Housing sector reforms: Uzbekistan plans 120,000 new apartments next year

President Shavkat Mirziyoyev reviewed the proposed system to guarantee public funds for housing construction during a presentation on December 12, as reported by the Presidential Press Service.

This year, 100,000 apartment units are expected to be completed, with plans to build 120,000 new homes next year. However, challenges persist in the housing sector, including unethical practices by certain developers. A lack of regulatory oversight, insufficient digitalization, and limited transparency have allowed these issues to flourish. Many prospective homeowners pay developers directly, bypassing banks, often leading to undocumented financial transactions. As a result, house deliveries are frequently delayed, and buyers’ funds become inaccessible or "frozen." Additionally, share agreements are unregistered, primarily benefiting developers.

To address these concerns, President Mirziyoyev instructed establishing a system to safeguard public funds during a meeting on September 23. The presentation showcased proposals for implementing such a system.

The “Yescrow” system, widely tested internationally, was highlighted as a potential solution. Under this system, a commercial bank creates a dedicated Yescrow account for each construction project based on an agreement between the buyer and the bank. Buyers deposit funds into this account, which are then used as a basis for low-interest loans to customers. The funds remain secure until the project is completed, at which point they are transferred to the developer. Should the developer fail to meet obligations, the funds are refunded to the buyer. Additionally, Yescrow account funds are protected from collection or seizure.

President Mirziyoyev approved the initiative and instructed the creation of a legal framework for the system, as well as its integration into relevant government ministries and construction-related entities.