Apartment houses: history and prospects of construction in modern Russia

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Projects for the construction of apartment buildings in Russia, in particular in Moscow, are now actively discussed by some officials who are trying to find an optimal solution to the issue of providing citizens with affordable housing.

In general, rent in middle-class houses ranged from 10 to 100 rubles per month. Elite housing in some apartment buildings cost more than 1,000 rubles a month. That is how much it cost to rent an apartment in the house of Prince Shcherbatov’s mansion, located at Novinsky Boulevard, 11.

For comparison, in 1880 the average wage of a worker in Russia was 30.38 rubles, and in 1913 – 37.5 rubles. And for 10 kopecks you could drink a glass of vodka or eat a pie.

The era of prosperity of apartment buildings in Russia ended at the beginning of the 20th century with the coming to power of the Bolsheviks. After the October Revolution in 1917, tenement houses lost their status due to the nationalization of the housing stock.

Apartment buildings in modern Russia on the example of Moscow and St. Petersburg

Moscow apartment buildings of the XXI century

The idea of ​​reviving apartment buildings began to sound from the mouth of the capital’s authorities back in 1999. But the implementation of this project at that time was seriously hampered by the existing law on housing policy, which allowed tenants of apartments in apartment buildings to privatize housing.

After a number of bills were adopted that prohibited such privatization, the first apartment building was built in the city at 10 Bolshoy Nikolovorobinsky Lane. in operation in 2003.

The cost of the DIPS apartment building project was $ 12.3 million. This house still exists today and has become a fairly successful project. Note that renting an apartment here is quite expensive – from 2.5 thousand to 12 thousand dollars.

However, in spite of the fact that the apartment building of DIPS turned out to be in great demand (it is currently populated by 98%, and the rest of the apartments are regularly rented for a short period), the experiment of the Moscow authorities has not yet been continued. The fact is that the authorities have to compete for clients with the private sector, which in the capital accounts for the lion’s share of apartments for rent. In addition, managing a large house is also not easy and expensive..

For these reasons, at present in Moscow, in addition to the apartment building in Bolshoy Nikolovorobinsky Lane, only 1 full-fledged project was launched, which was built by a commercial company.

At the end of 2007, the Barkley corporation built the first elite apartment building in the capital? “Barkli Plaza”, which is located on Prechistinskaya embankment – in the most expensive area of ​​Moscow.

Moscow apartment buildings
Nesterov Vasily. Prechistinka. 2010

The residential complex includes 5 separate buildings, the height of which ranges from 5 to 7 floors. A modern class A business center is located on the first floors of the Barkley Plaza, while the rest – luxury apartments intended for rent. Prices confirm the exclusive status of housing: for an apartment of 75 sq. m with one bedroom will have to pay from 10 thousand dollars a month, and for penthouses and five-room apartments over 255 sq. m – from 32 thousand dollars per month.?

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?Apartment buildings in St. Petersburg

?The first apartment building in modern St. Petersburg was created by a Finnish investment pension fund, which bought out part of the house on Kolomyazhsky Prospekt.

The Finns are interested in this sector of the real estate market because it is practically absent in Russia, in St. Petersburg in particular. Therefore, investors expect to receive a decent income, based on the fact that with the existing housing shortage, apartments in their apartment building will be in demand.

It should also be noted that another Finnish company, which has about 23 thousand similar houses in its homeland, also plans to start building apartment buildings in St. Petersburg..

The Finnish company owns 276 apartments at 15 Kolomyazhsky prospect, from 1 to 3 rooms, which are rented to tenants for a period of 11 months with the possibility of renewing the lease. According to this agreement, tenants are prohibited from remodeling the apartment or repainting the walls. Even in order to drill a small hole in the wall, for example, to hang a clock or a picture, residents will have to contact the maintenance service of the apartment building. Finnish landlords explain such strict rules of residence by the fact that all their apartments are made in the same style, which cannot be violated.

The cost of rent in the only St. Petersburg apartment building depends on both the area of ​​the apartment and the floor (according to European standards, the higher the floor, the more expensive the apartment is). For a 1-room apartment with an area of ​​about 37 sq. m will have to pay 18 thousand rubles a month. For a 3-room apartment – from 41 thousand rubles per month.

World experience

In the west, for a very long time, the construction and maintenance of apartment buildings is a profitable and successful business that provides the owners of such houses with a stable income at the level of 10-12% per annum.

In large European cities, the share of apartment buildings currently accounts for up to 30% of the urban residential real estate market. Many young families find it more profitable to rent an apartment, rather than buy housing, even with the use of mortgage lending.

Note that according to the International Union of Tenants, now in the countries of Eastern Europe, which recently entered the EU, about 40% of the population rent housing. In “old” Europe, the figures are higher: for example, in Holland and Germany – 50%, in Switzerland – 70%.

