04 November 2003 03:23
U.S. Wants Slice of Housing Pie
Russia's booming housing sector and its long-term prospects have caught the eye of Washington, which is urging
U.S. companies to get a slice of the growing pie.
U.S. Secretary of Housing and Urban Development Mel Martinez, who is visiting Moscow, told reporters Monday that U.S.
companies would participate in a number of construction projects in Russia, and that the U.S. Congress was considering
the allocation of $20 million for the promotion of mortgage programs in the country.
Cooperation plans, to be finalized by the end of 2003, include the creation of a U.S.-Russia working group on
construction, mortgages and housing. Corporations AIG, Fannie Mae, OPIC and General Motors subsidiary G Mac, which work
in the securities, mortgage and construction sectors, have expressed interest in the group, State Construction Committee
head Nikolai Koshman said in a statement.
Joint projects include an "American Village" in central Russia and pooling expertise for the construction
of high-rise buildings in Moscow.
The working group will also host a seminar on mortgages next February in the Moscow Region town of Dubna, while U.S.
experts will share their experience with Russian companies in the utilities sector and on inexpensive house-building
techniques.
"It is very encouraging to see Secretary Martinez here," said Andrew Somers, head of the American Chamber
of Commerce in Russia. "Housing issues in this country have not been paid much attention until very
recently."
Martinez, who also met Prime Minister Mikhail Kasyanov on Monday and was scheduled to meet newly elected St.
Petersburg Governor Valentina Matviyenko on Tuesday, said the joint projects were "crucial" for the
development of home financing and the introduction of new construction techniques to the country.
Somers said the U.S. could also learn from Russia, since state-owned housing is the "least effective"
sector of American real estate. "A look at how the Russians transferred ownership of municipal apartments to
private individuals in the '90s may be of interest."
"If they build a lot of new housing as part of these projects, we would gladly refinance them later on,"
said Andrei Vishnevsky, spokesman for the State Agency for Housing Mortgage Lending.
Gerald Gaige, real estate partner at Ernst & Young in Moscow, said the projects were indicative of the
recognition of Russia as a "large and developing market." He said that inefficient legislation and a lack of
credit history or verifiable sources of income for the majority of Russians was likely to prevent large U.S. mortgage
operators from entering the market anytime soon.
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