Direction of the rental market

This stuff continues the series of research results of the Russian rental market, conducted by the Foundation for Social Development and the independent think tank, "The first St. Petersburg Humanities and Technology Corporation" in 2010. The full title of the work - "Institute of rental housing in Russia: current status, trends and possible role in the implementation of public housing, personnel, and migration policy." In the study, were assessed rental market in the major cities of Russia, held round-table discussions, expert workshops and focus groups with tenants and landlords. Customer research by non-governmental organization Institute of Public Projects. Analyzing the prospects for the development of rental housing in the sphere of Russia on the basis discussed in the study of foreign and domestic experience, mature practices and public policy, we can conclude that the possible models for the legal, economic and social regulation of rental housing can be reduced to two basic paradigms. State Incentives for development of market rent of the free market Government incentives. Based on the idea of ​​direct active public participation in the development of the Institute of rental housing. This model is based on several assumptions and approaches. First of all, it's socially oriented model, which sets itself as the main, the task of providing the housing for people with average and below average incomes through the development processes of social rented accommodation and service. In this context, this line of development of the sector of rental housing is important for the provision of temporary housing for young professionals, young families, state employees, soldiers, workers and immigrants, the disfranchised (persons who have lost housing due to natural and manmade disasters, social conflicts and wars, outstanding debt), etc. This aspect of the housing rent was emphasized during the expert workshops, and expert interviews, and a number of focus groups. It is important to note that support for this direction is a lively response from all sides. First, they are representatives of state and municipal governments. Those who see in this area is simple, clear, and the traditional organizational easily workable solution to their problems and tasks assigned to them. Second, they are representatives of businesses and organizations engaged in direct construction of housing, who see in this area expanding their own activities. Third, this potential tenants. The latter can be divided into two groups. First, consider this type of rental housing as a temporary form for the duration of the relevant structure or organization. And ready to enter into contractual leases with the party - employers and rent-chairman. The provision of rental housing, one way or another supported by municipal and regional authorities, major employers, it is seen as a realistic and promising way to solve the housing problem. Second, consider this type of leasing as a more or less permanent way to live and a way of life, blaming her for the state organization. The latter is a pronounced tendency to paternalistic attitude of citizens and the state is largely a residual memory of the state's role in society in the Soviet Union. The state is still considered the bulk of the respondents as a guarantor is able to provide security, to act as arbitrator and bring order to the "wild market" uncontrolled rent. It must be emphasized that for the first category of data for potential tenants, and for the second, social service and employment floor space is a necessary measure. Almost always agree to leases in this case specifies the desirable possibility of further foreclosure homes. Long-term, in installments, at a discounted price, etc. These attitudes, in particular, indicates that the institution of perpetual social rented outlived itself, and must be replaced by a more flexible term without compensation, on the one hand, and with option to purchase on favorable terms, on the other. Moreover, these types of social housing should not be combined in one apartment building, in order to avoid an inefficient institution of cohabitation. Among the measures that can start the process of development of the sector of rental housing, its potential customers - the state and municipal authorities clearly been named: - that the practice of free privatization of housing - the reform of the institution of social engagement with an indefinite term on the one hand, and an evidence, that e. Requiring an employer to the social proof of insolvency, on the other. We can assume that by now the standard of free privatization of housing in the form of social support has become a form of social disadvantage the interests of the inhabitants of our country, deprived of because of its possible entry into the action leases with potentially interested parties, who were forced to build housing for not putting it in hiring. The practice of housing for the poor in various state and municipal programs exist in all examined in this study countries, but nowhere is it is not accompanied by the right of free privatization of the housing. However, experts do not limit essential part of the state only the provision of social rental housing. The workshops, interviews and focus groups consistently seen the positive expectation of government intervention in the slowly emerging market residential leases. At the same shall include the following measures of public housing policy designed to create alternative forms of commercial accommodation paying citizens: - creation of a state agent - corporate development of rental housing, the primary objective of which should be the construction of tenement houses the pilot regions, requiring