Apartment buildings in Europe
Marcia Baldwin. Holland row houses

If we take individual European cities, then in some the overwhelming majority of the population lives in apartment buildings. For example, in Berlin, according to statistics, 90% of tenants, and in Stockholm – 100% (the fact is that in Sweden the privatization of apartments is prohibited – as a result, in the whole country, only about 10% of the housing stock is privately owned).

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As for the United States, here the largest part of the housing stock is private houses. And only 30% of real estate is rented. However, this does not apply to large cities. In large cities, there is a large fund of apartment buildings intended for rent. For example, in San Francisco, 65% of the housing stock is rented, and in New York – 70%. In Canadian Montreal, about 50% of the population lives in rented apartments.

Apartment houses in Europe and the USA are a common and widespread type of business that brings tangible income.

At the same time, there is also the so-called social housing. This type includes apartment buildings that are owned by private investors, but the state, within the framework of certain social programs, compensates apartment owners for the difference between the market and social rental prices..

The fact that this is social housing does not mean at all that the houses are located in poor areas or that living conditions there are poor. Houses can be located in very decent areas, but they still look inexpensive and cannot boast of expensive finishes. But in general, living conditions are decent. These are the apartments that are most popular among students and people with an average income..

Revival of the construction of apartment buildings within the framework of the capital’s program “Housing”

The Moscow government is trying to find a solution to the housing shortage in Moscow. The authorities have repeatedly raised the issue of implementing a program for the construction of apartment buildings in the city that could help in solving this issue. But the matter has not yet reached practical implementation. However, the Moscow government recently approved the Housing program, developed for the period 2012-2016, in which officials provided for the revival of apartment buildings in Moscow. ?? Within the framework of this program, houses of two types will be built:

  • non-subsidized, the construction of which is provided for by the city budget;
  • profitable, which will be built at the expense of private investors.

The government is currently working on measures to help attract domestic businesses to participate in this program. Many experts believe that such a program should have been adopted long ago. In their opinion, Russia now has all the prerequisites for creating a civilized rental housing market. At present, the domestic rental market is in complete chaos. Few of the owners formalize relations with tenants officially, which sometimes leads to serious problems for both the owner and the tenant.

The construction of apartment buildings will allow to increase not only the number of apartments available to the population, but also improve the quality of the services offered. Citizens will be able to rent an apartment not from private traders, but from an organization. Let an apartment in an apartment building cost a little more, but the tenant will be guaranteed normal living conditions, a full range of housing maintenance services, as well as an official agreement establishing the rights and responsibilities of the parties.

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??Prospects for apartment buildings on the Russian real estate market

As we have already noted above, the market of apartment buildings has been functioning abroad for a long time and this type of housing there is quite familiar to the population. In the west, there is also a legal framework necessary for the efficient operation of apartment buildings..

In modern Russia, in contrast to Western countries, the construction of apartment buildings has not yet become widespread due to their low profitability. Russian investors consider an acceptable yield at the level of 7-10%, which is twice the existing one on the market, and 4% of profit is considered normal for Europe. ?? In addition, in our country today the very concept of “apartment building” in the legislation is absent, therefore, there is no legal regulation of relations in this sector of the real estate market.

For the successful implementation of projects of apartment buildings and the further development of this direction in Russia, it is necessary to secure the status of an apartment building at the legislative level.

It is also necessary to develop a system of interaction between investors and the state. Experts note that the state should develop measures to stimulate business, as well as provide certain guarantees and protection against the bad faith of some participants..

?Among the measures of state incentives that will help achieve the effective development of this area in the rental real estate market, one can single out:

  • ensuring a priority order of consideration by the authorities of issues related to the construction of apartment buildings;
  • holding tenders where land plots will be offered for rent for the construction of tenement houses;
  • the introduction of a preferential rental rate for land plots provided for the construction of an apartment building on them for the period of its construction, as well as for a certain period after the commissioning of an apartment building, etc..

Certain conditions may be used as state guarantees that will be mandatory during the auction, for example:

  • land plots put up for auction should combine plots for the construction of apartment buildings and economy and business class;
  • land plots are put up for auction only on the condition that the developer (investor) will be obliged to provide a certain share of the total number of apartments in the apartment building for rent to certain categories of citizens by the state. This will help implement a social housing program similar to the Western one, when the state will compensate the investor for part of the rent provided to socially unprotected (poor) segments of the population.

It should also be noted that the construction of apartment buildings can be effectively used not only in the capital, but also in the regions. Even more favorable conditions for their construction are noted here: a less cumbersome bureaucratic apparatus and a greater number of free areas suitable for building.

In conclusion, I would like to say that the construction of apartment buildings is a promising direction for Russia. However, in order for this sector to have the opportunity to actively develop, at this stage, first of all, state support is needed..

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