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Nadezhda Kosareva - About the need for ‘renaissance’ of housing construction cooperatives in Russia

In Russia the situation with the provision of housing can be substantially improved if a mechanism of housing construction cooperatives (HCC), effectively used in Soviet time, is fully re-established. There, however, exist certain risks which can be eliminated by adjusting legislative regulation, as Russia’s lawmakers assure.

... Precisely because unscrupulous developers started to disguise themselves as HCC, while the participation of cooperatives was limited, - argues Nadezhda Kosareva, President (IUE). She suggests turning to the Soviet experience and abandon the practice of privatizing the apartments in cooperative houses. This notwithstanding a person will hold an equity in his ownership. This also concerns the bequeathed property.

Kosareva considers the position of some officials ‘overly optimistic’. She proposes concrete measures. The first thing to do is to allow for lending. Land can be used as a pledge. But for that the state should not pass it over for free but rather rent out land to equity holders at least at a nominal price. “Against the pledge of an equity – our proposal – to be allowed only after commissioning of the building has taken place, - explained Nadezhda Kosareva – the most important question is the control of financial turnover. It should be explicitly formulated that money cannot be withdrawn from the cooperative immediately on demand of an equity holder”. Besides, the expert noted, it is of utmost importance that regions should be allowed to be the first to establish ‘patronage’ cooperatives for persons who are entitled to benefits and for those on a ‘waiting list’.