Housing policy and municipal informational and consultative
efforts for citizens

Alexander Belyaev,
Ukrainian Academy of Public Administration, Odessa Branch

Introduction
Ukraine is on a way of transition of its economy. This process is hard and painful for people as well for national and local government. There is no doubt that one of the most important element of reforming efforts is housing and communal economy reform. The Ukraine’s real estate valued as greatest tangible capital asset that generates approximately one-fifth of all inputs of our national economy. Real estate is of crucial significance for Ukraine, because represents on of the largest segments of the economy, consuming 25% of all investment, 13% of the wealth and representing 20% of the reproducible wealth of the country. 

That is why a housing sphere is vital for all population of the country. It is also vital for local administration because 56 - 89% of housing stock in large cities is a communal property and municipal officials are responsible for it. Meanwhile by the end of 1998 residents privatized 54,2% of communal and enterprise housing stock.  

As a part of this effort, all residents in Ukraine are given a one-time opportunity to claim ownership to the housing unit which has been assigned to them by registering the unit and paying a small one-time fee. Once this step has been completed, the resident becomes the owner of his apartment. Non-residential spaces such as shops may now also be privatized. The next step after unit privatization should be formation of condominiums (local legal name - multifamily co-owners’ association). 

So, the state and private owners became co-owners of multifamily buildings and such situation required a new form of property management. Ukrainian government decided to use condominium structure to manage multifamily buildings with great number of owners. It was defined in «Privatization of the state housing stock» law (1992), The State Housing Policy Concept (1995), Cabinet of  Ministry decrees on «Formation of  multifamily building co-owners’ associations» (#588 as of 1995) and «Program on reforming of housing and municipal economy in 1999-2001 years» (#113 as of 1999).

Multifamily co-owners’ association
The national government’s goal of transferring responsibility for housing and communal services from the government to residents is a widely agreed upon goal. Perhaps that is why government officials in some cities have seen the importance of transferring financial and decision making responsibility from the municipality to privatized apartment owners through the formation of Owners’ Association.
As with any government program part of the benefit to government is the direct benefits gained by citizens. Thus formation of condominium proves a number of its  benefits and allows 

residents: 
•	to become an owner of not only the apartments, but also the whole buildings where they live in as well an adjacent territory.
•	to develop an own structure to manage own buildings, and monitor all the works of current and capital repair. 
•	to improve significantly the actual state of the own building and quality of life in it.
•	to monitor of all the Boards' activities and to affect on all the residents' violations, which are in conflict with  approved agreements .
•	to attract the private contractors to manage the condominiums, and to conduct all the works of current repair.
local executive bodies:
•	fully or partly eliminate monopoly of the existing post Soviet structure of housing management, by subdividing its function on a private (state) ownership and on a private (state) management;
•	to reduce significantly the expenses from municipal budget on housing sector;
•	to save funds, time and efforts that related to rent and utility collection, by transferring these function directly to condominium associations. 
•	to delegate the responsibility of property management directly to a residents, that will ensure the reducing the number of complains of the population to local executive bodies of poor state management; 
•	to build a competition relationship in housing sector, to support freedom of population choice of private or state management, that of course will ensure the legal rights of population on housing ownership 
•	to improve not only the existing condition of housing sector in city, but also significantly improve the external city's appearance. 

City policy
National and local governments did definite efforts to promote condominium program ahead last years. However population is quite poor informed of actual housing reforming process and considered that the luck of information not only deprive it rights of people on property ownership, but also created an atmosphere of misunderstanding between municipality and community. 

It so happened  few citizens fully understand condominium concept and few administration are prepared to register large numbers of associations. Since the number of buildings effected by Decree #588 is so large, cities would be well served to formulate a plan to implement the decree in an organized manner. Phased implementation of the decree is one such approach. In a phased program the city would establish categories of building types and then schedule a time frame to promote registration in each building type.
It will be useful to define a city policy concerning on condominium formation: 
1.	Evaluate the existing environment including obstacles and current status (for example, how many Associations have formed and in what types of buildings).
2.	Evaluate and prioritize the current housing problems being faced by the city and determine if and how Association formation would help in resolving these problems.
3.	Draft a resolution that outlines how CM Decree #588 will be implemented and who is responsible for each aspect of implementation.
4.	Consider creating a Housing Reform Department to coordinate the city’s registration effects.
5.	Determine who will act as the city’s representative in Association formation and on subsequent Association business where members are asked to vote.
6.	Estimate impact of any proposed program on city’s resources (both manpower and financial)
7.	Implement the program.
8.	Review the success of the implementation and plan for further phasing.

