The present report is devoted to the analysis of reform progress in the housing and communal service sector, one of the most socially important sectors of the economy. The sector’s problems have attracted much political attention in the recent years. To date, however, no significant positive changes have occurred. Moreover, there is multiple evidence of the deterioration in both the technical and financial situations of the sector. The housing and communal service sector plays the role of the last bastion of (communism) socialism, characterized by inflated and thus unfulfilled social mandates of the state, absence of real economic relations, and low quality of services produced. The deep depreciation of fixed assets, grave financial state of the sector enterprises, and  social demagogy in place of clear and understandable rules of the game make the sector unattractive for private businesses.

It is quite evident that the complexity and systemic nature of the sector’s problems call for responsible political and economic decisions at the highest level of government.

However, while the housing and communal service sector is one of the biggest sectors of the national economy, its enterprises are scattered over the entire territory of Russia and fall under the jurisdiction of local governments. Attempts to implement sector reforms from the center alone look like trying to boil the ocean. No real changes can be achieved until a system of positive and negative motivation for all stakeholders, first of all local governments, is in place. In order to check once again the correctness of the strategic goals, characterized by the successes and failures in the selection of tactical reform steps, it is necessary to present the overall experience accumulated in the ten years of transformations in the housing and communal service sector, review the results achieved, and distinguish with maximum clarity the negative and positive experience acquired.

This report presents the results of an analytical survey of the experience of housing and communal service sector reforms in the past ten years, contrasting this experience with the declared reform goals and objectives, comparing the progress of reforms in different municipalities of Russia, identifying reasons for their successes and failures, and developing proposals for improving the efficiency of reform measures at the state and municipal levels on the basis of these analytical conclusions.

Of special note is that the research was intended to initiate a professional discussion of the results and of ways to further reforms in this sector of Russia’s economy that is of vital importance to every citizen, rather than to provide recipes based on the analysis of the current practices.

The research was conducted with the use of statistical and expert data on the state of the housing and communal service sector in over 30 big and small municipalities. The authors are sincerely grateful to all leaders and specialists of various housing agencies in different parts of the country for their assistance in this work.