2025 General Plan for Kyiv: the Capital City or the Mega-Village

An article “2025 General Plan for Kyiv: the Capital City or the Mega-Village” was published in ‘DzerkaloTyzhnya. Ukraina’, issue 45.

No real steps for returning the ‘shadow’ billions to the city budget were taken. Instead, the same old story about the ‘predecessors’ goes on. The return of the 100% the personal income tax to the city budget and the active promotion of the sadly-knownChernovetsky’s General Plan-2025 formed the story’s plot. Whileimproving the land relations and creating the transparent, consistent and coherent planning documentation forobvious rules for investors are being neglected, MayorKlytschko’s team calls for the implementation of the mentioned General Plan to improve the life of Kyivans and open the new horizons for the capital city. The NGO experts, however, are of the opposite opinion. The 2025 General Plan resembles the ‘Titanic’, which hoststhe current mayor’s team.

LeonidChernovetskiy’s General Plan

VitaliyKlytschko had spent many years living abroad. He should know that politicians do not promise the things they are not going to do. Otherwise,they do not get re-elected. Yet, having promised the reforms in Kyiv to be based on the international experience, the city head focuses on the Ukrainian corrupt practices. Chernovetsky’s General Plan-2025 was the test for the political (ir)responsibility of the current mayor and his UDAR-party team. While being in the opposition and running formayor’s officeVitaliyKlytschkowas a strong opponent of the mentioned General Plan. Why did he radically change his position?

The General Plan-2025 was lobbiedto match the hastily developed (in fact, at the expense of RinatAkhmetov’s"Foundation for Effective Governance") Kyiv Development Strategy 2025, approved on December 15, 2011. Back then the first draft of the General Plan-2025 was not approved due to major criticism during the public discussions initiated by the city authorities.

Moreover, while General Plan 2020 was still in place, the legality of theemergence of the new draft document (up to 2025) could be questioned. Did its lobbyists realize this? (Incidentally, nearly UAH 16 million of budget fundshad been spent on its development).

The General Plan-2025, inter alia, aimed at legalizing the previous decisionsadoptedwith the gross violations of the applicable law: by increasing the construction density, limiting the green areas and allowing the construction on the Dnipro hills. The construction prohibition areas in the current General Plan were eliminated in its updated version. The permits could no longer be decided at the Kyiv City Council’s meetings. It was legalized all together. Period.This can be treated as a‘wholesale’purchase of ‘indulgences’for developers to build the illegal facilities in transport and industrial zones, in the yards of the existing houses, stadiums, green zones and the Dnipro hills.

The dominance of developers in the Klytschko’steam can explain his fundamental change once in city government. The Mayor, obviously, listens to the developers, who decided to accomplish what failed in the times of Chernovetskyor Popov. The developers headed by the deputy mayor Igor Nikonovform a skeleton of Klytschko’steam in the Kyiv City State Administration (KCSA). They also control about one third of seats in the City Council. Their interests are clear: to legalize the unlawful buildings and land plots, ‘get back’ the money spent on the election campaign in the Council and earn the money for a new campaign to be held next autumn. In this situation Mayor Klytschko became a hostage of developers’ interests, or even their associate. Anyway, he came on board of his "Titanic" and approached hispolitical discreditation.

The publicity without the public

The haste debates over the General Plan-2025 and non-compliance with the existing regulations can be attributed to the attempts to legalize the major land fraud worth UAH 50 bln for Kyiv. By the way, didn’t VitaliyKlytschkomention these a few months ago?

The discussion of the 2025General Plan was held in breach of the applicable law. The new team did not dare to disclose the true picture of the capital city development (planning, land use, construction, production location, etc.).

The developers’ lobbyists were trying to "securethe success" in a quiet way. On October 27, 2014, the day after the parliamentary elections, the Ministry of Regional Development, Construction, Housing and Utilities presented the ‘new Kyiv City General Plan for 2025’. Certainly, this document was not discussed with the public. The activists also learned about the meeting by mere chance. Moreover, it was not possible to understand which draft edition (of 2011 or 2014)was issued for the discussion.

Under public pressure the draft General Plan-2025 was withdrawn from further consideration. But the officials were quick to produce the falsified Minutes of the meeting of Architecture and City Planning Council.

It should be noted that the ‘appetites’ of the developers for the construction density had increased. The area of residential development could increase by nearly 4,000 hectares by 2025. The legalization of unlawful construction and dubious land acquisition would be implemented through the constant change of the purpose of land use. Thesigns of data falsification on the size of land for various purposes were present. The lobbyists of the General Plan-2025 suggested the different accounting of theland categories’area, used the unusual land and urban development indicators, and did not specify the size (area) for placement of the social infrastructure.

