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A Modern City Must Contribute to Human Development

Nadezhda Kosareva, IUE President, speaks on the specificities of urban development in Russia, the new urbanistic trends and territorial competition in post-industrial era

The Institute for Urban Economics: the organization’s profile

The IUE was founded in 1995. It was established as an independent organization not associated with the state or some other structures. Its six founders were individuals with expertise in various aspects of urban development. According to the internationally accepted classification for institutions the IUE might correspond to a “think tank” – an independent research institute engaged in formulating proposals and recommendations on various areas on social and economic development.

Our focus is on the urban economics and the development of Russia’s cities. Among the IUE’s traditional activities are the issues related to housing and utilities sector, urban development regulation, housing construction, municipal finance, local governance. On the whole, up to 90 percent of our research covers the issues of urban development.

To be more specific about the IUE products we should mention the huge work done in the sphere of Russian legislation, development of proposals on draft laws and other regulatory and legal acts. In this respect, we actively participated in developing Housing Code, Town Planning Code, Land Code, mortgage laws and equity construction laws. Besides, we work a lot at the local level in order to introduce novelties designed to improve the efficiency of municipal governance. Our customers vary. They include state authorities, local governments, private organisations or development institutions. We make efforts at ensuring that the novelties in urban governance are getting practically introduced and brought to the municipal level.

And, finally, we give a lot of attention to disseminating knowledge and carrying out training activities. In 2004 we founded the Department of Urban Economics and Municipal Governance at the State University ‘Higher School of Economics’. Along with that, the IUE’s specialists are among the key teaching staff of the Graduate School of Urban Studies - another Department at the University.

What changes occurred in urban and residential development in Russia?

Over the past two decades the urban development and housing policies in Russia have seen very interesting changes. In fact, the country started with shaping basic market institutions in housing sector which entirely relied on the state before the transition to a new economy took place in 1991. There emerged a need for organizing privately financed construction schemes, mortgage lending, procedures for management of multi-unit residential buildings with apartments in private ownership. The system needed to be upgraded to match the new realia. And we had long been dealing with those issues. During the first ten years the formation and introduction of the basic planning and regulation instruments had been taken place. Town Planning Code establishing the new regulations was adopted only in 2004. Municipalities have just adopted their own general plans and land use and development rules (in respect to Moscow, these have been adopted only this year). The issues have yet to be largely improved but, at least, the relevant institutions evolved.

In the past decade, housing construction activities, quite rightly, have been aiming at increasing the construction of residential buildings and also at achieving better housing affordability.

Yet the strong shift towards the foregoing objectives had its distorting consequences in terms of urban development. Almost in all cities new housing construction projects were carried out on undeveloped land plots located in peri-urban areas such as, for example, former agricultural land later rezoned as settlement lands. As a result, we have a situation when cities are densely surrounded by high-rise buildings which only added to urban problems. Specifically, the problem of poor transport access to a workplace which is typically located in central urban area or in the inner city, and, therefore, in the morning huge flows commute in that direction from peri-urban areas and come back in the evening. With the urban spatial structure like this it is very difficult to solve transport problems. Moreover, such areas have uneven access to social infrastructure, utilities and household services. These are mono-functional use zones that serve solely as residential areas.

How does the situation change?

A few years ago we started to realize that were moving in the wrong direction when invested in the development of new areas while the existing residential areas were dilapidating. Capital repairs, renovation, replacement of old buildings with moderns ones, improvement of urban environments has never taken place. In this regard, there emerged a need for a more sustainable development of urban areas comprising, along with development of new areas, rehabilitation of the existing housing stock. Tatyana Polidi, the IUE’s staff member, estimated that the accumulated gap in investment for rehabilitation of housing stock and utilities infrastructure represented 35 percent of the national GDP. Therefore, housing stock and utilities infrastructure, for the most part, are so heavily deteriorated that their performance leaves much to be desired.

Today in the context of urban development and housing policy there has been an awakening on the need for a more sustainable development of urban areas. The modern development standards embraced by advanced foreign cities display the commitment to ensuring more comfortable conditions for urban living and an understanding of the fact that present-day housing means not only a flat or a house but the surrounding environment as well. In this context, housing and urban development policies, at some point, merge into a single concept. Not to mention the fact that they strongly affect socio-economic development of a city as a whole. A post-industrial economy hardly relies on the resource base. It is mobile. Therefore, well-designed and comfortable cities with a capacity for attracting high-quality workforce gain a competitive edge. Rather than being just a place for sleeping and working a city should provide a wide range of opportunities for human development.

