Opening remarks by Dmitry Medvedev:

We are here today for the second round of our discussion on housing. We already met two months ago, in August, to outline our general approach to this issue. I hope that this time around we will hear final proposals on what needs to be done and how.

I don’t want to make any banal remarks. Housing is certainly a most sensitive issue for many Russians. It is also the focus of both federal and regional authorities. This problem requires huge investments, at least according to the government figures. At the same time, at least 50% of Russians are not satisfied with their living conditions and would like to change that. However, only 25%-27% of Russians can afford to buy residential property even with mortgages.

Let me begin by citing some recent achievements. We continue implementing the Housing federal targeted programme and will do so through 2015, providing government support to the most vulnerable groups of the population such as young families (with one or both spouses under 30), academics, teachers, doctors and other public sector employees, as well as military and interior department servicemen facing retirement. The federal government approved 53 billion roubles for this purpose in 2012. Doctors’ incomes are under discussion now.

Some 31,000 plots of land for construction were granted to families with three or more children between January 2011 and September 2012, while regional authorities report a total of 220,000 applications from such families. This initiative has certainly been met with an eager response and demand, although it has encountered some difficulties. But this is something I could predict when I proposed it in 2011.

It is essential that these plots of land are connected to roads, electricity and other utilities – water and gas mains of course. In late June, I signed a resolution adopting a series of measures to accelerate the process of connecting to utilities. I hope this will help, and I will keep an eye on this.

Now I would like to say a few words about another directive that was issued a long time ago, in May 2008, but is still important nonetheless – providing housing to World War II veterans. By August 1, 2012, more than 280,000 war veterans got registered through the programme. Nearly 80% of them, 224,000 have had their living conditions improved. This is a good result, although it required a significant financial investment and a lot of energy. More veterans are registering still. Regional authorities expect a total of 30,000 veterans to register this year. We should make sure, of course, that those who register for this programme are indeed entitled to it. This is actually a sensitive issue because there are ethical aspects and other hidden reefs to it. Still, these issues need to be addressed. Providing housing to war veterans remains one of the government’s priorities, and we will continue working on it. Let me remind you that this year, we allocated 38 billion roubles from the federal budget for this purpose. The money has been transferred to the regions.

Now let’s move on to another important problem which will eventually affect the implementation of the entire housing programme. I am referring to construction costs and ways of reducing them – or more specifically the construction of economy class housing. Resolving this problem will certainly help to ease this sensitive issue. According to expert estimates, cutting construction costs by 20% should make standard mortgage payments and consequently, new housing, affordable for over a million households that cannot afford it currently. As you know, the cost per square metre of property is mainly dictated by the developer’s costs in purchasing the land, the design of the building, connection to utilities and certain other overhead expenses. Each of these costs can obviously be reduced if the effort is made.

One way is to use standard designs. We actually resorted to this even before the Affordable and Comfortable Housing programme. Some standard buildings have been designed, but the plans still need to be adjusted for specific locations and customers. Some of them are happy with flats while others want their own house, however small. But whatever the case, standardised designs have to be used. To implement standardised projects, we also need to modernise the production of building materials, as well as the industrial companies which build economy class properties. We are already doing this, although progress is not as fast as we would have liked. This should also be a priority for some of our development institutions which could have been more active in this field.

So my next proposal is to enlist the support of these institutions – mainly the Housing Mortgage Lending Agency and the VEB bank – in providing loan financing. They already have a policy of stimulating lending for the construction and purchase of housing by giving banks the opportunity of taking out special-purpose loans at fixed rates. This is called a stimulus programme. Let’s discuss this, too.

In any case, the more options people have the better. We must also focus on developing a transparent rental market and on building more housing for the affordable rental scheme. Renting property is very common in Europe; in Russia the proportion of rented property is far smaller. Moreover, the rental market is largely in the shadows. In late August, the Government approved a series of measures to make the rental market more civilised, so that the interests of both the landlord and tenant can be guaranteed, and to make the construction of housing for the affordable rental scheme attractive to investors. I would like to hear about what progress has been made on these plans.

There are two more documents I just signed that I would like to mention before we begin. They relate to the quality of housing and of the housing and utilities services. The first resolution makes it possible to change the water rates or the price of connection to the water mains set by regional or municipal authorities if the decisions they took were beyond their authority. This happens way too often. Let me remind you that such decisions can already be overruled with regard to power and heating supplies. Now a similar practice will be applied to water supplies as well.

The other resolution applies to residents of earthquake danger zones in Russia where a special federal targeted programme is being implemented. It offers incentives to regions which fulfill their obligations under this programme on time: government subsidies to the regions will be redistributed from the areas which fail to comply with this programme. I already gave warning about this at a meeting we held in Kamchatka in the Far East devoted to earthquake-resistant construction.  We’ve decided to redistribute the subsidies in favour of the regions which fulfill their commitments, giving them additionally 0.5 billion roubles.

Let’s hear your reports now. I would like them to be brief and to the point, just your proposals – what has been done and what you propose to do with regard to what we discussed last summer.

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