an influx of migrant workers and immigrants, for testing market mechanisms and economic incentives for development of this segment - changing the registration and tax policies to ensure the competitiveness of legal lease illegal - removal of encumbrances or installment of infrastructure during the construction of tenement houses. Self-developing market This paradigm is based on the idea of ​​market conditions, development of the Institute of rental housing. The state, according to the respondents, should set some rules and regulations that promote the development of housing rent. A clear list of rules and regulations, a description of their supportive legislative framework, the development of appropriate methods and models is a single costly work that goes far beyond the scope of this study. Now it is necessary to indicate the presence in Russian society this view and highlight its main components. Among them are a few basic principles, approaches and assumptions. First of all, is the market rent, focused on meeting the demand for housing representatives of contemporary Russian middle class and more affluent groups in the free formation of prices. Simultaneously, the development of rental housing market institution as potentially interesting for long-term risk-free investments and investors, and to broaden the tax base in the region. It may be noted that the market direction of development of housing rent was regarded as a number of experts during the interviews and the participants of expert seminars and focus groups. Proponents of this approach are, first of all, representatives of business structures: investors, developers, builders, etc., the expert community as well as representatives of contemporary Russian middle class - the potential tenants. As a first step, the formation and development of a civilized market institution housing rentals often determined by the need to legalize the existing practices of the lease. It is important to emphasize that the proponents of such a step in the study were identified as among the current tenants and landlords of housing. Important conditions for the legalization of the lease is most often determined by: • tax cuts (from 13% personal income tax to 6% for all categories uproschenku lessors), • standardization of contractual lease relations, • standardization provided rental housing, • standardization of rights and obligations of landlords and • tenants simplifying registration. These steps do not require extensive research and legislative work, and can be efficiently implemented within the framework of federal housing policy. The next step in the development of a civilized market institution housing rent determined by the need for changes and amendments to several laws and legislative acts of the federal and regional level, contributing to the development of commercial rental - apartment buildings and the construction of their target. Important economic incentive to develop the market known as: - the overall growth of housing construction (saturation) - introduction of a mortgage tenement houses - development of mechanisms for refinancing and securitization - permit pension funds and insurance companies to invest in debt obligations of owners tenements - to reduce inflation and refinancing. Next, you can select a block of information to support project development of a civilized market institution housing rent. This should include: - Market research with subsequent publication and discussion of their results - an analysis of existing practices for today private investors investing in real estate for its subsequent use as rental housing - targeted promotion of lifestyle in a rented house, using this as today's Russian examples, as well as international experience. As an important propaganda trick, participants in the study as a possible demonstration of construction of rental housing complexes - Pilot (model) tenements - at the expense of state programs, with an analysis of economic impact and results. Such a practice could serve as a model for big business to demonstrate the promise of such a model of investment. For example, this government program implemented in all regions of Kazakhstan. In general, the first and second paradigms are not mutually exclusive, and participants in the study are evaluated as promising for the development of the Institute of rental housing in Russia. Estimating the rate of implementation of these processes may be noted that if the development of institutions of rental housing will occur without the institutional and legislative support, their actual formation may be delayed for decades (although the result will still be made) will be created if the same special, as described above, the conditions contributing to the formation of the real sector, we can expect strong growth areas of rental housing in the near future. Measures to develop the market rental housing proposed measures for the development of rental housing market in Russia include the following steps: • Change the existing legislation in the sphere of housing policy for preferential categories of citizens • Developing measures to exit out of the shadow rental market • Creating a more transparent market rent • Creation of special government programs • Construction of new social housing and rental homes • Use of existing buildings under reconstruction change the existing legislation in the sphere of housing policy for the content of privileged categories of citizens of the proposed measures is to change the legislation aimed at eliminating or significant difficulty free process of housing privatization. This process, according to market participants, currently leads not only to improve housing conditions, as to an uncontrolled increase