Uzbekistan is preparing a major shift in how its urban housing stock can be used, opening the way for thousands of first floor apartments in multi-storey buildings to host small trade and service businesses without formal conversion into non-residential property. The initiative promises to unlock new commercial space in densely populated neighborhoods and give a fresh impulse to local entrepreneurship.
Regulatory shift in urban real estate
The new approach was outlined following a meeting chaired by the president on 9 September, where the construction and housing authorities were tasked with drafting a procedure that would allow business use of first floor apartments while retaining their residential status. The minister of construction and housing and communal services noted that there are more than 46 thousand apartments located on the ground floors of multi-storey houses across the country, representing a significant untapped commercial reserve.
“Today, if we count, more than 46 thousand apartments are located on the first floors. More than 200 thousand people will be provided with work, and this will significantly affect household incomes,” the minister said in an interview with the Uzbekistan 24 television channel. The new rules are expected to replace the current system, under which apartment owners must go through a complex series of approvals and permits to transfer their property into the non-residential fund before opening a business.
Under the proposed framework, entrepreneurs would be allowed to conduct certain types of commercial activity in first floor apartments without changing the legal status of the premises. The key technical requirement would be the creation of a separate entrance from the street and the adaptation of the internal space to meet safety and comfort standards for customers and residents alike. This simplifies legal and administrative hurdles while keeping core urban planning norms in place.
Boost to neighborhood services and employment
The reform is targeted primarily at small service businesses that serve residents in their immediate vicinity. Apartments on the first floors could house barbershops, beauty salons, small retail shops, ateliers, and workshops for repairing footwear and household appliances, among other neighborhood services. Such enterprises are already in high demand in many districts and often operate in cramped or informal conditions.
“It will be possible to open a barbershop, an atelier, a beauty salon and other small service facilities without transferring the premises into the non-residential fund — it will be enough to create a separate entrance and adapt the internal space,” the minister explained. By shifting to a simplified, notification-based regime, authorities expect to accelerate business registration on the ground floors, reduce the shadow economy in everyday services, and stimulate job creation close to where people live.
The forecast of more than 200 thousand new jobs reflects the cumulative effect of thousands of micro-enterprises opening or legalizing their activity in residential buildings. At the same time, the change will require clear secondary regulations to prevent conflicts over noise and traffic, protect the interests of residents in upper floors, and ensure that building safety and structural integrity are not compromised by internal remodelling.
Emerging opportunities for real estate and construction
For the urban real estate market, the initiative effectively turns first floor apartments into a flexible mixed use asset class. Owners and investors may re-evaluate the commercial potential of these units, especially in densely populated districts with strong foot traffic. Demand is likely to grow for design and fit out services that can transform standard residential layouts into compact yet attractive commercial spaces while complying with building norms.
The construction sector, including small contractors, engineers, and interior planners, can expect a steady stream of projects related to installing separate entrances, reinforcing façades, reconfiguring internal partitions, and upgrading utilities such as lighting, ventilation, and sound insulation. Standardized solutions for converting first floor apartments into commercial premises — from modular storefronts to ready made service unit layouts — could become a niche market in Uzbekistan's cities.
Financial institutions may also see new demand for targeted lending products that cover renovation, equipment purchase, and working capital for small businesses operating in these newly accessible spaces. As procedures become more predictable and less bureaucratic, the perceived risk of financing such projects could decrease, improving access to credit for entrepreneurs and property owners.
Implications for furniture and interior markets
For international companies in furniture, interior design, shopfitting, and construction finishing, Uzbekistan's decision to open first floor apartments to commercial use signals a new wave of demand for compact, high quality business interiors. Each new barbershop, salon, atelier, or repair workshop will need functional furniture, storage systems, counters, seating, and specialized equipment, as well as durable wall, floor, and ceiling materials suited to higher customer traffic.
Global and regional brands supplying retail and hospitality interiors, modular partitions, doors and façades, lighting, and small scale building solutions can find opportunities in partnering with local developers, fit out contractors, and franchise operators to provide turnkey concepts for ground floor service spaces. Beyond direct sales, the reform strengthens Uzbekistan's investment climate by demonstrating a pragmatic move to ease doing business, support urban entrepreneurship, and make better use of existing buildings — a combination that can make the market more attractive for long term projects in construction, furniture manufacturing, and design.
