Chapter IV

INSTITUTIONAL FRAMEWORK ______

Introduction financial resources through taxation, especially through the federal distribution of taxes, which During the drafting of this chapter the institutional are collected locally and distributed among the framework of the Russian Federation’s housing three levels of government either in accordance sector underwent some major changes, in with rules laid down by legislation or regulated particular with regard to the institutional through negotiations. The federal Government has responsibilities of the federal Government. The also created a system of tariffs for housing and analysis in this chapter is based primarily on the utility services that are to be followed by local institutional set-up as it existed until March 2004, authorities when charging households for the but will also give an account of the changes relevant services. effected since then. The key federal institution for the housing sector

until March 2004 was the State Committee for A. Institutions involved in housing policy Construction, Housing and Municipal Economy implementation (Gosstroy). Since 9 March 2004, it has been the

Federal Agency ”Gosstroy” under the Ministry of There are three levels of government in the Industry and Energy. The Federal Agency has Russian Federation, each its own with executive authority for inter-industrial regulation competencies. in construction, architecture, urban planning, housing policy and public housing. Federal institutions The responsibilities of the State Committee for The federal institutions are responsible for the Construction, Housing and Municipal Economy State’s unity and Constitution, its sovereignty and were complex, covering all major aspects of territorial integrity. State power is exercised by planning and construction, but also of the built the President, the Federal Assembly (the environment. Federation Council and the ), the federal Government and the federal courts. The State Committee had about 450 full-time specialists employed in the head office. In The State Duma does not have a separate housing addition, it had under its authority a system of committee. Its key housing-related units are the about 52,000 organizations all over the country Committee on Industry, Construction and and at all levels of government. There were about Technology and the Committee on Civil, 50 institutions for research and development, and Arbitrage and Process Law. Depending on the also about 40 institutions for education and topic, the Committees on Property, on Social training, consultancy and licensing, as well as a Policy, on Economic Policy or on Local Self- specialized State library on construction and government may be involved in the discussions. architecture, a museum of architecture, exhibition halls, etc. The Government of the Russian Federation consists of 14 ministries, 34 federal services and The State Committee was the initiator and the 28 federal agencies (March 2004). Ministries main responsible body for the major housing- develop policy and regulatory documents. Federal related and federally targeted programmes services provide control functions. Federal without, however, having any vertical power on agencies are the real “executive” bodies. The housing issues. The State Committee did not have Government prepares and submits bills for federal the authority to command from top to bottom and legislation and the federal budget to the State support these commands with relevant funding, Duma and ensures implementation of the budget The State Committee’s competence was only by submitting relevant reports. The federal ‘collaborative’ or ‘recommendatory’ in particular Government plays an important role in generating with regard to the heads of regional

44 Country Profiles on the Housing Sector – Russia

administrations. The State Committee established may be organized independently without any the Central Council of State Housing Inspections interference from the higher authorities. However, – a system of inspectorates to monitor locally the this does not mean that the State completely quality of housing construction and utility abstains from regulating their structure and services. To date, State housing inspectorates competence. The Constitution recognizes and have been created by 82 regional administrations guarantees their rights, but also establishes some (“subjects of the Federation”), but only 40 of them basic responsibilities for them. Currently, there are administratively independent. The others are are 13,383 local self-governments, of which about still part of the local housing management 1,300 are urban. structures. The national housing reform generally aims to devolve the major responsibility for Local authorities are the main executive agencies implementing federal housing policy from the that provide housing and utility services. About federal to the lower levels of government. 8,500 municipalities have their own housing stock