in the number of homeowners. This leads to the following consequences: • The new owners often do not use the housing themselves, preferring to rent it out or send to relatives. This fact casts doubt on the inner grounds of public policy provision of social housing. • New owners are often unable to maintain housing quality condition that leads to a general deterioration of the housing stock. It is proposed to tighten considerably the conditions of free privatization of social rented and, in particular: • Establish effective mechanisms by which the lessee / owner of social housing • Strengthen social conditions of contracts of employment towards reducing their prescribing the terms and conditions of meaningful and transparent provision of social housing. The development of measures to exit the rental market from the shadows of all study participants, with the exception of landlords favor the development of measures to improve the transparency of the market rent. As a key measure called the facilitation of taxes on work to deliver the apartments. According to the study, a barrier to the tax transparency of the market, in terms of its participants, is not so much the fact of tax burdens, many difficulties on their payment to people for whom this activity is not core. In fact, and tenants and landlords have a stable demand for stability and predictability, to steady the image of the future. For the sake of confidence in the future, some security like tenants and landlords are willing to bear the material costs. Thus, the guarantees of the rights of the parties may make the tenant to make a comparable increase in rents, and landlords - to pay taxes. Note that this is the only position in which research has shown willingness to cooperate with landlords state tax authorities. However, in exchange for additional costs, market participants want to get a variety of safeguards and the overall stabilization of the situation on the market. Focus group participants noted the need to revise or create a new legal framework in the first place, Insurance Institute of rental housing and rental contracts, the formation of an independent supervisory (supervisory) body, as well as unified and standardized rules of rental housing. First of all, it is proposed introduction of compulsory insurance in the formalization of leases for Naib Experts also suggest a more reasonable, in their opinion, the tax rate (that is, reduce the existing 13% today). Creating a more transparent market rent key parameter for self-regulation of the market participants in the study referred to its transparency. Element of the market responsible for this option should be to create (or emergence) of a single database or databases of rental apartments. In the commercial form, such a framework would provide market participants with information about the situation as a whole and would help to reduce the resistance of the information in the market. These bases are already established and operated in Moscow and St. Petersburg. In the framework of public policy development of the market rent, you can create a database on surrendering with their assigned apartments in the official order (or state-certified private offices) characteristics. Such a framework would serve as the basis for the management of affordable rental fund, tax policy, as well as ordering relations between landlord and tenant. It would be possible to avoid the frustration of the tenant and landlord tensions with that care is now only about their own benefit without the minimal social responsibility (especially if they have been forced by the state referred to as self-employed with an estimated tax). For example, according to survey participants, such a database operating in Finland. Participants in the study of Yekaterinburg have given an example of how to use a supervisory body (Ural Chamber of Real Estate, which appeared with the state filing) solved the problem of buying and selling real estate in the Urals District. The creation of special government programs Government initiatives, according to experts, can be an effective means of increasing the interest of developers and citizens to the rental market. This stuff continues the series of research results of the Russian rental market, conducted by the Foundation for Social Development and the independent think tank, "The first St. Petersburg Humanities and Technology Corporation" in 2010. The full title of the work - "Institute of rental housing in Russia: current status, trends and possible role in the implementation of public housing, personnel, and migration policy." In the study, were assessed rental market in the major cities of Russia, held round-table discussions, expert workshops and focus groups with tenants and landlords. Customer research by non-governmental organization Institute of Public Projects. Analyzing the prospects for the development of rental housing in the sphere of Russia on the basis discussed in the study of foreign and domestic experience, mature practices and public policy, we can conclude that the possible models for the legal, economic and social regulation of rental housing can be reduced to two basic paradigms. State Incentives for development of market rent of the free market Government incentives. Based on the idea of ​​direct active public participation in the development of the Institute of rental housing. This model is based on several assumptions and approaches. First of all, it's socially oriented model, which sets itself as the main, the task of providing the housing for people with average and below average incomes through the development processes of social rented accommodation and service. In this context, this line of development of the sector of rental housing is