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. Last Updated: 07/27/2016

Authorities to Act on Land Allocation

The Federal Anti-Monopoly Service will soon file up to 1,000 court cases seeking to declare land allocations for residential construction without open auctions illegal, Igor Artemyev, the head of the service, said last week.

Only 9.9 percent of land for residential construction in Russia has been allocated through open auctions since the auction requirement was introduced, Artemyev said in comments reported by Interfax. The requirement was introduced in October 2005.

First Deputy Prime Minister Dmitry Medvedev said last week that corrupt officials were making a profit by preventing open auctions of land, putting in danger President Vladimir Putin's goal of making housing more affordable for the public.

"There is a catastrophic shortage of housing and land has become a source of gain for a huge amount of civil servants," Medvedev told the executive council set up to carry out Putin's four priorities for the country, known as the "national projects." The remarks were broadcast on Rossia state television.

Many Russians are unable to buy their first apartment or upgrade because prices are surging, wages are still low and the national mortgage industry is underdeveloped. Moscow apartment prices may rise more than 40 percent this year, setting a record, Vedomosti reported in February.

Regional and municipal governments are violating the law by not permitting open land auctions, Medvedev told the executive council. The construction market is also highly monopolized, he said.

"Serious efforts are needed to de-monopolize local construction markets and for ensuring competitive procedures" during the sale of land, he told the executive committee.

Russia is to spend about $6 billion this year on Putin's priorities, which are housing, health care, education and agriculture. Spending on housing is to increase fourfold, the largest jump among the four areas. Putin has repeatedly called on the government make sure the money is not wasted.

Putin is seeking to use higher-than-expected revenue from oil sales to boost living standards before national parliamentary and presidential elections in 2007 and 2008. Russia will increase spending by about a quarter this year.

(MT, Bloomberg)