BOFIT Viikkokatsaus / BOFIT Weekly Review 2017/33

At the beginning of August, Moscow mayor Sergei Sobyanin confirmed the list of apartment buildings to be included under an ambitious programme of resettlement and urban renewal. Most buildings on the demolition list are crumbling five-storey Khrushchyovka apartment blocks constructed in the 1950s and 1960s. The residents will be displaced mainly to new apartment buildings constructed under the programme. The massive project, far larger than the resettlement programs of recent years, covers more than 350,000 apartments and total liveable floorspace of over 16 million m2. The programme is planned to be finished by 2032 and Moscow's deputy mayor Marat Khusnullin estimates the total costs of the programme at 3–3.5 trillion rubles (40–50 billion euros).

Some residents in apartment buildings slated for demolition organised protests this spring and summer against the programme on fears they may be getting a raw deal. To pacify their concerns, guarantees about e.g. the location and size of the new apartments have been written into law and the residents have had the possibility to vote on opting out or into the city's apartment building programme.

Moscow's plan is quite large even at the national scale. In recent years, housing built under resettlement programs outside Moscow and St. Petersburg has annually amounted to about 2.5–3 million m2 according to the state corporation for housing and communal services. The corporation estimates that there are still over 650,000 people living in uninhabitable housing outside Moscow.

Looking at the impact on Russian housing construction overall, the Moscow programme would account for about 1 % of annual housing production volume nationally. Housing production increased at a rate of about 8 % a year during 2011–15, but contracted by 6 % in 2016 and 11 % y-o-y in the first half of this year.

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