The process of obtaining urban planning conditions and restrictions (MУO) has emerged as a significant administrative hurdle for residential construction in Ukraine. Industry experts argue that a clear mechanism for appealing unjust refusals or inaction by local authorities is essential for the sector’s growth.
According to recent research, the MУO process is identified as one of the most problematic stages in launching housing projects. These conditions serve as a foundational document outlining essential parameters for future constructions, including allowable height, density, setbacks from property lines, landscaping requirements, and other planning limitations. Essentially, MУO dictates what can be developed on a specific plot of land.
The Ukrainian Association of Developers (UAD) highlights that the MУO acquisition process is currently the least efficient, making it the most significant administrative barrier to development. Among various factors hindering project implementation, difficulties in obtaining MУO ranked highest according to survey respondents.
Furthermore, the MУO process is considered one of the top three procedures needing optimization at the local level. Evgeny Favorov, head of the UAD, notes, “MУO remains one of the most sensitive stages in construction. Formally, it should be a clear document—a digital extract from the master plan detailing the parameters of the future object.” However, developers often encounter manual management practices during this phase, leading to delays, arbitrary refusals, and inconsistent interpretations of regulations.
Favorov emphasizes the critical need for a transparent appeals mechanism, stating, “For the market, it is vital to have a clear mechanism for appealing unjust refusals or delays in the process.” This sentiment is echoed by findings from the National Agency for Corruption Prevention (NACP), which has flagged the current MУO acquisition process as a breeding ground for corruption and illegal construction.
The NACP’s draft Anti-Corruption Strategy for 2026-2030 points out that the existing procedures create opportunities for corrupt practices and calls for a systematic review of legislative approaches to issuing MУO. The agency’s report indicates that while MУO should reflect local planning documentation for specific land plots, they are often issued by local officials in a manual manner, allowing for procedural delays and manipulations.
Trust in local decision-making processes is notably low, as indicated by survey results showing a higher confidence level in state authorities compared to local ones—5.0 versus 3.0 on a scale of 10. The reform of the State Architectural and Construction Inspectorate (DABI) into the State Inspectorate for Architectural and Construction Control (DIAM) received a relatively high rating of 7.04 out of 10, suggesting some optimism about the reforms.
Favorov asserts that DIAM has proven effective as a reformed oversight body. He stresses the importance of having a clear and independent appeals mechanism to address unjust refusals or delays at the local level, ensuring fair operational standards in the industry. He clarifies that there are no plans to strip local authorities of their powers in urban planning; rather, local governments should maintain their roles in shaping urban policy and approving documentation.
However, when authorized bodies unjustifiably refuse to issue MУO or fail to make timely decisions, businesses need protective measures for their legitimate projects. Favorov reiterates, “The industry demands the creation of an appeals mechanism for unjust refusals. There is no question of taking powers away from communities; rather, there should be safeguards against inaction or abuse. If a project complies with legislation and planning documentation, it should not be stalled for months. An independent and clear appeals mechanism is necessary for such cases.”
Digitalization is viewed as a strategic solution for the sector. The NACP has recommended automating management decisions and transforming the analog MУO issuance process into a digital one as a key tool for minimizing corruption risks. Given that the development market places greater trust in digital solutions and reformed state oversight, an appeals mechanism through DIAM could serve as an interim solution until full automation is achieved.
The ultimate goal is to eliminate any possibilities for corruption, manipulation, and procedural delays. The UAD believes that reducing corruption risks in the MУO process, establishing a transparent appeals mechanism, and further digitizing procedures will facilitate the launch of new housing projects, thereby increasing the availability of housing for those in need, including military personnel, internally displaced persons (IDPs), and other beneficiaries entitled to housing benefits.
The process of obtaining urban planning conditions in Ukraine presents significant challenges for residential construction. Industry experts emphasize the need for a transparent appeals mechanism to address unjust refusals by local authorities, aiming to streamline the development process and reduce corruption risks.