OREANDA-NEWS.  February 15, 2012. The meeting discussed, in particular, further increase of housing construction volumes, ways to improve mortgage lending system, development of rentals institution, implementation of programmes to provide housing to veterans, servicemen and large families.

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PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Colleagues,

Today, our meeting is devoted to issues of housing provision, a topic that always requires attention. Let me mention that last year the new housing commissioning nearly reached pre-crisis level, which certainly is a good indicator. The number of families that can afford to acquire new housing increased nearly 2.5-fold in the last five to six years.

The contributing factors included our efforts, as well as the launch of new development institutions, namely the Housing and Utilities Reform Facilitation Fund, the Federal Housing Construction Fund, and the Agency for Home Mortgage Lending. All these institutions, in one way or another, also operated within the framework of the Housing National Project [the Affordable and Comfortable Housing for Russian People priority national project], which we also worked on. In essence, it has not wound down and continues, even though it should probably have some new implementation mechanisms.

As you know, we took targeted actions to help various social groups in need. I think it was absolutely justified, especially in the case of Great Patriotic War veterans, of whom 52,000 were offered better housing last year alone, while this year we must certainly fully resolve the problem [of housing for veterans].

About 200,000 military servicemen have taken advantage of special mortgage mechanisms, and one quarter of them have already moved into new apartments. The process should continue. No doubt, these mechanisms must be further improved and the overall challenge of providing housing to servicemen must be continuously addressed on the basis of the achievements made over the recent years.

It is now possible to use the maternity capital to pay off mortgages taken out earlier. This mechanism turned out to be in high demand; people liked it and used it. Last year, 324,000 families took advantage of this opportunity which is a rather significant figure.

In other words, we have done quite a lot, but in spite of all accomplishments, the problem of housing remains extremely pressing for a large proportion of our people who find it quite difficult to resolve, while for rather many families it is nearly unmanageable.

About 60 percent of the population is unhappy with their housing conditions. When I looked over the memo this morning, I thought that in other countries the figure would be about the same. It is rare to find a nation where people will say that they are happy with their housing conditions and they do not need anything more. However, the particular threshold or level of housing provision in Russia is a separate matter, since the demands of our people in this regard are significantly more modest than those in certain other developed economies. Thus, housing policy must be significantly more effective and we essentially have all the necessary conditions for this.

Let’s talk about another matter. At the end of November 2011 in Yakutsk I gave a number of instructions on offering a mortgage schemes for state sector employees such as doctors, teachers, engineers. Of course, there should be decision on the ways to improve draft legislation eliminating unfairness in the provision of housing to large families that were already granted land for private construction. They should not in any way be excluded from housing waitlists, which is what sometimes happens.

Moreover, we have already discussed the topic of how to help large families build their homes on the land they received. It is imperative to continue this work as well. We must encourage our people to unite into cooperatives for developing utility infrastructure. All instructions on this matter have already been issued, but nevertheless, their implementation is far from perfect. We have some governors here today, and they will probably describe their approaches to the subject. In any case, it is unacceptable when these large families are offered land out in the nowhere.

But we have positive examples as well, so it would be useful to hear about them.

I suggest we prioritize several other issues as key areas for further efforts.

First of all, it is imperative to increase the overall volume of low-cost housing construction. We discussed this many times, but the problem still persists and is still an issue in nearly every region.

We must reduce the duration and cost of construction. According to some data, before construction of an apartment building begins, in many regions (not all, of course), developers have to go through about 100 procedures and spend around three years on these processes, as well as approximately 25 million rubles [\\$800,000]. Again, it doesn’t happen this way everywhere, but in some places, that’s exactly the way it is. This is a very bad situation. Let’s discuss solutions for this problem, especially since some of you have had good experiences with it.

Second, we must implement modern technologies and environmentally-friendly materials in housing construction. We have been talking about this since the start of the priority national project on housing. To succeed, we will need additional measures, such as encouraging developers to erect inexpensive but high-quality housing.

Today, the situation is already somewhat different than it was five to seven years ago, when it was very difficult to explain to people what these so-called new materials were; they were only familiar with wood and brick. Today, the situation is different, but we must still consider creating additional incentives, including for the use of modern technologies and environmentally-friendly materials. In any case, we must use budgetary funding to build only that type of housing, rather than luxury housing. Thus, I expect your speeches to also be geared toward this topic.

For those who are unable to buy an apartment or house on the real estate market – and that includes the majority of our people – we must create new housing options, particularly the institution of rental housing. This is another topic we have discussed many times, but the situation remains practically unchanged. Housing rental is quite wide spread abroad, and is a good solution for many categories of people, particularly youth.

The formation of a new non-profit housing sector will require additional legislative regulation, as well as significant budgetary support. The Cabinet must work on this matter. But I will note that the monthly rent price must be reasonable. We understand how much our citizens are capable of paying (but this will vary depending on the particular location; clearly, the rents in Moscow will always be different from a provincial town). Nonetheless, we should think about how to regulate the corresponding rent payments as well.

Incidentally, here in Russia, nearly three quarters of households own their own homes, whereas in other nations, this figure is significantly lower. That is precisely because the institution of rental housing is not well-developed here.

So what else do we need? We need new housing standards that include high quality of reliability of utilities, telephone lines and Internet. Clearly, those who are currently acquiring new housing want more than merely some kind of roof over their heads; they want normal, modern housing, maybe not even great in size. Thus, the housing itself, as well as corresponding infrastructure, must include well-developed social and residential services and must be generally attractive.

Mass land improvements, planting green areas in cities and towns will always be priorities for local governments and their responsibility. Thus, implementing these kinds of priorities requires the coordination of regional and municipal plans for housing construction, demographic forecasts, strategic documents, and socioeconomic planning. In any case, this will allow us to design a more balanced housing policy.