important for the provision of temporary housing for young professionals, young families, state employees, soldiers, workers and immigrants, the disfranchised (persons who have lost housing due to natural and manmade disasters, social conflicts and wars, outstanding debt), etc. This aspect of the housing rent was emphasized during the expert workshops, and expert interviews, and a number of focus groups. It is important to note that support for this direction is a lively response from all sides. First, they are representatives of state and municipal governments. Those who see in this area is simple, clear, and the traditional organizational easily workable solution to their problems and tasks assigned to them. Second, they are representatives of businesses and organizations engaged in direct construction of housing, who see in this area expanding their own activities. Third, this potential tenants. The latter can be divided into two groups. First, consider this type of rental housing as a temporary form for the duration of the relevant structure or organization. And ready to enter into contractual leases with the party - employers and rent-chairman. The provision of rental housing, one way or another supported by municipal and regional authorities, major employers, it is seen as a realistic and promising way to solve the housing problem.

Second, consider this type of leasing as a more or less permanent way to live and a way of life, blaming her for the state organization. The latter is a pronounced tendency to paternalistic attitude of citizens and the state is largely a residual memory of the state's role in society in the Soviet Union. The state is still considered the bulk of the respondents as a guarantor is able to provide security, to act as arbitrator and bring order to the "wild market" uncontrolled rent. It must be emphasized that for the first category of data for potential tenants, and for the second, social service and employment floor space is a necessary measure. Almost always agree to leases in this case specifies the desirable possibility of further foreclosure homes. Long-term, in installments, at a discounted price, etc. These attitudes, in particular, indicates that the institution of perpetual social rented outlived itself, and must be replaced by a more flexible term without compensation, on the one hand, and with option to purchase on favorable terms, on the other. Moreover, these types of social housing should not be combined in one apartment building, in order to avoid an inefficient institution of cohabitation. Among the measures that can start the process of development of the sector of rental housing, its potential customers - the state and municipal authorities clearly been named: - that the practice of free privatization of housing - the reform of the institution of social engagement with an indefinite term on the one hand, and an evidence, that e. <<>> Requiring an employer to the social proof of insolvency, on the other. We can assume that by now the standard of free privatization of housing in the form of social support has become a form of social disadvantage the interests of the inhabitants of our country, deprived of because of its possible entry into the action leases with potentially interested parties, who were forced to build housing for not putting it in hiring. The practice of housing for the poor in various state and municipal programs exist in all examined in this study countries, but nowhere is it is not accompanied by the right of free privatization of the housing. However, experts do not limit essential part of the state only the provision of social rental housing. The workshops, interviews and focus groups consistently seen the positive expectation of government intervention in the slowly emerging market residential leases. At the same shall include the following measures of public housing policy designed to create alternative forms of commercial accommodation paying citizens: - creation of a state agent - corporate development of rental housing, the primary objective of which should be the construction of tenement houses the pilot regions, requiring an influx of migrant workers and immigrants, for testing market mechanisms and economic incentives for development of this segment - changing the registration and tax policies to ensure the competitiveness of legal lease illegal - removal of encumbrances or installment of infrastructure during the construction of tenement houses. <<>> Self-developing market This paradigm is based on the idea of ​​market conditions, development of the Institute of rental housing. The state, according to the respondents, should set some rules and regulations that promote the development of housing rent. A clear list of rules and regulations, a description of their supportive legislative framework, the development of appropriate methods and models is a single costly work that goes far beyond the scope of this study. Now it is necessary to indicate the presence in Russian society this view and highlight its main components. Among them are a few basic principles, approaches and assumptions. First of all, is the market rent, focused on meeting the demand for housing representatives of contemporary Russian middle class and more affluent groups in the free formation of prices. Simultaneously, the development of rental housing market institution as potentially interesting for long-term risk-free investments and investors, and to broaden the tax base in the region. It may be noted that the market direction of development of housing rent was regarded as a number of experts during the interviews and the participants of expert seminars and focus groups. Proponents of this approach are, first of all, representatives