11 June 2004 07:46
DUMA OKAYS BILLS PROMISING HOUSING MARKET REVOLUTION
The 'revolutionary' initiatives, their supporters in the Duma
believe, will in the end lead to an unavoidable drop in real estate
MOSCOW. June 10 (Interfax) - On Thursday, the Russian State Duma passed in the first reading a package of bills that
the authorities think will ensure affordable housing to almost every Russian citizen in ten or fifteen years'
time.
prices that are now out of reach for a majority of Russian.
The draft code sets down the responsibilities of local government
bodies to create conditions for effective management, and also
On the other hand, the communists and Rodina faction members filed out of the hall in demonstration of their
opposition to what they feel are bills that infringe on citizens' rights.
Industry and Energy Minister Viktor Khristenko said that the main
task of the packet of draft laws is to create conditions under which
Among the main bills the Duma passed are draft Residential and City Planning codes, amendments to the Tax Code, bills
concerning credit history and the main principles for regulating utilities, changes to laws concerning federal mortgage
security, insurance and state registration of real estate property and deals done with it.
However, the deputies' main success, the authorities think, is the first-reading passage of the Housing Code.
The government sees this as a red letter event, Industry and Energy Minister Viktor Khristenko told the press, having
taken part in the legislative debate. This code "is, in fact, the foundation of foundations," he said.
"The Housing Code is a document that various governments and various Dumas have worked on for ten years, and every
time there was not enough determination to take this process to its conclusion," Khristenko said. The draft
emphasizes the delimitation of authorities between state agencies, the country's constituent regions and local
administrations in the field of housing. The draft envisions that low-income citizens that need improved living
conditions have a right to free housing under social compacts where a tenant pays basic utilities, but does not own. It
rules out first- priority provision of living space, which will be provided on a first- come first-served basis by
social compact. The exceptions would be situations that arise in connection with natural disasters or other extreme
situations. These social compacts would be concluded without time restrictions. The Code regulates providing housing
this way to those in the military, citizens released from the military and members of their families. The draft settles
the issue of housing being used between owner and former members of the owner's family. The draft sets out rules
for ensuring the residential rights of an owner that loses his residential space due to seizure of the land on which it
stands, including multi-apartment residences. The document also lays out in detail a procedure for the seizure of
residential space. For the first time, the Housing Code envisions special chapters devoted particularly to regulating
the change from residential to non- residential space and vice versa, the rearrangement and re-planning of residential
space. It contains the institutions of service housing. The draft code establishes an owner's obligations in
finding management for multi-dwelling buildings. If during a certain period of time the owners do not decide how such a
building is to be managed, that choice falls to a local administrative body at tender.
establishes the rights of citizens as consumers of services to upkeep and repair residential property, and also of
communal services.
residential property will become accessible throughout Russia for a significant number of Russian citizens.
"The main thing is to create conditions on this market so that residential property is varied and meets demand
from different sections of the population," Khristenko said at the first plenary session of the State Duma, in
response to questions from journalists.
The passing of a packet of draft laws on the formation of a market of accessible real estate will make it possible to
increase the level of mortgage crediting 30-fold by 2010 compared with the present day to reach 330 billion rubles, the
minister said.
of the draft laws, and if so - when.
He said that it is important to pay attention to another fact:
The minister said that the passing of the packet of laws would make it possible to increase residential construction
to 80 million square meters per year by 2010. He said that at the moment 9.5% of families are able to acquire a standard
apartment. The packet of laws will increase this figure to 30% by 2010.
If the packet is passed "the situation will change for all participants on the real estate market,"
Khristenko said.
However, Khristenko did not give a direct answer to a question as to whether residential property in Moscow will fall
in price as a result
In turn, Duma deputy Boris Gryzlov said that not more than 9% of
the population is currently able to acquire property, and with the
"average price growth for residential property last year amounted to 26% in the country and 47% in Moscow. If
this average 'temperature' is spread out by territory, it is obvious that high price growth in Moscow was
compensated for by stagnation of residential property prices in many regions," the minister said.
He said that the overheating of the Moscow market is due, among other things, to the peculiarities of the
capital's residential property market. For this reason the government considers one of its main tasks to be to make
this market accessible.
He said that the residential property market never reacts very quickly to legislative change, which is good.
introduction of the packet of laws this figure will increase to about 30% in six years and to 60% in 10 years.
Oleg Morozov, deputy speaker from the United Russia faction, called the packet of draft laws revolutionary. "The
term 'national project' is currently fashionable, these are projects that affect the fate of every person. The
project being considered today is a sort of revolution in our legislation, in the life of the state and of every
citizen," Morozov told journalists.
He said that the essence of the document under consideration "is to make residential property purchases
accessible to everybody." Morozov stressed that after the passage of the law a drop in property prices will be
unavoidable. "This will not happen immediately but, according to our calculations, in five years prices will
unavoidable start to fall and residential property will become accessible," he said. He said that the draft law is
a landmark in the development of Russian legislation.
Morozov explained that mortgages would become more accessible for each citizen due to the drop in interest rates
covered by the law. The passing of the law will also increase the amount of supply on the market, which will also bring
prices down, Morozov said.
[Interfax] |
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