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Property without Markets: Housing Policy and Politics in Post-Soviet Russia, 1992–2007

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Comparative European Politics Aims and scope

Abstract

Privatization of housing in Russia since 1992 has created a society of homeowners but failed to convert private property into a market commodity. Radical reformers under Yeltsin mistakenly thought housing markets would emerge naturally once property was privatized and prices were freed. The Putin administration has recently attempted to boost the housing economy as well as the government's legitimacy through a pro-natalist policy intended to make housing more affordable for young families via subsidized loans. Still, private construction and mortgage financing remain miniscule, meaning that most Russians' housing conditions are a function of inheritance from state or family, not of their market positions. Housing has become a source of personal suffering and political discontent among Russians who question the justice of a system which eliminated entitlements without providing affordable market alternatives. This article traces housing politics through three periods: privatization (1992–1994), property without markets (1995–2003), and state-sponsored markets (2004–2007). The Russian case highlights the distinction between property and markets — the former can clearly exist without the latter, particularly in the case of housing markets, which require extensive government coordination to provide liquidity and transform personal property into a market commodity.

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Notes

  1. The Economist, 26 August 2006, p. 32; Mercer Consulting. ‘Cost of Living Press Release,’ 18 June 2007 (www.mercer.com/costofliving); Tvoia ipoteka, November 2007.

  2. ‘Proizvodstvo stroimaterialov — kliuchevoe uslovie realizatsii zhilishchnogo natsproekta,’ 25 September 2007; ‘Vystupleniia Dmitriia Medvedeva na zasedanii prezidiuma Soveta pri Prezidente RF po realizatsii prioritetnykh natsionalnykh proektov i demograficheskoi politike,’ 27 November 2007 (www.rost.ru).

  3. FOM, ‘Khochu zhit' kak belyi chelovek,’ 2003.

  4. FOM. Sotsiologicheskii monitoring natsional'nykh proektov. Seriia 1: vypusky 2, 6, 8 (10 May 2006, 15 November 2006, 3 May 2007).

  5. ‘Opening address at the State Council Presidium on housing policy,’ Kazan, 19 January 2007 (www.kremlin.ru).

  6. Kaluga is a city of 337,000 located 200 km from Moscow. The city's economic base and wages are typical for provincial central Russia. The population is slightly older, better educated, and more ethnically homogenous than elsewhere in provincial urban Russia.

  7. Article 40.3 (www.russianembassy.org/russia/constit/chapter2.htm).

  8. FOM, ‘Privatizatsia: kak eto bylo i k chemu privelo?’, 20 January 2005 (bd.fom.ru/report/map/dd050322).

  9. Urban Institute. ‘Urban insitute, Fannie Mae will advise Russian government as it sets up secondary mortgage facility to increase home mortgage lending,’ 13 March 1997 (www.urban.org/url.cfm?ID=900110); ‘Low salaries endanger housing goal.’ The Moscow Times, 9 October 2007.

  10. www.levada.ru/press/2006032801.html.

  11. As of the third quarter of 2007, a modest-sized unit (54 m2) would cost the average family over 5 years of their total income — an increase from 4 years in 2005. While this figure is comparatively moderate, limited access to credit makes housing purchase unrealistic for most families. According to the Index of Access to Housing Credit, the average Russian household only had 61% of the income necessary to attain a mortgage to purchase a modest home. Estimates of the percentage of families that could actually afford to purchase a home using a mortgage hovered from 10 to 15% in 2007 (Kosareva and Tumanov, 2007); ‘Zhilishchnaia problema v Rossii: razreshitia eshche ne skoro; IA Atmosphera, 18 September 2007.

  12. VTSIOM survey August 2007; FOM survey November 2007.

  13. A recent review article on legitimacy came to the same conclusion: ‘Russian society has not rejected high social expections of government given the extremely high lack of confidence in its actions’ (Reutov, 2006).

  14. ‘Current mortgage crisis in west won't affect Russian banking,’ Interfax, 19 October 2007.

  15. ‘Russia stung by US mortgage crisis,’ What the Papers Say, 26 May 2008.

  16. www.levada.ru/press/2005070101.html.

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  1. Department of Sociology, University of Arizona, Social Science Bldg Room 400, Tucson, 85721, AZ, USA

    Jane Zavisca

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Zavisca, J. Property without Markets: Housing Policy and Politics in Post-Soviet Russia, 1992–2007. Comp Eur Polit 6, 365–386 (2008). https://doi.org/10.1057/cep.2008.16

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