of business structures: investors, developers, builders, etc., the expert community as well as representatives of contemporary Russian middle class - the potential tenants. <<>> As a first step, the formation and development of a civilized market institution housing rentals often determined by the need to legalize the existing practices of the lease. It is important to emphasize that the proponents of such a step in the study were identified as among the current tenants and landlords of housing. Important conditions for the legalization of the lease is most often determined by: • tax cuts (from 13% personal income tax to 6% for all categories uproschenku lessors), • standardization of contractual lease relations, • standardization provided rental housing, • standardization of rights and obligations of landlords and • tenants simplifying registration. These steps do not require extensive research and legislative work, and can be efficiently implemented within the framework of federal housing policy. The next step in the development of a civilized market institution housing rent determined by the need for changes and amendments to several laws and legislative acts of the federal and regional level, contributing to the development of commercial rental - apartment buildings and the construction of their target. Important economic incentive to develop the market known as: - the overall growth of housing construction (saturation) - introduction of a mortgage tenement houses - development of mechanisms for refinancing and securitization - permit pension funds and insurance companies to invest in debt obligations of owners tenements - to reduce inflation and refinancing. <<>> Next, you can select a block of information to support project development of a civilized market institution housing rent. This should include: - Market research with subsequent publication and discussion of their results - an analysis of existing practices for today private investors investing in real estate for its subsequent use as rental housing - targeted promotion of lifestyle in a rented house, using this as today's Russian examples, as well as international experience. As an important propaganda trick, participants in the study as a possible demonstration of construction of rental housing complexes - Pilot (model) tenements - at the expense of state programs, with an analysis of economic impact and results. Such a practice could serve as a model for big business to demonstrate the promise of such a model of investment. For example, this government program implemented in all regions of Kazakhstan. In general, the first and second paradigms are not mutually exclusive, and participants in the study are evaluated as promising for the development of the Institute of rental housing in Russia. Estimating the rate of implementation of these processes may be noted that if the development of institutions of rental housing will occur without the institutional and legislative support, their actual formation may be delayed for decades (although the result will still be made) will be created if the same special, as described above, the conditions contributing to the formation of the real sector, we can expect strong growth areas of rental housing in the near future. <<>> Measures to develop the market rental housing proposed measures for the development of rental housing market in Russia include the following steps: • Change the existing legislation in the sphere of housing policy for preferential categories of citizens • Developing measures to exit out of the shadow rental market • Creating a more transparent market rent • Creation of special government programs • Construction of new social housing and rental homes • Use of existing buildings under reconstruction change the existing legislation in the sphere of housing policy for the content of privileged categories of citizens of the proposed measures is to change the legislation aimed at eliminating or significant difficulty free process of housing privatization. This process, according to market participants, currently leads not only to improve housing conditions, as to an uncontrolled increase in the number of homeowners. This leads to the following consequences: • The new owners often do not use the housing themselves, preferring to rent it out or send to relatives. This fact casts doubt on the inner grounds of public policy provision of social housing. • New owners are often unable to maintain housing quality condition that leads to a general deterioration of the housing stock. It is proposed to tighten considerably the conditions of free privatization of social rented and, in particular: • Establish effective mechanisms by which the lessee / owner of social housing • Strengthen social conditions of contracts of employment towards reducing their prescribing the terms and conditions of meaningful and transparent provision of social housing. <<>> The development of measures to exit the rental market from the shadows of all study participants, with the exception of landlords favor the development of measures to improve the transparency of the market rent. As a key measure called the facilitation of taxes on work to deliver the apartments. According to the study, a barrier to the tax transparency of the market, in terms of its participants, is not so much the fact of tax burdens, many difficulties on their payment to people for whom this activity is not core. In fact, and tenants and landlords have a stable demand for stability and predictability, to steady the image of the future. For the sake of confidence in the future, some security like tenants and landlords are willing to bear the material costs. Thus, the guarantees of the rights of the parties may