Association formation will demand the attention of city employees during this period, but the long-term benefits will long outweigh that initial investment.  Clearly defining the city’s policy on issues undetermined by existing legislation and a statement of support by the city is all that may be required for some homeowners to take the initiative to form an Association, but as the balance holder of most buildings the city will undoubtedly play a major role in Association formation.
Municipalities are in the challenging situation of being mandated to form Associations before all related issues have been resolved. Yet it is not uncommon in a transition period for legislation and policy to lag behind the country’s needs. Municipalities have an excellent opportunity to address such issues in a manner in keeping with their unique needs. The methods they choose to use will then be a basis upon which later legislation can be based. In order to effectively resolve such issues, it is important that the municipal government is fully aware of all aspects of Association creation, and plays a leadership role in its development.

Establishing a Housing Reform Department
Local government’s aim is to start mechanism to form condominiums, render assistance to initiative groups of residents to create condominium and operate it, organize coordination between Board’s chairmen and financial, executive municipal structures. But it is quite known anywhere that local executive bodies are overworked by everyday activity and problems.  

Existing experience shows that the condominium formation process was successful when the city Executive Committee (usually in oblast center) created a separate Housing Reform Department.  The first step of this body is to prepare the City Council resolution on municipal housing reform program. It contains condominium program including general organizational scheme, financial aspects such as state dotation, subsides, privileges compensation, relationship between owners (private owners - the state). The new Department functions will foresee formation of municipal policy in housing and communal sphere, coordination of communal tariffs development, management of competition process in housing. Housing Reform Department specialists can concentrate own activity on informing population about its legal rights of property ownership, conducting consulting service, providing registration assistance. Such approach allows to concentrate all condo efforts in one place, to work with citizens directly, to monitor new organizational self-governing structure (condominium) operations. There is another important consideration of necessity of such Department. There are actually two different roles the city must be involved in:  registration mechanism and acting as an owner and member during the formation process and for the units it owns after the Association is formed.  These roles have different interests.  Simply speaking the city becomes both the registration provider and the registration customer.  It will also be a long term Association member since 100% privatization will not be reached for many years.
But a city new executive body takes municipal money and human resources to provide mentioned activity. Moreover, an appointed specialist should run condo program at oblast, rayon level and in cities less than oblast center in the area. 

The other way is to issue comprehensive resolution on condominium formation and operations and delegate all consulting service to privatization bodies of the city. It also has reason because this structure provides initial (apartment) privatization and the next step -  «to privatize» a multifamily building or to say it properly «to make it a not state property» seems very logical. 

Two mentioned ways have right to exist and Ukrainian three years practice proves it. For example, the City Executive Committee Housing Reform Department formed in 11 oblast centers (Kharkiv, Nikolaev etc.), privatization Departments successfully work with residents in Yalta, Donetsk, Severodonetsk.

Municipal informational and consultative efforts
The city executive committee, its Housing Reform Department  (or Privatization Department) should widely inform population about a new form of housing management. It is clear without an adequate level of knowledge and understanding, Associations will not succeed.  The key element in creating a well-informed group of officials, residents and service providers is to develop and implement an informational and consultative (training) program which is available to all Association members and service providers over the long term.

In municipalities, where potential Associations have not yet been identified and residents have little or no knowledge about Owners’ Associations, the municipality will need to spread the Homeowners’ Associations’ concept in order to generate sufficient interest.  The goal of an informational campaign is to engender sufficient interest in Associations in the appropriate type of properties so that an adequate pool of potential Associations can be identified.
Informational techniques may include newspaper articles or announcements, radio or television interviews, a brief, free introductory seminar and personal follow-up discussions with residents of buildings which have been active in privatization of units.

City officials use municipal mass media, leaflets distribution in transports, other kind of advertising. Usually initial informational period lasts one year. Consultative efforts can be subdivided into everyday consultative service and initial training. Ukrainian local authorities collected definite experience on initial training program development and promotion. A training program has mainly seminars and lectures formats.                 

