systemic Problems and One Answer

Yevhen Favorov, Head of the Ukrainian Association of Developers, structured the problem into three blocks: a shortage of funds for developing urban planning documentation, limited effectiveness of existing regulatory mechanisms, and an acute need of local communities for private investments. According to him, all three problems have a single solution — partnership with the development business. «I have an answer to all these three problems. The only answer is development. I am sure that each of these problems can be solved through cooperation with business», — Favorov emphasized. He also pointed out recent legislative changes that have given developers a direct opportunity to finance the development of urban planning documentation, which was previously unavailable.

### 300 Million Dollars for Plans That Do Not Exist

The scale of the task facing local communities is illustrated by the estimate of Ivan Slobozhanyk, Executive Director of the «All-Ukrainian Association of Communities»: developing comprehensive spatial development plans across Ukraine may require about 300 million dollars. At the same time, communities face rigid budget expenditure constraints, a reduction in donor support, and a shortage of qualified specialists. Member of Parliament Anna Bondar, in turn, drew attention to the need for further development of urban planning legislation after the adoption of the law «On the Basic Principles of Housing Policy», in particular — mechanisms for land reservation, taking into account various housing formats in urban planning documentation, and resolving land issues for multi-apartment buildings. «We must look for ways out of the crisis we have fallen into», — she noted, emphasizing the urgency of developing and approving urban planning documentation.

### 1700 Hectares of Potential: What Lies Beneath Industrial Zones

Favorov associates the greatest potential for attracting investment with the revitalization of post-industrial territories — former factories, industrial zones, and large unused plots within city limits. As a benchmark, he cited data prepared during the development of the draft new General Plan of Kyiv in 2015: city authorities estimated the area of industrial territories in need of transformation at approximately 1,700 hectares. Although this document was never approved, the estimate demonstrates the scale of the capital's potential for implementing hundreds of complex development projects. By analogy, these data can be extrapolated to other major cities of Ukraine, where similar reserves of abandoned industrial territories are also significant.

### The Economics of One Hectare: Calculation on 10 Hectares

To assess the potential economic effect of developing post-industrial territories, the Ukrainian Association of Developers prepared a calculation based on the practical experience of member companies. As an example, a complex project on a former industrial site of 10 hectares was taken. According to preliminary estimates, about 3,000 apartments with a total area of 175,000 square meters, as well as another 100,000 square meters for business objects, social, and other infrastructure functions, can be built in such an area. Investments in such a project will amount to about 275 million dollars — which, according to Favorov, is essentially the averaged cost.

### 56 Million Dollars in the Budget: How the Multiplier Works

Out of the total investment amount, about 20.6 million dollars will go to external engineering networks, which the city will receive for free; 41.25 million dollars — for wages; taxes and social contributions will amount to about 18.6 million dollars. The total budget effect, including VAT, is estimated at approximately 56 million dollars. However, as Favorov emphasizes, these are only direct revenues. These funds will be used to purchase materials, equipment, transport, and other goods and services — these are orders for enterprises and work for people far beyond the construction site itself. «This is how the economic multiplier works», — noted the head of the Association, pointing out the additional indirect effect that significantly exceeds direct tax revenues. Thus, a development project on a single former industrial zone is capable of bringing an amount comparable to the annual funding of a whole range of infrastructure programs to the state and local budgets.

The discussion at the plenary session showed that the main barriers to realizing this potential are not economic, but regulatory in nature: the absence of approved general plans, unresolved land relations, and outdated mechanisms of interaction between communities and business. The legislative changes adopted in 2025–2026, allowing developers to finance urban planning documentation, became the first practical step, but according to conference participants, further amendments and, most importantly, political will at the level of local and central authorities are necessary for a systemic effect.

## Fact-Check & Sources

- [Города ищут деньги, власти – возможности строить жилье. Бизнес уверяет: решение лежит под ногами](https://www.rbc.ua/ukr/news/mista-shukayut-groshi-vlada-shukae-mozhlivosti-1794324546.html) - Primary source. All quotes, figures, and estimates are taken from the RBC-Ukraine text. The conference is confirmed visually (screenshot of the slide from plenary session 4).

## FAQ

### What is the «solution that lies underfoot» mentioned by developers?

This refers to unused post-industrial territories — former factories and industrial zones within city limits. Developers propose turning them into complex residential and business projects while financing the development of urban planning documentation at their own expense.

### How much does it cost to develop spatial plans for all Ukrainian communities?

According to the estimate of Ivan Slobozhanyk, Executive Director of the All-Ukrainian Association of Communities, developing comprehensive spatial development plans across Ukraine may require about 300 million dollars.

### What is the budget effect of a single 10-hectare development project?

According to the calculations of the Ukrainian Association of Developers, the total budget effect including VAT is about 56 million dollars, of which 20.6 million go to external engineering networks (received free by the city), 41.25 million to wages, and 18.6 million to taxes and social contributions. Investments in the project amount to 275 million dollars.

### What legislative changes allow developers to finance urban planning documentation?

According to Yevhen Favorov, a law has recently entered into force that gives developers the direct opportunity to finance the development of urban planning documentation. This creates a mechanism of partnership between communities and business in preparing territories for development.