make the tenant to make a comparable increase in rents, and landlords - to pay taxes. Note that this is the only position in which research has shown willingness to cooperate with landlords state tax authorities. However, in exchange for additional costs, market participants want to get a variety of safeguards and the overall stabilization of the situation on the market. Focus group participants noted the need to revise or create a new legal framework in the first place, Insurance Institute of rental housing and rental contracts, the formation of an independent supervisory (supervisory) body, as well as unified and standardized rules of rental housing. <<>> First of all, it is proposed introduction of compulsory insurance in the formalization of leases for Naib Experts also suggest a more reasonable, in their opinion, the tax rate (that is, reduce the existing 13% today). Creating a more transparent market rent key parameter for self-regulation of the market participants in the study referred to its transparency. Element of the market responsible for this option should be to create (or emergence) of a single database or databases of rental apartments. In the commercial form, such a framework would provide market participants with information about the situation as a whole and would help to reduce the resistance of the information in the market. These bases are already established and operated in Moscow and St. Petersburg. In the framework of public policy development of the market rent, you can create a database on surrendering with their assigned apartments in the official order (or state-certified private offices) characteristics. Such a framework would serve as the basis for the management of affordable rental fund, tax policy, as well as ordering relations between landlord and tenant. It would be possible to avoid the frustration of the tenant and landlord tensions with that care is now only about their own benefit without the minimal social responsibility (especially if they have been forced by the state referred to as self-employed with an estimated tax). For example, according to survey participants, such a database operating in Finland. <<>> Participants in the study of Yekaterinburg have given an example of how to use a supervisory body (Ural Chamber of Real Estate, which appeared with the state filing) solved the problem of buying and selling real estate in the Urals District. The creation of special government programs Government initiatives, according to experts, can be an effective means of increasing the interest of developers and citizens to the rental market. For example, the state (city officials) are invited to initiate and co-investors pilot project tenements. Traditionally offers a direction for government intervention is to facilitate access to public infrastructure, simplification of eligibility for construction, land registration, etc. These measures are discussed with admirable regulyanostyu developers. In the example usually given in Finland, where there is a very experience of working with developers, which greatly simplifies and reduces the cost of any developer's initiative. We also discuss the development of programs for the development of mobility and information services to the population in the area of ​​the lease. Construction of new social housing and rental houses Activity for construction of new apartment buildings, with state participation or without it, includes some problematic topics: • Finding and working out the required formats and standards of rental housing; • Building and equipping the legal relationship between developers , the state and the management company; • Use of redevelopment of existing buildings. <<>> The problem of standards and formats for rental housing is completely analogous to the problem of the usual standards of housing, for sale. In other words, it should be determined, at least in general terms, what class of housing ("economy", "comfort", etc.), which formats the buildings (typical high-rise buildings, low-rise blocks, etc.), what quality standards are the most promising and popular market. In this situation, it makes sense to turn to the experience of quality management from major developers, as well as to existing housing quality standards in the EU. In addition, in the rental housing exists its own set of requirements and standards that must be considered, such as in economy class preferred number of rooms, not in their area. A housing business and premium class must have utility rooms and rooms for indentured servants. The problem of formats and standards is also associated with the use of rental housing as an instrument of social control. It should be clear criteria for quality, retaining the status of a particular object, and acts as a filter for different categories of residents. The problem of relations with management companies there is a high level of readiness of the project and putting it into operation. For example, when commissioning, or at a later stage in the future income / rental homes may be a situation which, if the current speed of adjustment problems at the state level can ruin an entire project in the early stages (especially if the project will be implemented on the initiative of the state): An interesting noted in a study opportunity for the development of rental housing is the reconstruction of existing buildings. <<>> This activity faces several challenges, including change the status of the premises and the status of the territory, and therefore can not be simplified without drastic and serious changes in the documents and laws governing urban development. In this regard, the only real focus is unused for various reasons, housing: dormitories, some of the "Khrushchev," and so on.