Can IDPs lose the chance to get their own housing? Why a conflict has emerged around the State Youth Housing agency

Housing remains one of the main problems for hundreds of thousands of internally displaced persons in Ukraine. After several years of war, many families are still living in rented apartments, dormitories, modular towns, or temporary accommodations, while state housing programs are unable to cover even a small portion of the actual needs. This is precisely why the controversy surrounding Derzhmolodzhytlo has gone far beyond a bureaucratic dispute between ministries and has triggered a strong reaction from human rights advocates and civil society organizations.

The reason was a government decision regarding the possible transfer of State Fund for Support of Youth Housing Construction (Derzhmolodzhytlo) from the management of the Ministry for Communities and Territories Development of Ukraine to the Ministry of Economic Development and Trade of Ukraine. Formally, this concerns only a change in the management of a state institution; however, critics of the idea believe that it could actually be the first step toward creating a single operator for state housing programs and the eventual merger of Derzhmolodzhytlo and Ukrfinzhytlo — a profitable structure that administers the state mortgage program eOselia.

“It may seem like an administrative decision — something is being merged with something else. But we see significant risks to the housing rights of internally displaced persons. Thousands of people currently waiting in line to receive housing could simply lose that opportunity because of the risks created by such a decision”, - said Aliona Luniova, Advocacy Director of the Human Rights Center ZMINA.

It should be recalled that Derzhmolodzhytlo is a state institution that, among other things, implements preferential housing loan programs for internally displaced persons. These are housing loans on favorable terms financed with the support of international donors. It is through these programs that displaced persons can gain access to housing under conditions that are often more affordable than standard banking mechanisms.

After a wave of criticism, the government was forced to pause the initiative. At the same time, the idea of creating a “single center” for housing policy remains on the agenda.

“I have been waiting in line for the Derzhmolodzhytlo program for several years and am waiting for my chance to receive a loan. For me, it was one of the few real opportunities to acquire my own home. The conditions there are more affordable than those offered by banks or mortgage programs. Not all displaced persons have high salaries or stable jobs that would allow them to meet all the requirements. So when people started talking about possible changes or reforms, it caused concern. When you spend years waiting in line and then the rules suddenly begin to change, there is a fear that everything will have to start over from scratch”, - says Vadym, an IDP from Luhansk.

Risks

On April 30, 2026, the Ministry of Economy, Environment, and Agriculture submitted to the Cabinet of Ministers a draft resolution on transferring the unified property complex of Derzhmolodzhytlo into its sphere of management.

Formally, the issue concerned changing the governing authority of a state institution. However, according to human rights advocates and civil society organizations, the change in subordination may not be a technical decision but rather the first step toward merging Derzhmolodzhytlo with Ukrfinzhytlo under the management of a single ministry as a unified operator of state housing programs.

Another detail raised additional concerns. After the resolution was adopted, the government planned to conduct a due diligence procedure — a comprehensive review of the activities of both institutions. In corporate practice, such a review often precedes mergers, acquisitions, or large-scale restructuring.

“The decision to absorb Derzhmolodzhytlo, adopted in a non-transparent manner without the participation of interested stakeholders, will have a number of negative consequences”, - states an open appeal signed by more than 50 civil society organizations.

The first risk highlighted by human rights advocates concerns the very model of state support.

“When we talk about housing for veterans, internally displaced persons, or young people, we are not talking only about a financial instrument. It is part of housing policy and social support. Therefore, it would be important to preserve the functioning of Derzhmolodzhytlo under the ‘umbrella’ of the Ministry for Communities and Territories Development or another body that implements housing policy specifically as a social policy. For us, the transfer to the Ministry of Economy is a signal that housing policy for IDPs may shift from the social sphere to the economic one. And this could potentially lead to more expensive lending”, - Aliona Luniova said in a comment to OstroV.

She explains that Derzhmolodzhytlo was created as a social instrument to support the population, not as a profit-generating structure. That is why, in her view, it makes more sense to keep it within the system that shapes the state's social and housing policy. This difference in approaches has become the main argument of critics of the government’s proposal. While Derzhmolodzhytlo operates as a support mechanism for specific categories of the population, Ukrfinzhytlo operates according to a financial model that is much more closely tied to banking instruments and assessments of people's creditworthiness.

Many IDPs today simply cannot take advantage of the eOselia program because they do not meet banking requirements. Participation requires a stable official income, verified employment, and compliance with financial criteria. For a person who has lost their home, gone through evacuation, and relocated several times, these conditions may prove impossible to meet.

But the issue of accessibility is only one part of the problem. An equally important risk concerns international funding. Today, Derzhmolodzhytlo works not only with state funds. The lion’s share of its programs is financed by international partners and donors. If the rules begin to change after agreements have already been concluded and programs launched, international partners may perceive this as a signal of instability in state policy.

“For 2026, the total funding for housing programs amounted to €58 million. In addition, there is more than €110 million that was planned to be directed toward new programs, particularly for veterans. And what we hear from donors is that they do not intend to finance a private joint-stock company, which is what Ukrfinzhytlo is. Therefore, there is a risk that some housing programs may simply be discontinued”, - explained Aliona Luniova.

Another argument concerns local programs. Today, Derzhmolodzhytlo implements more than 65 programs jointly with local communities, some of which are co-financed from local budgets. Human rights advocates fear that any structural changes could affect the stability of already launched mechanisms and create uncertainty for communities that have already assumed financial obligations.

Critics also separately point to the financial aspect of the reform itself. This concerns additional expenses for audits, reviews of institutional activities, legal procedures, and the re-registration of institutions.

