A while ago, Paula (? - pms) was asking about Russian apartment privatization. Here's a short, informal piece on the subject.
Chris Doss The Russia Journal ---------------------------- This article was published in The Russia Journal ISSUE No.17 (160), DATE: 2002-05-13 ---------------------------------------------------------------------------- ---- Buying an apartment
By ALEXANDER KONDORSKY / The Russia Journal There was no such thing as the sale or purchase of apartments in the Soviet Union. All apartments belonged to the state and was distributed and maintained by it. Unlike dachas, which could be bought and sold, by law apartments could only be exchanged.
There existed a kind of market for exchanging and renting apartments that gave those with money the opportunity to improve their living conditions. For example, one could exchange a one-room apartment in a shabby Khrushchev-era five-story building for a luxurious four-room apartment in a Stalin-era highrise. Of course, such an unequal exchange involved a certain amount of money, handed over unofficially and not reflected in the exchange documents. Although technically the practice was illegal, the authorities turned a blind eye.
Apartments were passed on from parents to children automatically through the "propiska" system of mandatory housing registration. Officially, a family was entitled to submit a petition for improvement of living conditions if it had less than 5 sq. meters of living space per registered tenant. In this case, the family was put on a waiting list for as long as a decade. Alternatively, a family could join a so-called housing-construction cooperative and get a new apartment in two to three years. Co-ops, as they were called back then, were quite costly, starting from 8,000 rubles (about 50 times the average monthly wage) for a one-room apartment. Again, the person who acquired such an apartment was not its owner - he owned only a stake in the co-op.
During Boris Yeltsin's years as president, most Russians' apartments were privatized and they came to own them for free, through the issuance of vouchers. Of course, this was not quite fair: Some people lived in luxurious apartments and some in shabby ones or even in "kommunalky" - apartments shared by several unrelated families.
These days, Russia has a developed real estate market, with more than 1,000 real estate agencies operating in Moscow alone. Finding an apartment to buy or offering yours for sale is no longer a big problem.
The market has opened up many opportunities. My family, for example, chose the option of moving from a downtown apartment to a suburban one. As a result, we significantly improved both our living and financial conditions. Many pensioners choose to make a life-annuity contract with a real-estate agency in exchange for giving up rights to the property.
Mortgage loans are relatively new in Russia. According to the Economic Development and Trade Ministry, 3 million working-age Russians, or 7 percent of that part of the population, can afford to take out a mortgage. Including "gray" incomes would double the number. Mortgages currently are available in principal sums of up to $200,000 at an interest rate of 13 percent to 15 percent in hard currency.
According to available statistics, the average per-capita living space in Russia is 19.3 sq. meters.