Dmitry Medvedev: “The main goal is to increase the construction of economy-class flats and reduce the cost of one square metre to enable almost half a million people of average income to buy housing by the end of 2017.”
Transcript:
Dmitry Medvedev: Good afternoon, ladies and gentlemen.
Extended meeting of the Board of the Ministry of Construction, Housing and Utilities
Today, we are taking part in a rather unusual event, the first meeting of the Board of the Ministry of Construction, Housing and Utilities. To be honest, many board meetings take place, and I am unable to attend all of them. However, in this case, I thought that it would be correct to invite you to the Government House and to address the meeting of your Ministry’s Board here because the Ministry was established quite recently and is called on to address highly complicated objectives to improve our way of life, to ensure the stable development of the housing sector and to create a modern housing and utilities infrastructure.
It is still hard to sum up any results because, as I said, the Ministry was established only eight months ago, but, nevertheless, certain results have been achieved over this period. I will name these results to create a foundation for subsequent productive and intensive work.
Dmitry Medvedev: "A new version of the Affordable and Quality Housing and Utilities programme has been drafted and approved, and this document includes the Housing for Russian Families programme. The main goal is to increase the construction of economy-class flats and reduce the cost of one square metre to enable almost half a million people of average income to buy housing by the end of 2017."
Our colleagues from the Parliament and we have drafted a lot of relevant legal acts. Earlier, this lawmaking activity was slower and much more sluggish. Key federal laws and regulatory bylaws were drafted, and they set forth the primary housing policy priorities and those regarding the development of the housing and utilities infrastructure. A law allowing the Government to approve an exhaustive list of housing construction procedures was passed. We have quite a few documents, and let me repeat that the situation is not ideal, but the Ministry has, nevertheless, managed to considerably improve things in the past eight months.
A federal law allowing municipalities to hold special auctions, so-called Dutch auctions stipulating gradual price reductions during the allocation of land plots, has been passed after seven years of discussions.
The Ministry of Construction, Housing and Utilities has also started reexamining a number of documents that were shelved by the Government or State Duma. I am referring to documents aimed at creating a favourable environment for the establishment of the affordable lease property market and the development of the nonprofit housing fund. Indeed, this draft legislation is also highly important.
Moreover, some draft laws formalise new mechanisms for the allocation of land plots to developers for building economy-class housing, with the mandatory provision that this housing will be sold at fixed prices. I hope that these draft laws will make it possible to resolve the housing problems facing citizens with modest incomes, and that they will help reduce the overall housing prices.
Dmitry Medvedev: "As of 1 May 2014, a little less than 18 million square metres of housing were put into service, or 27% more than in the relevant period of 2013."
The development of housing construction cooperatives should be another subject because altogether these cooperatives also make it possible to provide affordable housing to some categories of citizens, including academics and researchers.
I expect the Ministry of Construction, Housing and Utilities to submit its final proposals regarding the legal framework for the development of housing construction cooperatives before the year ends.
A new version of the Affordable and Quality Housing and Utilities programme has been drafted and approved, and this document includes the Housing for Russian Families programme. The main goal is to increase the construction of economy-class flats and reduce the cost of one square metre to enable almost half a million people of average income to buy housing by the end of 2017.
The Ministry of Construction, Housing and Utilities has approved a list of regions where this programme will be implemented. In all, 58 Russian regions have applied for this programme. To the best of my knowledge, agreements have been signed with a number of regions whose representatives are present here. I wish you every success in this area. I hope that this will help to realise the dream of many Russian citizens wishing to acquire their own housing.
The construction of housing for Russian families will require a conscientious attitude and complete dedication from everyone, including civil servants and businesspersons. I would like to ask the Ministry of Construction, Housing and Utilities, as well as regional governors, to monitor this project particularly closely as its implementation will be a yardstick for assessing the efficiency of Government actions.
The list of regions has not yet been finalised. I am calling on those regions that are not yet included in the list to take an active part in this programme and to draft their respective proposals.
I’d like to instruct the minister to draft in a year’s time the required agreements with the regions, so that we can build enough housing by the end of 2017. I’m referring to the construction of 25 million square metres of residential housing.
Dmitry Medvedev: "Under the plan, over 40,000 buildings are scheduled for repairs this year. I hope that this will help to improve the living conditions for almost 3 million people."
I know that the ministry is cooperating on housing construction with companies from the Asia-Pacific region. They have a wealth of experience in this sphere. We’ve all seen how quickly and how well they build. There are plans to sign a memorandum on mutual understanding between Russia and China in this field. So, Chinese builders may be involved in construction under our programmes. I hope that this will promote competition. We should help our Russian contractors as much as we can, but competition is a must.
