Business has landed. The Kyiv City Council will raise rent for land plots in the capital by several times

Yesterday deputies of the Kyiv City Council reviewed the draft decision on regulatory appraisal of land in the capital. According to the document, the cost of land plots will be significantly increased and so will the rent for their use by commercial structures. Presumably, the changes will take effect on January 1, 2015 and will bring the budget an additional UAH 500 – 700 mn. At the same time, some deputies say the thirst for easy money for the city budget will result in major downsizing in Kyiv.

Capital budget to be filled with land

The official agenda of the recent session of the City Council consisted of six items that are mainly of a protocol nature. The most debatable issue was introduced to the agenda by the head of the VR Budget Committee and representative of the UDAR faction Andriy Strannikov as urgent. In particular, it was the draft decision On Approval of Technical Documentation for Regulatory Appraisal of Land Plots in Kyiv. The commission hastily completed the document on the eve of the session.

“First of all, we are obligated by law to review the regulations once every seven years. The last time it was done was in 2007. So, now it is our turn. Secondly, the draft decision will bring the city budget an additional UAH 500 – 700 mn,” the deputy explained.
However, not all colleagues support him. “Some coefficients were increased by 2.5 times for some unknown reason. In some districts the value of a land plot in an industrial zone is appraised at US $30,000. There is no such price on the market today. In most cases, the rent for entrepreneurs, particularly major manufacturers or chains, will grow by 100%,” says the former secretary of the land commission Serhiy Krymchak. He adds that such a decision will result in essential downsizing in the capital and a rise in prices of goods and services.

“In 2007 we could change land rating because there was economic growth: any business owner could rely on available loans, the currency exchange rate was UAH 5/US $1. Now, when business is in a deep crisis, worsening the environment would mean cutting the ground from under its feet. I will offer only one figure – over the last year only 400 of the 575 major enterprises managed to survive in Kyiv,” the deputy said.

His point of view was also supported by the former head of the Kyiv City State Administration Volodymyr Bondarenko. “Kyiv is already in a state of technical default, which is difficult to overcome,” he said. Deputies raised many questions regarding the method of calculation that cost the budget UAH 3 mn.

“It is unclear why the land prices for the Dream Town shopping and entertainment center, for example, increase by a few pennies, while in those places where there is no trade or production they increase by several times,” member of the Batkivshchyna party Tetyana Melykhova hinted while lobbying for the draft decision. After two hours of verbal skirmishes, the deputies decided to postpone review of the document to the next sessions. However, the UDAR faction, which has a majority in the Kyiv City Council, believes the adoption of this document a sure thing.

From the wrong address

Other draft resolutions taken at the session were more formal. Deputies approved the issuance of IDs to their assistants and brought urban regulations in compliance with the Law On the Real Estate Tax. Also, the draft decision of awarding the rank of a civil servant got Vitaliy Klitschko all riled up. “I think this is ludicrous,” he said.

The Samopomich faction is known for its nationalist sentiment. Its representative Serhiy Husovskiy proposed to ban employees of the Kyiv City Council from using Russian e-mail domains for their office correspondence. The idea was supported in the session hall. In the near future the council’s employees will be obligated to continue their correspondence only through Ukrainian platforms.