and are thus responsible for its management and The changes in government structure effected in maintenance. The major competencies of the March 2004 were still evolving at the time of municipalities in housing are: finalizing this study. It was therefore not possible here to say with certainty what the new institutional set-up would look like or to judge • Administering, maintaining and operating what impact this would have on housing policy municipal housing and non-residential design. premises; • Planning and developing the municipal Regional institutions territories; • Creating the conditions for developing Executive power in most regions is exercised dwellings and buildings of public personally by the highest elected official called importance; head of administration, , president or • Organizing, administering and developing sometimes chairman of the government. The the municipal electricity, gas, heating, structure and the role of the regional governments water and sewage utility companies; are similar to those of the federal level in • Providing heating fuel to residents and particular with regard to the distribution of municipal institutions (oil, coal, timber, resources and the execution of power. The etc.); competence of the regional governments includes • Building and maintaining municipal duties that cannot be performed by municipal roads; governments, such as developing infrastructure, but also regional housing programmes. The • Operating emergency fire services. regional government approves the budget proposals of the municipalities, which in the case In the foreseeable future municipalities are of new public housing construction is broken expected to continue to play a predominant role in down into every single project. In many cases housing. They are the major bodies for operating different ministries (or committees or and maintaining the housing stock, and for departments) deal with construction and housing providing the most important utilities through within the regional governments. their local service companies. Although municipalities allocate about 40-60% of their Local self-government institutions annual budgets to housing, their financial and operational autonomy in housing is quite limited. Local self-governments, which are the municipal They do receive considerable support from the entities, represent a rather new component in the budgets of higher levels. country’s power structure. According to the 1993 Constitution, their institutions are not institutions of State power and should act independently and The federal legislation and institutional guidelines be answerable to the local population. The tightly regulate the major processes in housing. underlying idea is that the local self-governments The federal authorities set the legal framework

Institutional Framework 45 ______and decide on housing reform. Each municipality • Professional associations and trade has to implement the housing reform locally. The unions; law gives local self-governments the authority to • Federations of commercial companies determine the most suitable administrative acting on the housing market; structure for managing their local housing and • Associations of municipalities; utility service provisions within the budgetary • Research and educational organizations; limits and the targets set. • Housing movements; • Homeowners’ associations. Within the administrative structure of the local self-governments, the city council typically sets Professional and commercial associations the housing management guidelines for the local government administration, where the deputy Housing-related professional associations and head – due to the importance of housing for the trade unions unite specialists to defend their local policy and budget – is quite commonly professional rights, as well as to influence the responsible for housing matters. The sphere of their professional activity – housing administration has to cover three major issues: policy, architecture and design, land administration, and real-estate transactions. Some • Developing new public housing and examples with long traditions are: the Russian public buildings, incl. major repair of National Urban Society, the Union of Architects existing buildings; of Russia, the Union of Designers of Russia and • Management and maintenance of the the Russian Society of Civil Engineers. Among existing housing stock, and administering the trade unions, the Trade Union of Workers of the waiting lists; Local Industry and Municipal Enterprises should • Providing utility services for the city (e.g. be mentioned. electricity, water, sewage, heating, etc.) and managing and maintaining public As the housing market has become commercial, facilities on the territory of the the companies involved in it are interested in municipality (schools, saunas, public protecting their business interests and creating fair buildings, etc.). rules for business. The Builders of Russia Union (founded in 1990) incorporates over 360 Municipalities also have departments of organizations from nearly every region of the architecture, land committees; so-called bureaux Russian Federation. At the same time there are of technical inventory and sometimes also also about 25 associations, unions and societies branches of the State housing inspectorate. for construction companies working locally in the different regions of the country. These institutions B. Civil society are active not only in developing the issues that are directly related to the construction sector, but It is vital for households to get information and they have also been involved in tackling advice on access to the services that they require customers’ debts, mortgage lending, organizing to meet their housing needs. There should be help tenders and contracting, and issues related to desks and advisers to answer residents’ questions licensing. The National Union of Housing and about their homes, but also to advertise other Municipal Enterprises, the Russian Guild of sources of information. At present NGOs play a Realtors, the Russian Society of Appraisers, the predominant role in raising awareness about Association of Russian Banks and the Association housing issues and about the roles of different of Mortgage Banks pursue similar aims. institutions. Associations of municipalities Due to the enormous size of the country, the list of its non-governmental housing-related It is important for the country’s federal structure institutions can never be exhaustive, but based on that local self-governments can promote and their mission and membership they may be classified into six major groups:

46 Country Profiles on the Housing Sector – Russia

protect their joint interests both federally and training centres for professionals and more than regionally. Consequently, municipal entities have 500 schools for skilled workers. Most of these created organizations that operate throughout the educational institutions are publicly run. country, within a single region or within several State University of Civil Engineering, founded in regions that share economic interests. Most of 1921, is the leader in civil engineering and built these organizations are fairly new and they all environment. There is also the Moscow Institute suffer from limited financial and professional for Advanced Professional Training in the resources. Housing and Municipal Economy. Specialized higher educational institutions in all the larger The most important of the national level cities and in the regions provide education for organizations are: engineering, real-estate issues and public management. • The Union of Russian Cities: established in 1991; incorporates the 90 biggest cities, There are no public educational institutions mainly regional capitals (excluding specialized in condominium management. Moscow and St Petersburg); However, during the past two or three years • The Union of Small Towns of Russia: several training centres in Moscow, Novosibirsk, established in 1991; membership consists Novgorod, Khabarovsk, Ulan-Ude, etc. have of the heads of administration of the cities started new condominium management training with fewer than 200,000 inhabitants; schemes supported by Western donors, especially the United States Agency for International • The Association of Siberian and Far- Development (USAID). Some housing NGOs also Eastern Cities. provide training in this field – e.g. the Housing Chamber of Moscow, ‘Domouprav’, the Institute To merge the efforts of local self-governments, 52 of the Non-governmental Sector in Novosibirsk, of their unions founded a nationwide association, but also in other cities. the Congress of Municipal Entities of the Russian Federation, which was registered in 1998. Today the Congress is the most important national One of the major media outlets for professionals association for Russian local authorities and is is the monthly ZKH (Housing and Municipal seen as the key actor in their future developments. Economy), which has been published by Gosstroy Only the regional associations or unions of local since 1998. Each monthly edition consists of two governments, not the local authorities themselves, volumes, one with discussion papers and are members of the Congress. The Congress has a advertising, and another with official documents special standing commission to promote housing and reviews. and municipal reform and it organizes discussions, conferences, training courses and Moscow’s weekly housing bulletin Chain of exhibitions in close cooperation with many Apartments is hugely popular. Though officially a research institutes and private and municipal Moscow-based paper, it highlights the major utilities and maintenance companies. A major housing problems in the country and has sections discussion forum with some 300 participants for official documents, housing reform, about best practices in local government housing homeowners’ associations, etc. Its Web edition is reform took place in spring 2003. also widely read.

Research/ educational institutions and organizations for public information One of the best well known research bodies is the Institute for Urban Economics created in 1995. Its Housing has become a professional field of main goals are to develop and introduce new activities requiring research and development, but approaches to housing problems. Some of its most also training. Those who want to be educated in important activities are : built-environment-related professions can choose amongst more than 100 universities and colleges • Research into the social and economic for higher education, some 300 specialized problems of urban areas;

Institutional Framework 47 ______

• Contribute to the drafting of legal and Housing movements regulatory documents on housing reform; Housing movements represent and defend the • Assisting to the preparation of strategic rights of different social groups in the housing concepts, practical approaches and sphere. In the Russian Federation, housing implementation schemes for pilot movements are a new social phenomenon, programmes to reform the urban reflecting the dramatic and rapid changes in the economy; country’s social, economic and political climate. • Providing methodological and technical The first officially recognized Soviet assistance to different institutions for neighborhood organizations resembling grass- drawing up and implementing urban roots community groups were called ‘committees economy programmes; of social self-management’. They appeared in Moscow in 1988. Their activities included direct • Training government officials, staff of social assistance and the distribution of Western banks and private companies; humanitarian aid, greater control over the actions • Disseminating experience and of local authorities and over the delivery of recommendations through the media and services in the neighbourhood, representation of publications. local interests at municipal agencies, defence of citizens’ rights in relation to housing, and Its ‘Transition to Smart Growth: Improved Local organizing collective voluntary work to improve Governance and Economic Development’ living conditions. programme aims to: In the new social and political climate, different • Strengthen local self-government in the housing problems are superimposed on the old Russian Federation; housing concerns mainly related to poor services. A lack of information, coupled with uncertainty, • Strengthen local government capacity to has contributed to the mushrooming of different develop and manage municipal resources; movements highlighting particular housing • Encourage local governments to operate problems. For example, in recent years, some 20 in a sustained partnership with their local community groups and hundreds of other communities; grass-roots groups have been created in Moscow alone. They have been strongly involved in • Increase the policy development skills of different community activities, including the local and national officials and defence of housing rights of different social community leaders. groups, such as people with poor housing conditions, the homeless, applicants for free Two other institutions in this category should be municipal flats, members of housing cooperatives, mentioned: etc. These activities have changed their character from protest organizations to real movements • The Leontief Centre (St Petersburg) is an attempting to work constructively in cooperation international centre for social and with the authorities on different levels. economic research; and Given the country’s size and diversity, different • The EUROGRAD Institute (St regions may have completely different problems Petersburg) aims to provide wide to tackle. Therefore, not all movements that are theoretical and practical assistance to crucial to some have a central body on the local authorities in an effort to foster the national level. Table 14 includes only a small potential development of their towns and selection of movements with very different to implement municipal reforms. backgrounds.

