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. Last Updated: 07/27/2016

Moscow Sees Homes In Industrial Zones

Where factories and warehouses now stand, Muscovites may soon be decorating their new homes or buying the latest gadget to hit the market, as the city prepares to start an enormous revamping of industrial land aimed at plugging the gap in the supply of housing.

City officials envision a modern glow encapsulating the 80 industrial districts peppered throughout the city, as they come to terms with the poor way of regulating land use they say they inherited from the Soviet era.

Nadezhda Spiridonova, a spokeswoman for the department of city planning, development and reconstruction of the city of Moscow, which is helping to oversee this effort, said last week that it was not that the city wanted to wipe industry off the map. Instead, she is quick to call this a reorganization - a way to better evaluate whether land is being used efficiently.

After reviewing the various parcels of land, the city will make recommendations as to how to handle any excess land - or how to augment existing configurations. As they scan these areas, they will keep an eye out for vacant sections of industrial lots and develop a plan for adding to the stock of residential units, or, in some cases, commercial development.

The city's proposal would be submitted to the owner of the land, who would be strongly urged to follow their guidelines. Asked what would happen if the owner refused, Spiridonova said that it was expected that no owners would do so. In many cases, the city is the owner and will work to put abandoned land to use.

Skyrocketing real estate prices have helped to create a dearth of affordable housing, and by entering into the housing market in such sweeping fashion, the Mayor's Office would become an even bigger player in the real estate industry.

But details of the new plan to maximize available space in order to create new units remain hazy.

Federal and city laws give authorities the right to take over private property for construction, but they do not currently allow for apartment buildings to be built on land seized without the owners' consent.

A bill currently under review in the City Duma would make it easier to claim land for development or major government programs and city contracts. City Hall wants to expand that to include apartment-building construction. Evicted residents must be compensated with equivalent living quarters under Russian law, but city officials say the aim of the project in question is not to evict.

"The laws are complicated in Moscow," said Yana Khmeleva, a real estate lawyer with Jus Privatum.

The cranes and wrecking balls that are synonymous with the city's well-documented construction boom may soon be joined by even more, as developers tear down the old and build anew as part of this new citywide vision.

Detractors of the mayor's latest proposal say they fear it will spur city officials to bully property owners into making changes they have no desire to make.

With real estate prices doubling in the last year - and high costs permeating other sectors of the economy - the lack of affordable housing has forced would-be homeowners to be creative about finding space for residential use. The Mayor's Office has also been critical of the lasting effects from government-subsidized housing and subsequent privatization, allowing some to gobble up far more space than they need - well above what they could afford at market rate - leading to an inefficient distribution.

The city is certainly no stranger to handling large-scale real estate endeavors. In the 1990s, the city government helped facilitate privatization and has owned as much as three-quarters of the city's housing stock in the interim. Still, the city has frowned on ownership, preferring to play the role of landlord.

"The law does not forbid private property as it would violate the federal codes, but shows its negative attitude towards it," Khmeleva said.