Moscow is looking for investors
to help with renewal of old city
By Yana Yurova, Political Commentator (RIA Novosti)

7 March 2005: Over the past three to four years, many of Moscow’s streets have been renovated. Modern office buildings and blocks of flats with underground car parks have sprung up. However, the city centre continues to fall into disrepair. The Russian capital is an old city. Experts claim that if a large-scale restoration of the central administrative district is not started now, some areas will be no better than slums in about twenty years.

There are about 5,000 buildings in Moscow’s central administrative district covering nearly 12 per cent of the city's floor space, or more than 16 million square meters of housing and about the same amount in non-residential premises. In contrast to the modern buildings dominating the rest of Moscow, the centre plays host to mostly old and, as a rule, shabby constructions. Alexei Vvedensky, the head of a group for special projects of Moscow's construction, architecture and restoration complex, says: "Most buildings in the city centre were erected in the late 19th and early 20th century. Their foundations were often laid using timber joists. The timber has gone rotten and the foundations have worn out over 100 years." According to real estate analysts, two-thirds of all buildings and structures in central Moscow (about 7,000 in all) are dilapidated.

Construction is underway virtually throughout central Moscow. Alexander Chapayev, an official at the prefect's office of the central administrative district, said that some 1.1 million square meters of floor space were commissioned in the district last year. Of this amount, more than 336,000 square meters of housing and 795,000 square meters of non-residential premises were opened.

The Basmanny, Tagansky and Presnensky municipal districts lead the way in terms of the number of newly erected and modernized buildings, while the Arbat and Yakimanka areas prop up the unofficial league table. However, if the above-mentioned square meters are recalculated as buildings, the results will be very modest. Under the program for demolishing and rebuilding dilapidated five-story blocks in Moscow, 57,000 square meters of housing (or five apartment houses) were built in 2004. To move city dwellers from ramshackle housing built in the early 20th century, another 9,365 square meters of housing (two more apartment houses) were built. Private companies built another 28 blocks. Therefore, only 35 newly built apartment houses have appeared in the centre of late. With the addition of 70 new office blocks, 105 buildings were completed and opened in a year.

Plans for next year cannot be called global either. According to the data of Moscow's construction, architecture and restoration complex, 13 five-story buildings relating to the first wave of mass-scale industrialized housing construction and 14 decrepit houses with a total area of about 70,000 square meters will be pulled down in the centre next year. People will be evicted from 13 dilapidated apartment houses, while major repairs will be begun on six buildings. The rest will have to wait. Some 30 new apartment blocks and about 70 offices are also to be built.

Naturally, the municipal authorities are very concerned about the problem. Officials at the prefect's office of the central administrative district believe that the real number of dilapidated blocks exceeds official figures. The Moscow government intends to put up decrepit housing for auction. This means that they are pinning their hopes on investors. Indeed, investment in real estate restoration in the centre of Moscow, even when it is complicated from the architectural and engineering standpoints, is profitable. However, it is not so easy to invest money in such a project today. This year, the Russian Federation's Housing Code and the Municipal Construction Code have been put into effect. However, local and federal laws have not been properly harmonized. As a result, with 355 investment projects signed in the Moscow Central district and 171 apartment houses and 184 offices to be built under these projects, Moscow government officials cannot be certain that all these projects will be completed.

There is also a problem of the residents in dilapidated housing. Where will they move? In the past, this was the municipal authorities' concern. Now the city authorities refuse to intervene, leaving it to the investor to cope with this problem. The main difficulty is Moscow's double subordination. On the one hand, this is a municipal entity with its own laws and standards. On the other, this is Russia's capital that has to fulfil federal tasks. As a result, we can say, repeating the old proverb, that too many cooks spoil the broth.

Even if the new barriers to investors are removed, the old Moscow districts will hardly have a better fate. The number of building sites in the centre is so high that it is nearly impossible to squeeze in a new building. This means that there is no housing for people evicted from dilapidated buildings, because is that under the law they must be given new housing close to where their old blocks were located. This means that the old districts will fall even further into decay.