07:37 GMT +324 February 2018
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    KRISTENKO SUPPORTS AMENDING FEDERAL HOUSING PROGRAM

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    MOSCOW, May 13 (RIA Novosti) - At a session of government on Thursday, Viktor Khristenko, the acting industry and energy minister, said that the federal specific housing program needed to be corrected.

    He reminded the audience that the housing program had been scheduled for 2002-2010. In the past three years, the housing situation in Russia had not improved, Mr. Khristenko admitted. According to him, that was a preliminary period and the main stage of the program, both in content and finances, will begin in 2005.

    For this reason, the acting minister said that amendments to the program regarding the delimitation of power between the levels of the authority and the current administrative reform needed to be made.

    Mr. Khristenko said that after a decrease in the size of the housing market at the beginning of the 1990s, it has increased since 2000. In 2001, the housing market grew by 2.7%, in 2002 it grew by 8.3% and in 2003 it grew by 10%.

    At the same time, from 2000 to 2003, the prices of the housing on the primary market rose by 50%, and the prices of housing on the secondary market grew by 70%, the acting minister said.

    One of the causes of the growing housing prices, according to Mr. Khristenko, is the state's decreased participation in housing construction. "At the end of the 80s," he said, "the state's capital investments in the construction of housing amounted to 86%, but when the economic situation in the country changed in the 90s, the situation in the housing sphere changed for the worse. However, in 2003, 20% of houses were built with money allocated from the budget."

    However, the state has managed to preserve the construction complex, which has all of the prerequisites for speeding up the construction of housing, the production of building materials, etc., he added. The acting minister said that in the next few years the amount of the housing construction in Russia would increase by 15%-20%. By 2010, according to Mr. Khristenko, the construction complex will be able to build 70-80 million square meters of housing.

    "The housing market is developing very slowly and very contradictorily," the acting minister said. A number factors hinder its development, including high administrative barriers to purchase plots of land and get permits for construction, the lack of land available, large expenditures on the disbursement of mortgage loans and high credit rates.

    "The high prices of housing are also to be explained by the small amount of housing being rented," Mr. Khristenko said. He also said that the slow development of the housing market was because the majority of the population had small salaries and that there were no credit histories.

    "In order to substantially increase the amount of houses being constructed, the legal basis that regulates this sphere needs to be changed first," he said.

    He also said that conditions are gradually being created for the development of the housing market in the country. For instance, a mortgage lending system has been created, and the population's income has gradually started to increase, he said.

    "Last year only 5% of houses were sold with mortgages," the acting minister said. At the same time, only 10% of the population has enough money to buy housing on credit.

    The government hopes that the adoption of laws on housing construction will make it possible to reduce the amount of time people waiting for the housing by a third. "The measures being taken will make it possible to reduce the existing waiting time for housing from 15-20 years to 5-7 years," Mr. Khristenko said.

    According to him, the adoption of the bills will also allow the size of the average housing to increase from 19.7 to 21.7 square meters per person.

    According to the government's estimates, the amount of credit given for housing will increase by 30 times by 2010: from 10.5 billion rubles in 2003 to 350 billion rubles (approximately 10 billion euros) in 2010.

    Mr. Khristenko also noted that the government's measures would increase amount of rental property added from 36 million square meters a year to 70-80 million square meters a year.

    At its Thursday session, the government considered nearly 30 draft laws aimed at the development of the housing market in Russia. The laws include the Housing Code, the draft law on housing accumulation cooperatives, amendments to the Civil Code connected with lowering the risks in mortgage lending and amendments to current legislation aimed at protecting the rights of the citizens during housing construction. These amendments, in particular, require information about the builders to be made available.

    According to Mr. Khristenko, there are no differences in principles with regard to eight bills only some comments about them. The government will finalize the other 19 draft laws in about three months.

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