As the Association form of ownership becomes more prevalent throughout the Ukraine, the concept will become more familiar to everyone.  Although to some degree the current level of ignorance will be reduced, there will continue to be segments of the population which are either uninformed or misinformed.  Therefore it is important that a municipality begin its training effort with an introductory training course to insure that everyone - municipal leaders, residents in potential Associations, individuals considering privatization - have the same basic knowledge and understanding of what an Association is.
Once a basic level of understanding has been attained, additional training can take place. From that point forward the types of training can be divided into two groups: city registration workers and representatives and Association members.
Training for City Representatives
This training is designed to introduce city workers to the concept of Owners’ Associations, outline the way in which such Associations operate, provide a detailed understanding of the legal basis for them, and train the workers to complete their tasks related to formation.
Training  for Association Members
The individuals in this group include the city worker(s) assigned to act as the municipal owner’s representative member, privatized commercial space owners and privatized unit owners in general and board or auditing committee members.  There are numerous topics of interest to this group such as training on: the concept, formation and registration, and operations.  Within the operations group there are also a large number of topics that can be covered together or individually such as budget preparation, financial reporting, reserves for capital repair, rules enforcement, communal service contracts and so on.
This training is likely to involve work with individual buildings, to identify and assist them in solving building specific difficulties in the formation and operation of an Association. This approach should help move buildings through the registration process and initial stages of operation.
At the same time, additional seminars should be planned which are designed for an audience of multiple Associations and/or municipal officials.  These seminars will be designed to emphasize all components of an actively operating  Association.  Since it is assumed that at this point, Associations have begun to operate and the municipality is actively engaged in developing and implementing Decree #588, it is useful to have a varied audience. Municipal officials and Association members will need to work together it is therefore valuable to have them participate jointly in the seminars.  By having multiple Associations represented, the members have an opportunity to share experiences and assist each other in suggestions for resolving common issues.  This interaction marks the beginning of a network among Associations, which will continue and benefit both the individual properties and the group as a whole.
When members of the newly formed Associations have a solid, basic understanding of how to run the maintenance, finances and administration of an Association there needs will tend to become more specific.  At this point in the training program, the emphasis is on topic specific workshops rather than on the seminar format.  This mode provides an opportunity to work with smaller groups and concentrate on the details of a specific area of operation.  Workshops are topic specific and use a “hands-on” format.
The final aspect of training is having technical assistance available on an on-going basis. As specific questions or concerns arise,  an Association should be able to contact a previously identified individual or department, which will be available to give assistance in the form of information or guidance on how to address a specific issue.  For some aspects, such as maintenance, cities already have potential resources such as the ZhEK in place.  For other aspects new resources will need to be created.

Recommended Schedule
The following is a guide in scheduling the training program summarized above.  Obviously, municipalities will operate at varying paces, depending on the current status of Associations’ development and the priority which this program receives locally.  In any case, this schedule assumes that prior to the training program, a pool of potential Associations has already been identified and the municipality is actively supportive of the Associations formation program.  Based on these assumptions, it is estimated that over a period of between two to six months, it will be possible to have an initial group of Associations complete all the steps necessary for registration, and have homeowner Association Boards and members who are knowledgeable and capable of operating their Association on a day to day basis.  Within this same timeframe, it should have been possible to identify, hire and train local individuals to serve as trainers over the long term.   After the initial group of buildings in each city, subsequent buildings should be able to complete the process in a shorter time frame.
Preliminary Training
The overall objectives of the initial training session(s) are to provide an introduction and overview to the concept of Associations and the basics of establishing and operating an Association.  
Attendees:  municipal officials, municipal “line” staff who will interact directly with homeowners,  members of prospective Associations, individual owners of privatized units, local trainer(s).
Format:   lecture; questions & answers.
Topics:	
•	current national and local status of privatization and Association formation;
•	 benefits of ownership and Association formation;
•	Homeowners’ Association concept - terminology, definitions and areas for city policy determinstion;
•	current legal basis of Associations; 
•	steps in formation of  an Association;
•	steps in registration.
City Representatives Involved in Registration
The goal of this training is to prepare city workers to start dealing directly with registration and to answer their questions.  
Attendees: city workers involved in registration process.
Format:   lecture; questions & answers.
Topics:	
•	detailed legal basis;
•	detailed registration;
•	purpose and authority of bureau.

