On September 15th, 2017, the IUE hosted a Conference on the New Agenda for Development of Russia’s Cities. Among more than 150 attendees were experts from Moscow, St.-Petersburg, Perm, Yekaterinburg, Ufa, Izhevsk, Novosibirsk, Yuzhno-Sakhalinsk and other regions of Russia. The participants represented state authorities and local governments, business community, independent associations, think tanks and mass media.
The central theme of the Conference was the role of Russia’s cities and metropolitan areas in economic development of the country, and the measures necessary for strengthening their financial independence and self-sufficiency. The theme was in the focus of the keynote speech delivered by A. Kudrin who heads the Committee of Civil Initiatives and the Center for Strategic Research.
The keynote speaker presented his proposals with regard to the new model of a metropolitan policy, since it is major cities and metropolitan areas that can become the drivers of economic growth. A. Kudrin emphasized that the new commitment to increasing the role of metropolitan areas and ‘million-plus’ cities should not mean a complete departure from the programme for support of mid- and small-sized cities. He also noted that, in the coming years, the outlook of economic growth of cities and metropolitan areas can be better than the national average, e.g. the growth of 5-7 percent compared with the national average of 3-4 percent.
The discussion continued at the first panel session on the Role of Cities and Metropolitan Areas in Economic Development. The event was moderated by Ye. Yasin, Academic Supervisor of the HSE.
The presentation made by N. Kosareva, President of the IUE, at the panel session focused on the results of the research carried out by the IUE experts to explore the potential of economic growth in Russia’s major cities and metropolitan areas, and on the measures to be taken to provide for a wider margin of discretion and broaden their financial capability towards their further development. The expert emphasized the dysfunctional pattern of a ‘city-to-region’ delineation of responsibilities, and proposed not only to enable the cities to regain their responsibilities but also to expand their scope. The widest margin of discretion should be given to 18 major municipalities being the center cities of the largest metropolitan areas. It is also important to build up a system of inter-municipal governance for addressing cross-cutting issues related to the mentioned above cities and another two largest metropolitan areas – Moscow and St.-Petersburg. As a means of replenishing the budgets of major cities and revitalizing their economies the IUE proposed to reassign a corporate property tax to their jurisdiction, and also additionally provide federal special-purpose transfers on a competitive basis. “The economic growth in major cities, eventually, will help create, on a national scale, the resources required for supporting other cities and rural settlements,” N. Kosareva summed up.
A further highlight of the event became the participation of representatives from regional centers. A. Koryukov, Deputy Head of the Yekaterinburg City Administration spoke on the development of cities and metropolitan areas. The speaker emphasized the importance of giving cities a wider margin of discretion on crucial issues within their jurisdiction. Another speaker, P. Noskov, First Deputy Minister of Economic Development and Investments of the Perm Krai (Region) informed the audience about effective cooperation between regions and municipalities, including in attracting investment, and stressed the need to financially motivate cities to make viable investment decisions.
Some other leading experts in economic development of cities and regions expressed their positions on a spatial policy, a city’s specialization, and local governance issues. Specifically, M. Dmirtriev, President of a business partnership “New Economic Growth”, shared the findings of spatial distribution dynamics assessment of industrial enterprises over the entire period of market relations development. The assessment shows that large and medium-sized businesses clearly gravitate towards metropolitan areas offering attractive business environment. L. Limonov, Director-Coordinator for Research Programmes, ICSER “Leontief Center”, reported on cluster analysis of cities and also touched upon important theoretical aspects of cities’ and metro areas’ development. E. Markvart, President of the European Club of Experts in Local Self-Governance, in his report indicated the major trends in legal environments for the development of local self-governance which, for now, appear to discourage rather than support local initiatives.
The second panel session on Urban Development of Cities and Territorial Transformation in Russia was devoted to the discussion of legal and economic aspects of the implementation of urban redevelopment programmes and projects, the best practices of Russia’s and the world’s cities, the new priorities and instruments of urban planning policy designed to improve urban environment. The session was moderated by A. Chernetskiy, First Deputy Chairperson of the Council of the Federation Committee on the Federal Structure, Regional Policies, Local Self-Governance and Affairs of the North.
T. Polidi, the IUE Executive Director, focused her presentation on issues and challenges related to urban development of Russia’s cities and, inter alia, justified the importance of developing economic tools for land rent management so that to provide for a higher independence of cities – including that from investment interests – as part of the public urban development policy. Then, T. Polidi dwelt on cross-cutting issues related to renovation of urban areas and shared by all cities. The speaker stressed the need for elaborating new practical approaches to setting requirements to quality of urban environment for renovation of built-up areas, when preparing urban planning regulations. She also highlighted the need for finding a solution on building up a more diverse road network adjusted to spotty residential development, and for widening the range of objectives for the renovation, which, along with liquidation of dilapidated buildings, should aim at enhancing the diversity of housing, consumer- and business services in cities.
S. Lyovkin, Head of the Moscow Urban Planning Policy Department, told the audience about the new quality standards of urban environment and housing under the Moscow housing redevelopment programme. He specifically noted not only the improvement in the quality of housing but also new opportunities for growth of small businesses, as well as for changes in public transport routes that will become more convenient, for a shift to the use of high-tech meters of electricity, heat and water, dispensing with the need of taking meter readings by tenants.
N. Antipina, Secretary of State, Deputy Minister of Construction, Housing and Utilities of the Russian Federation spoke about improvements in business environment in the sphere of urban development. She noted the decrease in the number of construction-related administrative procedures, many of which became delivered in electronic format. And by the end of 2017 an exhaustive list of administrative procedures in housing construction can shrink from 134 procedures – at the time of its approval in 2014 – down to 107. Improvements were recorded in the level of satisfaction with the work of the authorities issuing construction permissions. According to Antipina, the level of satisfaction scored 4.3 points on a five-point scale. At the same time, Antipina highlighted the importance of a strategic objective for reducing time-limits for passing a procedure as having priority over ‘unreasonable’ reduction in the number of procedures because exercising proper control over the process of construction is a crucial task of state regulation.
