Rent without privileges: Why it’s time to restore fair rules for using state and municipal property
Volodymyr Kreidenko, Ukrainian MP, deputy chairman of the Committee on Transport
The war has changed the rules of the game in every sphere of our lives. The state had to act quickly - to support the economy, preserve jobs, and prevent enterprises that use state or municipal property from shutting down. That’s why, in 2022, a simplified mechanism for the automatic extension of lease agreements was introduced. Adopted in the midst of war, this mechanism served as a temporary “safety cushion.” But any temporary measure, if it lasts too long, can become a threat to transparency, competition, and fairness.
Today, Ukraine faces a new challenge: how to reconcile wartime necessity with legal integrity. That’s why I registered draft law No. 14111, which restores the general rules for extending leases of state and municipal property. Its goal is to rebuild trust in the leasing system, eliminate “manual control,” and ensure equal conditions for everyone.
When the automatic lease extension was introduced in 2022, it seemed like a logical decision. Government agencies were working under extraordinary conditions, auctions couldn’t always be held, and many businesses had evacuated or temporarily halted operations. But within a year, dangerous consequences began to appear.
First and foremost, it created privileges for a select few. Automatic extensions allowed certain tenants to effectively gain a monopoly over the use of state property - without competition, oversight, or price bidding. As a result, some continue using public resources at artificially low rates, while others don’t even get a chance to compete for access through transparent auctions. For the budget, this means losses of tens of millions of hryvnias every year - money that could otherwise go toward reconstruction, military support, or community development.
Another issue is the growing risk of corruption. The Cabinet of Ministers’ ability to “set alternative rules” opened the door to discretionary decisions - who gets their lease renewed and who doesn’t. This contradicts the very idea of electronic auctions, which were designed to make leasing transparent and competitive.
But the consequences go far beyond finances. The system of leasing state and municipal property is not just a collection of contracts - it’s an economy of trust. It reflects how the state treats business, communities, and investors. When the rules change behind closed doors, without open competition, society begins to lose faith not only in procedures but in the fairness of the state as an institution. For small businesses, that means closed doors; for communities - smaller budgets; for society - a growing gap between words and actions.
When leasing becomes a privilege rather than an opportunity, the incentive to improve disappears. Those who win are not the ones offering more to the state, but those with the right connections. This undermines confidence in the entire market, creates hidden inequality, and scares away investors who depend on stable, transparent conditions.
That’s why the draft law proposes reinstating Article 18 of the Law “On Lease of State and Municipal Property.” It restores the standard procedure for lease extensions - submitting applications through an electronic system, without physical presence, within short timeframes, and holding auctions where required by law. And most importantly, it removes government interference in rules that should be the same for all. This isn’t about canceling support for business - it’s about restoring fairness. Not bureaucracy, but order.
Some might ask: why change the system while martial law continues? But the war has taught us that transparency is also a weapon. When the budget fights for every hryvnia and communities are searching for resources to rebuild, unfair advantages for certain tenants become not just a technical flaw but a public loss. Restoring fair leasing rules means reviving competition, opening the market to new businesses, increasing budget revenues, and reducing corruption risks.
Everyone wins. The state gains additional revenue. Every honest auction is not just a lease - it’s fair pricing. Today, leasing accounts for about three percent of local budget revenues, and returning to open procedures could double that. Communities gain equal access to resources. Small businesses can again compete on equal terms - crucial during post-war recovery, when every entrepreneur, every workshop, every café means new jobs and tax contributions.
Business gains predictable rules. When everyone operates under the same conditions, the fear of backroom deals disappears, and investors see stability and openness. This builds trust - without which development is impossible.
Every crisis gives us a chance to move forward. The system of automatic lease extensions helped us survive the first months of the war, but now it’s time to learn to live, not just survive. Draft law No. 14111 is not about bureaucracy - it’s about responsibility and equality. Even in wartime, we must remain honest with ourselves. State and municipal property belong to all citizens and cannot remain hostage to those who obtained it without fair competition.
Society today needs not only reforms but also confidence in justice. When citizens see the state following the rules even in hard times, they too are ready to act fairly. This is a chain of trust that begins with a transparent auction and ends with a strong state. The draft law to restore transparent leasing is a small but meaningful step in that direction. If we can be honest in small things, we can be honest in the big ones - in rebuilding the country, in reforming institutions, and in shaping the relationship between government and citizens.