The indicators of Kyiv Development Strategy-2025, the City target program of land use and protection of land for 2011-2015, the General Planfor 2011 and 2014 were developed by different specialists out of varying statistical data and therefore turned significantly different (see Table 1).

Table 1. The Land Fund of Kyiv

Sources: www.kmr.gov.ua, own calculation

The calculations demonstrate a tendency to increase the area of residential development while cutting the size of landscape and recreational lands (deforestation, removal of the parks and gardens), industrial, utilities and storage areas (destruction of industrial capacity) and water surface (building on the banks of the Dnipro river and the lakes) (see also Table 2).

Table 2. Suggested changes for Kyiv Land Fund

Source: own calculations

 It should be noted that usually the residential housing project is based on the short-term lease contract. The agreement is often broken as soon as construction is over. The city budgetno longer receives the money for land plot lease. At the same time, the mentioned land plot could be sold, ensuring the upcoming constant contributions of land tax into the city budget. According to the modest estimates, the cost per one hectare of land is estimated at USD 1 million. In the meanwhile the KCSA officials remain ‘puzzled’ where to find tens of millions of hryvnias for the city budget.

Mega-village

The General Plan-2025 actually foresees the transformation of Kyiv into the mega-village: the city of predominantly residential districts, where one can mostly sleep and rest, but not work. The landscapes and recreational land, the industrial, utility and storage areas, as well as transport infrastructure and public buildings will disappear in favor of residential blocks. Housing, housing, and more housing everywhere: in the courtyards, replacing the children's playgrounds and stadiums, former factories and bakeries, tram and trolleybus depots, parking lots and the banks of Dnipro.

Where will the Kyivans work? The developers of the General Plan suggest relocating the production facilities outside the city borders. But the suburban area does not belong to Kyiv municipality. Hardly the Kiev Oblast Administration, the councils of towns and villages nearby Kyiv will be happy to find their lands (by the way, mostly distributed among individual shareholders long ago, and therefore private) hosting Kyiv factories, tram and trolleybus depots and parking lots. Yet no one had mentioned this. This was a‘surprise’ from the General Plan lobbyists.

Moreover, nobody mentioned how many hours one would spend every day to get to work. This was the price the capital's residents paid for the desire to build up the housing. Incidentally, the mentioned housing was not affordable to ordinary citizens.

By-passing thecity budget

The lobbyists of the general Plan-2025 forgot to mention the reduced revenues of the city budget, resulting from the increased share of residential development land. The rent rate for residential land is only 0.1%, and other land categories are taxed at 3 to 12%rates.In addition, as notedbefore, the developers usually agree on the short term lease andfail to prolong this agreement. Therefore, after construction finalization the city getsno further income from land.

Besides, the residential development hardly creates the new jobs (except the construction period). An increase in revenue from the personal income tax without the actual employment growth is unrealistic. This tax, however, is considered to be the one of articlessetting the revenue base for the city. It is easy to predict that over time the commercial viability of the capital's housing would decrease, as finding a job in Kyiv wouldget problematic. Then the talks about the restoration of production facilities would re-emerge. Where to build them? All suitable areas would turn occupiedby housing or commercial mini- and mega-malls?

Why think of innovations, new production and an access to the new markets, if one can build a ‘sky-scraper’, sell the apartments, withdraw money offshore and fail to pay for the land. One can continue to misuse city’s metropolitan status and require the national government to leave the 100% personal income tax in the city (despite such numbers were not produced by Kyiv).

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Instead of creating the myths about the General Plan-2025, a tool to bring happiness to Kyiv, the Klytschko’s team should finally concentrate on reforms. The last meeting of the Cabinet of Ministers had produced an unambiguous verdict –one has to look for the [financial] reserves. Dozens of articles had been published in line with multiple public appeals on how to increase the city’s revenues. Unfortunately, the Klytschko’steam failed to pay much attention to the voters. Are the next elections allegedly far? The crisis will escalate further, and sooner or later one will have to pay the bills. Hopefully not too late –neither for the city, nor for its current leaders.

The article was prepared in frames of the project "Public Control in Kyiv: Monitoring the Development and Implementation of the Anti-Corruption Policy in Kyiv" implemented by the Open Society Foundation and supported by the International Renaissance Foundation.