Affordable housing in terms of government

Prime Minister VV Putin at a meeting in Kirov, February 3, 2011 said that "... no abstract square footage needed, namely the availability of quality housing for people with a particular solution of housing problems of the Russian family ... in 2015 no less than a third of all Russian families should be able to purchase a house with own or borrowed funds, due to housing loans, social grants, maternity capital. " No less important, as voiced by Mr. Putin, VV, - this growth in the construction of up to 142 million m per year (1 square meters per person per year). This requires investments of the order of 4.2 trillion. rubles per year [based on the price of housing 30 000 euro / sq.m]. Exclusively by public investment to ensure an increase in construction to those figures is impossible. These can be achieved only by simultaneously promoting a new product on the market, "Affordable Housing", which combines: • low-cost mortgage; • reasonable price per square meter; • safe way to purchase. Mortgage rates have now reached its minimum. Market leaders are state-owned banks, private banks and cheap sources of funding available through the program and HMLA VEB. Can be considered an acceptable rate at the level of inflation. Product Pricing "Affordable housing" should be tied to the income of the population, the threshold is determined by the availability of financial ability to purchase housing families with income not below average. Their share, according to statistics, 30-35% of the population. Most of the population away from the knowledge of the specific legal and financial transactions involving the acquisition of real estate under construction. Unfortunately a lot of defrauded real estate investors and other victims of unscrupulous sellers of housing. The proposed model provides protection against these risks, as payment for the apartment is made after completion of construction. The housing in Russia is considerably lower than in developed countries, so the potential market in the coming decades will have virtually no decline even with the growth in construction. First, the improvement of living conditions need around 60-70% of the population. Second, the total potential construction and sale of affordable housing on the basis of norms for 18 sqm per person per year, is = 18 * 0.7 * 0.35 = 4.41 sq. m. per person. If in a year to build at 15% of the total market potential, the resulting volume of the construction of "affordable housing" will be 0.66 meters per person per year or 94 million m throughout the country. Other new housing can be provided to commercial housing business class, and direct government order. The main source of funding for affordable housing, in our opinion, there is - it's income, with annual volume of official estimates of 31-32 trillion. rubles a year. Thereby to provide affordable housing need through the banking system and residential mortgage lending annually redistribute (including share of mortgage transactions - 60%) 94mln. Sq.m. * 30 thousand rubles / sq. * 0.6 = 1.7 trillion. rubles (about 5-6% of income). As can be seen from the calculations there is a very significant potential market growth of mortgage lending (in the peak in 2008 was granted mortgage loans worth 650 billion rubles). Thus, the new product "Affordable Housing" for state and municipal government can be a real mechanism for creating opportunities to purchase housing for families and increase the third volume of construction before 1 sq.m. per person per year. However, given the scarce nature of the construction market, you will need some support for the new product during its emergence from the state. First, talk about "affordable housing" as a marketable product, it makes sense only if large-scale construction. In this case, we can sustain a high level of quality at a reasonable price. Therefore, we need large plots of land suitable for housing and infrastructure (at least 200-300 thousand sq.m.). In most large cities such as land, equipped with the necessary engineering and social infrastructure is lacking. Development of new land, providing them with social and engineering infrastructure will require significant government financial investments to be made at an early stage. Now for the regions there are real opportunities to attract co-financing of the relevant objectives of the federal budget and from state development institutions (HMLA, EBV, and Housing Funds RHD). Moreover, any state investment in infrastructure, housing for the regional authorities, it is extremely beneficial. We have made a rough calculation of tax payments during the construction of affordable housing: • all budgets at all levels proceeds in the order of 42% of the cost of construction, including the consolidated budget of the RF subject - about 18%; • as a result of housing increase in aggregate demand related industries, primarily in the real economy. The size of the multiplier for housing is 2-3, that is, each invested in housing, the ruble, the GDP increased by 2-3 rubles. Secondly, but no less important area of ​​support for affordable housing by the authorities - this is an intensive educational work among the population. For a successful housing development is not enough to create an opportunity for a home purchase third of the population. It is important that people wanted to buy a home and thus chose a new home. When buying a home in the secondary market will be no additional fiscal impact to the budget nor the growth of housing construction. Just want to note that a number of government programs aimed at supporting demand (providing social benefits to certain categories of citizens) is not in the market of housing under construction. As a result of such self-restraint (due, primarily, the equity risk in the building) state, first, loses considerable revenues to the budget system and, secondly, the pumps the secondary market for additional funds. As shown, the stimulation of demand without increasing supply works objectively to higher prices. The population now does not want to invest in housing because of high risks. New marketable product "Affordable Housing" removes these risks (calculated for an apartment - at the end of construction), but takes a lot of advocacy work, to home buyers aware of this advantage and want to buy affordable housing. And also from the authorities know where and under what conditions it can be purchased. We believe (and we tested this hearing) that such an approach, the population will respond warmly to the call of the state.