48 Country Profiles on the Housing Sector – Russia

Table 14. Housing movements

Movement Activities Forum of Migrants • Provides support to migrants returning to the Russian Federation and to homeless people. • Is the largest of its kind. • Has representatives in 53 regions. • Provides publications, advice and training.

National Forum for • Advocates partnerships in housing. Affordable and Decent • Experts provide consultancy throughout the country on Housing, founded in housing finance, residents' self-management, collaboration with 1991. maintenance companies, defense of housing rights. Umbrella organization for inexperienced, but active housing partnerships in Moscow. Provides training courses and high-quality publications about housing. Inter-regional Union of • Developed a wide network of associations of flat owners in Tenants and Flat many Russian cities. Actively resists housing and utility service Owners, registered in monopolies. 2002 (former Union of • Raises awareness about the problems in the housing sector Owners of Flats in through seminars and workshops. Municipal, Cooperative and Industrial Housing Stock, created in 1994) Public Council on • Created with the support of the Moscow City Duma. Housing Policy, set up • Part of a representing body housing NGOs in Moscow. in 1994 • Has great public influence as its activities are supported by several housing-related professionals. Nochlyezhka (Night • Charitable foundation to help the homeless. Shelter) in St Petersburg • Provides consultancy and surveys. • Supplies food for people in need. Russian Union of Youth • Forum for discussing the housing problems of youth and Housing Cooperatives young families. • Has been active for about 30 years. • Has several policy makers as active members. • Initiators of the special housing programme for young families in the Russian Federation.

Source: The Russian Statistical Annual Edition 2003, Goskomstat, p. 201.

Institutional Framework 49 ______

In recent years, several housing committees, and Its three most important project areas are the “staircase” councils have been formed in environment, governance, and sustainable municipally managed apartment blocks due to the livelihoods and economic development. All are fear of terrorism, vandalism and concern about the contributing to developing human capabilities and deterioration of common areas. These voluntary improving the standard of living. organizations are good examples of residents – either owner-occupiers or tenants in municipal USAID has operated in the Russian Federation flats –joining forces to tackle common problems. since 1992. USAID/Russia’s goal has been These housing committees include a great variety to support the establishment of a market- of voluntary associations, partly inherited from oriented and socially responsible democracy the Soviet period but adjusted to today’s realities, through the adoption and use of democratic and partly created as a reaction to radical changes norms. Of special concern have been the in housing policy, social structure and tenure activities related to local governance, focusing structure. on improving the responsiveness of local governments. The immediate motivation was the series of bomb blasts in several apartment buildings in Russian cities in the autumn of 1999. It became clear that The World Bank is one of the Russian the common spaces of the shared buildings and Federation’s largest sources of development the yards were ownerless. On the local level (‘one assistance. About 70 projects are either currently block, one house’), staircase associations and running or have recently ended. These housing committees, but also street, micro-region projects have targeted different aspects of and community self-management committees energy saving or building renovation – thus have been formed to improve the quality of either directly or indirectly improving living housing maintenance and living conditions. conditions.

Homeowners’ associations UN-Habitat Executive Bureau in Moscow has been active through a number of projects With the transfer of ownership title to a large such as the round table for assuring the number of tenants, new forms of organization for sustainable development of Russian cities in the privatized property became necessary, as the 2002. It has also run projects in different new owners had to take over the management and regions to raise public awareness about maintenance of the housing stock. Housing reform sustainable development. policies foresee an increasing role for homeowners’ association. They are expected to be The international organizations active in the the main institutional form of housing Russian Federation do not, as a general rule, organization and management for privatized provide direct help to municipalities and apartment blocks (for further information on households for individual housing improvement homeowners’ and condominium associations, see projects. Their projects are targeted more at chapter VII.). generating a suitable environment where the responsible institutions and actors can C. International organizations implement their housing strategies. The international organizations also aim at The United Nations Development Programme has providing education, training and know-how. been active in the Russian Federation since 1993.