Does it mean that the new programme for redevelopment of ‘khrushchevki’ buildings in Moscow is a step in the right direction?

Moscow city authorities estimate that the demolition programme could touch some 25 m sq m, or a tenth of Moscow’s residential housing stock. The houses marked for demolition are located in the developed areas of the inner city.

These are long-established areas with a good transport access, developed infrastructure, and located in the proximity to the workplace. In fact, all former Soviet cities have absolutely artificial urban structure as compared with the cities developed in market environment. The highest housing density should be in the center of a city (where land is the most expensive), while peri-urban areas should be developed less densely. What we have, in fact, is quite the opposite with low housing density in central part of a city and highly densely developed peri-urban areas with growing high-rise housing estates.

As a result, the most valuable land and infrastructure are not used efficiently. Increasing the development density of the inner city, therefore, is a step in the right direction. This does not necessarily mean that denser development requires that high-rise buildings should be erected. In fact, this objective could be achieved via developing more elaborate spatial development plans. For instance, perimeter block development with 8-9-storey buildings might increase the development density 2.5-3 times. So, in terms of town planning perspective I think the programme is sound.

From social point of view the programme is also appropriate. Five-storey buildings with tiny kitchens and connecting rooms are obsolete. Well, it all started with a capital repairs programme. It turned out that demolition of khrushchevki would be a better option [than renovate them] since pipes in those buildings are built into the wall and the underground floor is non-existent. And that means that in order to repair the utility lines in the building it would be necessary to break the walls and also the floor on the ground floor and so on. However, under the renovation programme residents are expected to get the new apartments in modern buildings within their current district. Though equal [to the original apartment] in terms of the number of rooms, the new one, nevertheless, will have larger total useful floor area. Perhaps, some residents would object to their resettling for a variety of reasons. In this respect, as far as I know, there would be a procedure for taking into regard the opinion of the majority living in a building. A part of the newly built apartments will go for sale. This provides an additional opportunity to purchase a dwelling in the inner city and might bring the skyrocketing Moscow prices down a little.

But the devil is usually in the detail. Therefore, each of the foregoing provisions needs careful consideration, not only in terms of detailed elaboration of town planning and social aspects of the programme but also with due regard for financial and economic model for its implementation.

What to do about the obviously leading position of Moscow and the lagging development of other cities?

Development of Russia’s cities actually demonstrates a very uneven pattern. And that is one of the major challenges facing the country. There are strong centripetal tendencies in Russia. In fact, Moscow goes ahead on many parameters – from population growth rates to productivity in terms of gross metropolitan product (GMP). Some 8 percent of the total population lives within the agglomeration boundaries, while GMP makes up 17 percent of GDP. No other city in Russia can demonstrate the ratios like these.

That is the reason why people clearly tend to leave regions for Moscow. In terms of income level, quality of life, variety of employment opportunities even other metropolises cannot compete with Moscow. There is a lack of multiregional urban agglomerations that could offer somewhat comparable conditions. As for medium- and small-size towns the situation appears to be even worse there.

One of the reasons behind the development problems suffered by our cities stems from the fact that many of them emerged as a result of ‘planned economy allocation of resources’ in the Soviet Union. As soon as the mechanisms regulating planned allocation of productive forces and labour forces were abolished, the economy’s structure changed and businesses started to move to cities with a more favorable environment. In the absence of the opportunity to move to another city many people rely on the system of intergovernmental relations and social safety nets for support which only aggravates the situation.

Amid the global urbanization trends and growing labour productivity in urban areas in the 20th century a new factor appeared in the past 10-20 years: a city’s success is not always determined by the number of its residents. There are abounding examples of cities more easily embarking on the path of successful development when faced with the need for [population] reduction. But in our case, in respect to single-industry towns, for instance, much the same policy is adopted though all of them are absolutely different. Given certain modernization of their economies some towns have good prospects for development. Yet, there are also some single-industry towns that require the controlled reduction [of their population] and the support with the resettlement of their residents.

In one of your publications you told that low mobility of the Russian population impedes [the development].

