Strange course of housing privatisation

January 22, 1992
Issue 

By Irina Glushchenko

MOSCOW — After a phase of fiasco, the Moscow city administration's plan for the privatisation of housing seems to have reached its mature form — rank injustice.

Under an earlier plan, abandoned in late November, residents were encouraged to "buy out" the value of their apartments, above a set minimum of housing space which would be free of charge. Now, the administration has decided to forego all charges for housing privatisation.

So it doesn't matter if your apartment consists of one room in a 1950s "Khrushchev hovel", or five rooms in one of the palaces built to house senior Communist Party officials. If you live in it, you can make it your property — free.

Naturally, there are catches, beyond the injustice of cementing in place the inequalities of the Communist era.

In the original scheme, an area of 18 square metres per person, plus 12 square metres per family, would be free of charge. Prospective owners would pay for housing above this minimum, on a scale that took into account the quality of the building, whether it was in a prestige district and other factors.

But the difficulties turned out to be gargantuan. What criteria should be used to determine the quality of a dwelling, or of a residential district? And the opportunities for corruption among the people charged with assessing apartments were virtually limitless.

Characteristically, Mayor Gavriil Popov turned over the job of processing the applications to private enterprise — to firms set up by former officials of the now disbanded Executive Committee of the Moscow City Soviet.

These firms proceeded to charge some 500 to 700 roubles — well over a month's wages for most Russians — for drawing up the necessary documents.

For vast numbers of Moscow residents, becoming apartment-owners under this scheme was a financial impossibility. The "free minimum" of housing area had been set far too low. Izvestia cited the case of a pensioner receiving 132 roubles a month, and living in a very ordinary one-room apartment, who was handed a bill for privatisation of 11,596 roubles.

Nikolai Gonchar, president of the Moscow Soviet, proposed that all housing should be handed over to residents free of charge, and that a tax on real estate should be introduced.

Gonchar's variant met with strong opposition in the Moscow City Soviet, including from the labour caucus — that is, socialists and other left-wing deputies. The scheme was rejected by a wide margin.

This decision, however, meant nothing. Under a decree issued some "democratic" President Boris Yeltsin, the elected deputies of the Moscow City Soviet have been stripped of virtually all their decision-making powers. These powers were vested in Mayor Popov — who decided that Gonchar's proposals suited him fine.

People who don't want to own the apartment they live in — or who don't have a month's wages to spare for the paperwork — will probably have their rents raised, and additional payments will probably be introduced for living space above the set minimum.

The administration is quite favourable to selling whole apartment buildings to local and foreign firms, particularly in valuable city-centre locations. There are no safeguards for tenants if the new owners hike the rents and issue eviction notices to people who cannot pay.

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