In addition, human rights advocates question the very logic of creating a “single operator of housing programs”. They point out that housing support in Ukraine is already distributed among various ministries. For example, the Ministry of Social Policy is responsible for subsidies and a number of social programs, the Ministry for Communities and Territories Development works on housing for IDPs and municipal projects, while the Ministry for Veterans Affairs has its own support mechanisms for military personnel.

The Cabinet of Ministers’ position

During the government question hour in the Verkhovna Rada, Ukraine’s Prime Minister separately denied reports about a possible “merger” of the two institutions.

“Yes, to set the record straight — no one is planning to merge these two institutions (Derzhmolodzhytlo and Ukrfinzhytlo — editor’s note). They are completely different in the nature of their activities”, - stated Yuliia Svyrydenko.

According to her, Derzhmolodzhytlo and Ukrfinzhytlo have different functions and areas of activity. While Derzhmolodzhytlo works with social housing support programs and preferential mechanisms, Ukrfinzhytlo effectively serves as the state's main mortgage institution.

The Ministry of Economy states that one of the practical steps should be designating the Ministry of Economy as the governing body of Derzhmolodzhytlo. At the same time, the government emphasizes that Derzhmolodzhytlo and Ukrfinzhytlo will remain separate legal entities and will continue operating under their current conditions.

Government officials also speak separately about “attracting additional financing to the housing sector”.

“The state has different instruments to support people in acquiring housing, and it is important that they operate within a common framework. Derzhmolodzhytlo has experience implementing targeted housing programs, while Ukrfinzhytlo has experience scaling affordable mortgages through banks. We want to effectively combine these capabilities and create a foundation for attracting additional financing to the housing sector”, - noted Vitalii Petruk, Deputy Minister of Economy, Environment, and Agriculture of Ukraine.

It is precisely the idea of creating a “single center” for housing mechanisms that government officials cite as one of the key arguments in favor of the changes. However, after a wave of criticism, the process had to be put on hold. On May 13, the government postponed for 60 days any decision regarding further changes involving Derzhmolodzhytlo and Ukrfinzhytlo. This was announced during a plenary session of the Verkhovna Rada by Halyna Tretiakova, a member of parliament from the Servant of the People faction.

According to her, the postponement was the result of reactions from civil society organizations, members of parliament, and international partners who publicly expressed concern about the possible consequences of the reform.

Tretiakova also drew attention to the difference between the operating models of the two institutions and stated that they are aimed at different categories of people.

“Derzhmolodzhytlo provided housing for people who do not have sufficient income to qualify for a mortgage loan. Ukrfinzhytlo, on the other hand, provides housing for those who have sufficient salaries. The merger of these institutions will lead to antisocial consequences”, - Halyna Tretiakova stated.

IDPs and housing

According to human rights advocates, the discussion surrounding Derzhmolodzhytlo has revealed another, much broader problem — Ukraine still lacks a comprehensive housing policy for internally displaced persons. Despite the existence of separate support programs, the scale of assistance still does not match the scale of need. There are individual programs, local initiatives, international projects, eOselia, temporary housing schemes, but there is still no unified system.

“I left Crimea many years ago, and throughout all this time the issue of having my own housing has remained unresolved. To be honest, many displaced persons have already accumulated fatigue from constant promises and new programs. We constantly hear that various support mechanisms are being launched, but when you start looking into them, it turns out that either you do not meet the criteria, or you spend years waiting in line, or you simply cannot fulfill all the requirements. It creates the impression that some programs exist more on paper or in presentations than in real life. For a person who has lost their home, it is very important not just to hear about a new project, but to understand that it actually works and that one day you will receive a result”, - says Svitlana, an IDP from Crimea.

According to Aliona Luniova, Advocacy Director of the Human Rights Center ZMINA, housing remains the primary problem for most displaced persons regardless of the region in which they live.

“It is obvious that the solutions that exist today are insufficient, because housing remains the number one need for internally displaced persons”, - she said.

Luniova notes that the existing state support mechanisms are insufficient both in terms of temporary housing and long-term programs. At the same time, even the instruments that are already functioning are unable to cover the real scale of the need.

“Even if we talk about Derzhmolodzhytlo and the volume of its funding, it can meet the needs of approximately four thousand families, whereas the actual need is hundreds of thousands of families”, - she noted.

For this reason, in the human rights advocate’s view, the state should not revise or weaken existing mechanisms, but rather expand the support system and create new instruments.

Luniova also points out separately that different housing programs serve different categories of people and cannot fully replace one another.

“Derzhmolodzhytlo works specifically with the category of IDPs who have jobs but do not have sufficiently high incomes to, for example, make a substantial down payment immediately, as is often required by other mortgage mechanisms. At the same time, there is also eOselia, which addresses certain needs and serves specific groups, including military personnel and civil servants. I am not saying that eOselia is unnecessary. But different groups need different instruments”, - she said.

The human rights advocate also emphasizes that expanding housing policy is impossible without international support. At the same time, to attract new resources, the state must ensure the stability and predictability of its own decisions.

“Why should international partners invest money if they finance programs and then the institution administering those funds can be liquidated, reassigned, or merged with another structure? Therefore, the current solutions are not enough; more is needed. But this requires additional resources that do not exist in the state budget. And to attract donors, the state must ensure stability, predictability, and transparency. That is why, in my opinion, the processes currently taking place around Derzhmolodzhytlo may negatively affect the future involvement of international partners” - Aliona Luniova noted.

In her view, efforts should focus on ensuring the predictability of state policy, transparent procedures, and the creation of as many different instruments as possible to meet the housing needs of IDPs — at both the local and national levels.

By Vladyslav Bulatchik, OstroV