Territorial mobility of the population is of utmost importance to a modern city. Regrettably, we have a very low mobility. In the first place, this is accounted for by high housing costs and almost complete absence of a legal rental market. In addition to economic factors there is a long established attitude of the population. Indeed, the basic principle of the Soviet times was to secure [a place] and keep [others] out. But today the increased mobility is an absolute necessity for urban development, though little attention has been given to the subject as of yet. Of course, this by no means implies that everyone should be resettled to Moscow. But other multi-regional and regional urban agglomerations should be developed. It would be good if other cities could also increase their attractiveness. At the same time, people should have an opportunity to change their place of residence according to their life strategies.

We have some 20 large urban agglomerations (including the largest ones - Moscow and St.-Petersburg). People living in the urban agglomerations make up 33 percent of the total population. There is a global trend when people not necessarily choose to live in a core city because of improving transport interconnection between urban areas within the agglomeration. One may prefer living in a less urbanized and more comfortable environment which, being a part of the agglomeration, allows its residents to enjoy its advantages.

With a rather mobile population the USA has urban areas with heavily varying social structure. What about Russia?

Residential segregation is a crucial issue for the USA where it was recognized 50 years ago. There is a negative trend in American cities: the better-off social groups eventually become segregated at the places of their residence. On the one hand, this posed a threat to the safety of living in cities. Crime-prone areas and ghettoes have emerged. On the other hand, wealthy people who live in expensive residential areas need service personnel – someone who would work in shops, clean streets, help about the house. Having recognized the foregoing problems the USA’s authorities set the task of opposing the territorial and housing segregation and follow it in making town planning decisions. You will be surprised to know that in New Your, even in the borough of Manhattan, there is a special housing affordability programme in place. The city authorities use a variety of instruments in order to ensure that people better off and worse off live in the same city district and even in the same building and, thus, making efforts at smoothing the negative things over.

In this country residential segregation does not yet pose much of a problem. This can be accounted for by the consequences of ‘give-away’ privatization of housing. Not all privatized apartments have been involved in market transactions as of yet, and not everywhere the change of owners has taken place. Eventually, this occurs as people with lower income sell their expensive apartments in central locations and move further away while using the price difference for their needs. These are slow processes that require a closer monitoring and consideration before they develop into a social problem.

How, do you think, will urban space change over the next 20 years?

Twenty years is a very short period of time in terms of urban development. Unless major technological innovations take place, there can hardly be any drastic change in that regard. In the twenty-year perspective Russian cities should follow the main objectives of considerably increasing investment in development of transport and utility infrastructure, redevelopment of built-up areas, capital repairs of residential buildings, and also beautifying urban spaces at least according to the present-day vision. This might include high-quality lighting, storm sewer, accessible environment for people with disabilities and people with limited mobility, easy access to retail, public transport. According to some estimates, in 10 years, there will be no personal transport in some major cities of the world. I don’t believe this could be possible in Russia but the proportion of personal vehicles might well shrink.

Today 70 percent of Russia’s population lives in urban areas (not taking into account townships). We estimate that by 2030 the share will increase up to 75 percent at the most. A part of people will remain in rural areas. Urbanization is a worldwide process. And even in rural areas the productivity of labour grows and people’s lifestyles change. It is just necessary to remember that cities and the processes that develop in them are very sluggish.

The advocates of the new technologies believe that big data analytics will open a window of opportunity for carrying out town planning and housing policies.

Big data technologies provide a remarkable new source of information. They really allow to understand the behavior of people and businesses that cannot be monitored based on general statistics data. One may find out the preferences, routes, interests of local communities, and that will be far more effective than traditional simulation based on statistics and sociological surveys. The knowledge can be used for improving town-planning solutions. For example, A.V. Novikov conducted a study on how office buildings are used in business zones located in urban centers. It is noteworthy that office spaces are occupied only from 9 a.m. to 6 p.m. The rest of the time they stay idle and the huge assets are not used anyhow. In major cities, like London, people start using office spaces for leisure and civil activities in non-working time. It appears that the same territory can be used by different communities: first, by white collars, then by young people, then by someone else. Each group has its own requirements to shaping the environment. Therefore, the important thing is to determine how to take into consideration the opinion of each group. At this stage, big data could be an enormous help.

Of course, new technologies at large, and, specifically, those relating to design and construction, might open up new horizons for urban development. However, today cities must also prepare ground for such discoveries, innovations and creative work.


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