I think that this is crucial because what matters most is not the number of contractors involved, but the real market situation and the cost of one square metre of housing.
Every company must be honest and transparent. Nobody should get fresh, and the result should be there. This is what competition is all about.
Ladies and gentlemen, housing construction is of major importance for this country. Let me repeat that we should build housing in a big way. We must build good housing and do this quickly – as much as we can.
As of 1 May 2014, a little less than 18 million square metres of housing were put into service, or 27% more than in the relevant period of 2013. This is a good result. However, metres are not the whole story. Housing must be affordable.
Apart from competition in the construction market, it is very important to use the right instruments in this respect, such as mortgage.
There are many instruments, but, at the end of the day, mortgage is still the most universal method of acquiring housing that is being used throughout the world. Yes, we have our limitations, but this doesn’t mean that we should renounce mortgage. Quite the contrary, we should improve mortgage and other financial instruments used for this purpose.
According to the Bank of Russia, almost 300,000 loans worth 500 billion roubles were issued as of 1 May this year. The number of mortgage contracts has been growing recently and this is a good thing, but we should monitor the level of interest rates. We’ve always said this. Interest is very high indeed due to many factors. We’ve spoken about this at different meetings. However, in any event, we should work towards its reduction.
I’d also like to draw the attention of the ministry to the issue related to the business climate in construction. The number of procedures required for receiving construction permits should be reduced, as well as the amount of time for this purpose.
While building new housing, it is important to monitor the condition of already available buildings. The housing and utilities sector is an age-old headache and should be the second area of the ministry’s focus. Obviously, the ministry should devote more attention to this issue.
Sound conditions are being created for attracting private investment into the modernisation of utility networks. Major repairs of housing are being launched and the system of managing multi-apartment buildings is being improved.
Needless to say, a sensitive issue in the housing and utilities sector is the relocation of people from unfit buildings. The Government has approved an updated package of measures on eliminating failing buildings. It has clear figures on the floor space and the number of relocated people. The federal budget will increase its share of funding for regional relocation programmes.
As for major repairs, the Government continues drafting a system that will provide for co-financing of major repairs of residential buildings by the Housing and Utilities Fund and regional budgets. Banks are also issuing loans for major repairs. Programmes for major repairs are carried out in 75 regions. Under the plan, over 40,000 buildings are scheduled for repairs this year. I hope that this will help to improve the living conditions for almost 3 million people.
Now I’d like to say a few words about the licensing of residential building management. Yesterday, the Duma adopted in the second reading a draft law that will make it possible to create a modern market in this vital sphere. The new mechanism is supposed to go into action on 1 September 2014. As we’ve agreed, management companies will have a transitional period for bringing their operations into conformity with the new requirements. As of 1 May 2015, all of them should work according to the new rules. I’d like to draw the attention of all of those present to this requirement.
The formation of a transparent system of utility fees has become another area of the ministry’s activities. The law on introducing public control over the housing sector has already been passed and signed by the President. Public associations, residential building councils and residents themselves will exercise this control.
Yesterday, the Duma also adopted in the second reading a draft law on developing a state database on housing and utilities, which will contain all of the relevant information. It should enter in force no later than 2016. The main point is that users will be able to check their housing and utility bills and monitor the operation of their management company. As of this July, long-term indexes for changing utility fees have been established.
I’ve also instructed the Government to restrict the average growth of utility rates not to exceed the inflation rate. This is an important and complicated issue.
We discussed this in detail at the national forum on upgrading the quality of housing and utilities, which was held in Chelyabinsk in early June. Several instructions were formulated after this forum, which I signed as we agreed.
Our actions should be aimed at curbing the growth of utility prices in a long-term perspective. We must guarantee to our people that each increase in utility fees will be adequate and modest.
Of course, the Ministry of Construction, Housing and Utilities should monitor the growth of utility prices and actively curb it with other interested parties.
Ladies and gentlemen, the new ministry is facing extremely enormous tasks. It is in charge of very complicated branches where problems have piled up for decades.
Now it will have to be responsible to everyone for the housing and utilities conditions. I’d like to hope that it will cope with this task and it will deal much more resolutely with the problems of individuals and companies that are involved in this sphere. And, of course, I’d like to wish you every success on this road.
The fact that we are meeting in the White House does not mean that the ministry does not have its own building. We have many new ministries and from time to time they are asking me to provide more office premises for them. However, your ministry is better-off in this respect. This is merely a sign of the attention to the issues that we have met to discuss today. Let’s wish the ministry good luck.
<...>