Other experts, who took the floor, spoke about the development of built-up areas (V. Alperovich, Adviser to the Governor of Sakhalin Oblast), the preliminary results of the implementation of regional programmes for resettling people from hazardous housing (O. Rurin, Deputy Director General of the Housing and Utilities Reform Fund), education in urban studies and planning (A. Novikov, Dean of the HSE’s Graduate School of Urban Studies and Planning).
The third panel session on Housing Construction and Diversity of Approaches to Satisfying the Housing Needs was moderated by N. Kosareva. The panel debated the changes in legislative regulation of equity construction, new strands of housing policy designed to ensure affordable housing options, including the implementation of regional programmes and mechanisms for financing rental housing market, and provision of housing for ‘waiting-list’ households.
N. Nikolaev, Chairperson of the State Dumas’ Committee for Natural Resources, Property and Land Relations highlighted the purposes for changing legislative regulation of equity construction. The main purpose consists in enhancing the accountability of those developers who use the funds of individuals. According to the speaker, effective enforcement of the amended legal regulation of equity construction will resolve, within a three-year period, 90 percent of the problems facing equity holders. The Conference participants also had the opportunity to hear the view on reforms in equity construction from one of the major developers – A. Krukowski, Head of Brusnika Company – who proposed to draw upon bank regulation when dealing with regulation of developers. Speeches made by N, Nikolaev and A. Krukowski generated a vivid debate on how to strike a balance between the interests of developers and buyers.
A presentation by G. Poltorak, Vice President of the Russian Guild of Realtors and President of SC BEST-Nedvizhimost, was devoted to the important task of developing a civilized rental market. The expert spoke about the new opportunities that may be brought about for people, cities and business community through the development of this new market form designed to satisfy the housing needs of citizens in Russia.
K. Zakharin, Managing Director, Agency for Housing Mortgage Lending, briefed the audience on the basic programmes run by the Unified Development Institution in the Housing Sector. G. Nevostruev, Director General, the Fund for Development of Housing Construction of the Republic of Bashkortostan, elaborated on the approaches used in the region to ensure the provision of housing for ‘waiting-list’ households. Besides, he raised the issue of enhancing legal regulation of equity construction with due account for the specificity of non-profit developers being established by public authorities in order to address housing problems of some groups of population.
At the conclusion of the panel session, A. Puzanov, Director General of the IUE, shared the IUE’s experience in drawing up housing balance plans for the Russian Federation and Moscow which serve to implement a housing policy balanced on basic parameters and differentiated according to a situation in each city and region.
The final fourth panel session on Urban Infrastructure Management and Beautification of Urban Environment focused on new priorities of enhancing the beautification of Russia’s cities, improving the quality of housing, creating a modern barrier-free built environment, developing tools for attracting private investment and bank finance to housing and utilities sector. The session was moderated by V. Lesnoi, Senior Vice President, AKB Rossiiskiy Kapital.
A. Sidyakin, First Deputy Chairperson of the State Duma’s Committee on Housing Policy and Housing and Utilities Sector outlined the main challenges associated with beautification of Russia’s cities. The speaker stressed the particular importance of the priority project “Formation of Comfortable Urban Environment” launched in Russian cities.
Further presentations, also dealing with urban beatification, were made by A. Baturin, Deputy Chairperson of the Public and Business Council for the Project “Housing and Utilities Sector and Urban Environment”, and, at the same time, a board member of the National Initiative “Live Cities”, and by S. Chistyi, Vice President of the National Charity Fund “A City Without Barriers” established to support the adaptation of urban environment to the needs of people with limited mobility. A. Baturin stressed the importance of citizens' involvement in the decision-making process and the projects related to modernization of urban environment, since, in the opinion of the expert, urban environment implies, primarily, communications that help develop traditions and general culture within a given territory. Design of facilities should take place along with drawing up of social scenarios. The comfort of urban environment largely consists in providing people with the opportunity of rendering different types of services to each other. S. Chistyi described the international practice in building up a barrier-free urban environment and indicated the possibility of avoiding the mistakes made by other countries.
I. Gentsler, Head of the IUE’s Housing Sector Project of the Urban Economy Department, made a presentation of a concept ensuring a better management of apartment buildings (ABs) by empowering co-owners of common property in ABs and strengthening their accountability. D. Novomeiskaya, Head of the Housing Department with the Ministry of Housing, Utilities and Energy of the Udmurtian Republic spoke about one of the first cases of organizing capital repairs in ABs through borrowing.
The issues of attracting investments to utilities sector through concession agreements were highlighted by S. Kasatkin, First Deputy General Managing Director of NOVOGOR-Prikamye LLC. V. Prokofiev, Head of the Urban Economy Department, announced the results of the assessment of transparency of water and wastewater public utilities carried out by the IUE’s experts in 2016 and 2017, as commissioned by investors.
The Conference participants were offered a unique chance of familiarizing themselves with a new issue of the IUE’s “The City Almanac” focusing on the most pressing issues of urban economy and municipal governance, and, inter alia, housing policy, utilities, housing construction and urban development. The Conference and the City Almanac were financed through the IUE Endowment.
The IUE thanks all the participants of the Conference for taking part in the event, for their meaningful reports and discussions. We are particularly grateful to the donors who contributed to the IUE Endowment and, thus, not only gave us an opportunity to conduct research on vital issues of urban development but also enabled us to present the research findings to the expert community, state authorities and local governments, business associations and non-government organizations.