Izvestia: "Privatisation of flats to be replaced by renting"
In a meeting in Istra on Monday, Minister of Regional Development Viktor Basargin suggested to Prime Minister Vladimir Putin that all issues concerning state construction should be handed over to the new state company the State Housing Corporation. Financial functions could be transferred to the State Housing Construction Bank.
State-owned flats should only be purchased in the primary market and only in buildings constructed using modern technologies, Basargin said. He added that under obligations to certain categories of people 80% of financing would go on the secondary housing market, thus fuelling the demand in this market and raising the price per square meter.
“We have to revive the rental housing market. To do this we need to give an impetus to the creation of specialist companies and improve tax legislation,” the prime minister said, “so that people renting flats can be confident they won’t be kicked out of their homes in breach of their rental agreements. Also please do not forget about the creation of a social housing fund.
The Minister of Regional Development outlined three main social groups. The Ministry would implement separate social housing policies for each of these groups.
People in socially disadvantaged groups and employees of the Regional Development Ministry would be offered social housing. People on higher incomes would be provided with rental accommodation, including corporate rented accommodation. And the Ministry is promising affordable prices for people who are in a position to buy their own homes.
But at the same time the Ministry considers it necessary to stop the privatisation of housing. The state should provide housing at social rents or under rent to buy schemes, furthermore the Ministry will only allow families with three or more children to purchase this type of housing. The Ministry is planning to create a new body for social housing needs, the State Housing Corporation.
“We believe that we have to create a state housing reserve, moreover any investment in this new structure should be recouped,” the minister said. “It is only commercial rent that does not need to be subsidised. The state will give preferential treatment to corporate rent and even more so to social rent.”
Putin did not object to any of the points and ordered that all the initiatives be adopted as action points. Economic Development Minister Elvira Nabiullina did not raise any objections either, despite the fact that the Economic Development and Finance Ministries usually oppose the establishment of new state structures.
Nabiullina only spoke out against a few points of the Regional Development Ministry proposals, for instance the ban on non-stock market trade in construction materials. The Ministry wanted to lower prices by 15-20%, but the head of the Economic Development Ministry stood up for the business community, as for many of them it is more convenient to work that way. In addition, the Regional Development Ministry and antimonopolists want to bring in controls on tariff increases for the transportation of construction materials.
Another way of lowering prices would be to reduce the number of construction approval procedures. The Regional Development Ministry has estimated there are around 100 of them. Some cities have already managed to cut them to 33, of which 12 are expected to remain in place in the long term, and which you should be able to get through within three months. If non-state construction controls are introduced then developers could save even more time, the minister claims.
According to the Regional Development Ministry more than half the population wants to improve their living conditions, but only one in four are in a position to do so and then only by taking out a loan. Last year 62.3 million square metres of housing were built. Vladimir Putin forecasts that by 2015, another 90 million square metres will be built in Russia.
Maria Zhebit
