Labor shortages, high construction costs, and the slow implementation of reforms and permitting procedures are the main challenges facing developers and architects in Ukraine during the war, according to representatives of the construction industry who spoke at the roundtable discussion “Building the Future: Development in Wartime.”
“There is a very severe shortage of construction workers. We all felt this problem this past spring. As a company owner, I am looking for people to finish building our projects,” said Oleksiy Baranov, founder and CEO of A Development, at the roundtable hosted by the Interfax-Ukraine news agency.
In addition to purely construction-related specialties, there is also a shortage of architects on the market, said Yulia Polyukhovich, chief architect of the A Development project.
“There are many other challenges during the war. For example, there is a very severe shortage of personnel—there are very few architects right now. This is a very serious challenge, because whereas previously three or four architects would work on a project, now there may be only one,” she explained.
At the same time, architects must quickly adapt projects to reflect changes in building codes and standards, particularly regarding safety, the expert noted.
As Vitaliy Borul, CEO of CREDO Development, noted, the construction of underground shelters with emergency exits is a significant expense for developers, and therefore the government should compensate for the cost of building them.
“It looks cool, it’s safe, but it’s very expensive. I believe the government should compensate for the cost of underground shelters. The government is responsible for people’s safety, so we need to reach some kind of agreement with the government, and it should cover these costs,” the expert said.
Developers have also seen a significant increase in construction costs. Furthermore, the market reacts to every enemy attack on the city—after “strikes,” housing sales drop. Insurance against construction risks is also very expensive, Baranov noted.
“Before the war, the calculation was simple: the cost of materials (concrete or brickwork) was equal to the cost of labor. Today, the cost of labor exceeds the cost of materials by 2–3 times,” said the founder of A Development.
According to Baranov, significant obstacles are also created by unresolved procedures regarding the adoption of subordinate legislation by the government and ministries, particularly in the area of cultural heritage protection. At the same time, Kyiv’s local authorities have not considered land allocation requests for 1.5 years.
“For example, amendments were made to the law on cultural heritage, but the Ministry of Culture has not yet approved the relevant regulations. In May 2022, amendments came into effect under which it is impossible to carry out any work in the central historic area without designated zones and regulations. Yet the procedure was only approved in May of this year—meaning four years have passed. And yet, for example, there is still no procedure regarding heritage sites,” he noted.
Baranov emphasized that construction in Kyiv’s historic center must be well-thought-out and transparent, but at the same time controlled by the city.
“Kyiv must set an example. Construction is very expensive, and you can’t just erase a building with an eraser. We need to adopt an approach that ensures everything happens transparently and quickly, while still building structures that will remain relevant for years to come,” the expert said.