Building Meetings  (Homeowner Training)
Having been exposed to the various issues related to Association formation and operation in the initial training session(s), the next training step is to work directly with potential Associations.  At this juncture, the objective is to solidify the commitment of the individual Associations by making certain that they are clear on all the details  and implications of Association formation.  Additionally, individualized training creates an opportunity to explore the more specific concerns  or priorities that a single group may have. 
Attendees:  apartment unit owners (may or may not have all attended initial session) ,
                   local trainer(s).
Format:  lecture; discussion.
Topics:	
•	review of Homeowners’ Association concept - definitions;
•	review of current legislation;
•	advantages of  Association and Association of Associations formation;
•	building specific issues.	
    Operation Seminars
This multi-day series of seminars provides a review of prior training topics along with an in-depth examination of all the key elements of daily Association’s operation.  By this point in time, a core group of Associations have either formed or are in the process of doing so and the municipal government has made significant progress in creating the support and  structure necessary to promote Association formation.  The format for these seminars emphasizes active involvement of seminar participants (activity-based training) as preparation for them to take charge of the daily operations of their Association.
Attendees:  privatized owners who have formed or are in the process of forming their Associations and are likely to be board members, municipal owners representatives, local trainers.
     Format:  lecture, activity based exercises, discussion.
     Topics:	
•	Homeowners’ association concept - review
•	current legislation
•	Associations’ documents
•	registration steps
•	organizational roles (owners, tenants, board, service providers) meetings
•	property maintenance
•	capital planning
•	communal services
•	contract management
•	finance
•	owner relations

Workshops
At the conclusion of the Operations Seminar, all participants should be requested to complete an evaluation.  A portion of the evaluation should solicit information about which topics participants desire further training. Workshop  topics will typically include accounting, budgeting, maintenance and repairs, working with service providers, administration, foundation document review and revision,  role of the Board, etc.  These workshops  provide the opportunity to do in-depth training with smaller groups of residents who have, through their ongoing involvement in the Homeowners’ Associations process to date,  identified themselves as active Association and/or Board members. 
Attendees: Board Members and individual unit owners; local trainers;
Format: discussions; activity-based exercises;
Topics:
•	various - each workshop concentrates on one topic (see above).
Technical Assistance
Within approximately two to six months from the initial executive committee officials meeting, it can be expected that there will be a core of registered buildings with each with an informed group of Association members who are operating their buildings on a day to day basis and are prepared to face challenges that lie ahead as their Association develops and their building ages.  Any additional assistance which they may require is likely to be in the form of technical assistance.  
Technical assistance is the provision of direction and guidance on a specific issue.  For example,  there may occur a conflict between a decision which the Board makes and the individual interest of an owner.  Although the Board is familiar with the limits of  decision-making authority and knows that it acted within those limits, the Board may still want some direction on the most effective method for handling this problem.   In order  to provide this type of assistance, there will need to be someone available to Associations on an as needed basis.  It is assumed that the local trainer will play this role.  The municipality may also wish to create a procedure which Associations should use when they are interested in receiving technical assistance.
The technical assistance need will become less over time as buildings mature, but newly formed Associations will cause the cycle to be repeated.  The availability of this assistance should continue for at least a year after the training and workshops are complete. By having assistance available, Associations will be able to benefit from professional intervention at an early juncture, before a potential problem or issue gets out of hand.
Municipal Partnership
Because of the current economic realities of housing and employment in the Ukraine combined with a virtually non-existent private housing sector until the past several years, the financial  and administrative support and commitment of municipalities is central to the successful adoption of Owners’ Associations as the primary form of home ownership in multi-unit structures.  At the same time, privatized unit owners must recognize and value the expertise and knowledge of municipal officials and staff in the area of housing.  By establishing a partnership, in the form of a working group, which includes both municipal representatives and privatized unit owners, a symbiotic relationship can begin to be established.  This working group will have basic responsibility for developing the program and legislative basis, if necessary for formation of the Associations.
Without the support and assistance of the municipalities,  it will be extremely difficult for residents to create a financially viable framework within which to operate their housing.  At the same time, if privatized unit owners have no faith or trust at all in the municipal leadership and staff, they will not cooperate in administrative or cost measures implemented by the municipality.
This cooperative, working relationship must be established at the earliest possible juncture.

Conclusion
By January 1999 more than 900 condominiums were registered in Ukraine. National and local authorities understand it requires joint activity to expand positive new building management experience. It requires a wide informational campaign through mass media, adoption of proper and clear legislative documents, coordination efforts with public (non-governmental) organizations, community initiative groups. In fact efforts to change housing management system mean efforts to change mentality of urban population. Mentality changing process is not easy and takes sufficient efforts from citizens as well local officials. Such efforts do not include only organizational items but directly depends upon informational and consulting support of responsive administration. An experience shows us when city officials provide active informational support for citizens they will recruit active supporters of municipal housing policy and reforms.

Items to discuss:
•	housing policy and municipal informational and consultative efforts for citizens.
•	possible structure of the city Housing Reform Department and its functions.
•	municipal structure and residents partnership to improve housing stock maintenance and management. 
•	alternatives to municipal consultative and training efforts (private consultative companies, public organizations etc.).
•	criteria to evaluate municipal informational efforts and partnership between administration and citizens.