Housing Affordability in Russia
Given Russia’s public policy of increasing affordable housing, this study estimates its achievements. It highlights future obstacles and argues for modernization. Statistical estimates of housing affordability indicators in Russia generally and in major Russian metropolitan areas specifically show trends of substantial increase for the past 15 years. Although the housing affordability indicators are imperfect measures of actual levels, they are useful for monitoring trends. The affordability indicator trend in Russia differs from similar indicators for other countries. The main influencing factors for growth in housing affordability in Russia include a reduction in real housing prices, which declined faster than per capita real income, and a decrease in mortgage interest rates. Moreover, market housing pricing is influenced by housing supply. Nonetheless, extending the potential of housing affordability through lower interest rates has been largely exhausted, and further housing affordability may be achieved by increasing the stock and tenure types of affordable housing, including affordable renting.
The Russian variant of land readjustment deals with vacant lands inside or just beyond the city border. In 2011, federal law allowed municipal authorities to provide multi-child families with free land plots. The definite size of land plots (between 0.04 – 0.15 hectares/ 0.09 -0.5 acres [5, 7]), their location, and level of infrastructure provision were under the jurisdiction of the local administration. The first implementation experience of the law showed that the land plots provided to the families were poorly located and needed an enormous amount of additional investment into infrastructure, construction of housing, etc. Moreover, the lack of financial resources pushed the families to sell their land plots at low prices; therefore, the objective of the law was not fulfilled. Because of this setback, the Federal Agency of Housing Construction Financing (AHCF) created the program of multi-child cooperatives.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.