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Five Years of the Far Eastern Hectare: Entering the Agglomeration Phase
7 September 2022
10:00—11:30
KEY CONCLUSIONS
Russian like owning large land plots

In fact, the feeling of owning the land and belonging to one's region is extremely important for our fellow citizens. And that is why 70% find this programme attractive — Marat Shamyunov, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic.

The Far Eastern hectare is not just a solution to some economic and social problems. I think that this is a ‘sacred’ issue in a way. The question of land in Russia has always been a headache – and not just in Russia... on average 14% people want to acquire land under this programme in Russia. And in the Far East, it is up to 27%, which means that every fourth person is ready to claim this land — Sergey Karginov, First Deputy Chairman of the Committee of the State Duma of the Federal Assembly of the Russian Federation on Development of Far East and Arctic.

Hectare users join forces

One of the most obvious trends is agglomeration. Those plots that were issued without any infrastructure, without appropriate opportunities for some kind of balanced development, are naturally less attractive today, to say the least. This probably explains the rather sharp discrepancy between applications and registered land plots — Kirill Bychkov, First Deputy Chairman of the Government of the Republic of Sakha (Yakutia).

Many participated in the programme in order to join forces and form a group so that they could receive infrastructure support. Of course, the state is not abandoning these obligations. But at the same time, we must understand that in order to use resources more efficiently and to support the most in-demand agglomerations – now 363 agglomerations fall under these criteria, and 10% have already received support. First of all, it is road construction and electricity — Marat Shamyunov, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic.

It is necessary for the public authorities to proactively prepare local area planning projects. In such a planning process, there may be different variations in the layout of these territories. As soon as we go inside these territorial communities, we see that there is a problem of common property. Everyone drew a plot of land for themselves, then looked around: we need a road! And where will it come from? Will each of us pluck a piece of our hectare to make this road? Or the public authorities think about it beforehand and say: the road will pass here — Alexander Puzanov, General Director, Foundation Institute for Urban Economics.

Men have been the most active, primarily looking for opportunities to build homes

It is now possible to get a hectare for free, under a simplified procedure, in 18 regions of our country. There are 225 million hectares available. How are the applications distributed by areas that people choose? 42% go for individual housing construction, 34% choose agriculture, 10% pick entrepreneurship, and 7% claim recreation and tourism — Marat Shamyunov, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic.

Russia is ahead of its time and has created best practices for finding, selecting, and registering rights to land plots. A barrier-free tool for obtaining a plot of land has finally emerged — Oleg Skufinskiy, Head, The Federal Service for State Registration, Cadastre and Cartography (Rosreestr).

Over 100,00 Russians claimed their plots

Over 111,000 people have already taken advantage of the programme and 73,000 hectares of land have been allotted. What is the portrait of an average hectare holder? What kind of people choose these plots and participate in this programme? They are men, on average they are 44 years old. Among the top five regions in terms of applicants are Primorye Territory, Yakutia, Sakhalin Region, Khabarovsk Territory, and Amur Region. If we take other territories from outside the general area, most people are from Moscow, the Moscow Region, St. Petersburg, Krasnodar Territory, and surprisingly enough the Sverdlovsk Region — Marat Shamyunov, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic.

ISSUES
Despite the demand there are subsequent rejections

111,000 recipients. Let us take a closer look: 14% expressed their desire, and only 100,000 acted on it. Did we reach our goal? I do not know yet! But we have not set any criteria. And what should the result be? 1 million? 2 million? 3 million? If we take historical examples of global reforms, like the Stolypin reforms, 3 million were relocated beyond the Urals. Of them, according to various estimates, from 17 to 25 percent went back, because the living conditions were terrible! And that was in czarist Russia, when owning a stove, a hut, and a horse was already considered good living standards. And what of our spoiled kids today? They give up the Internet, communications, heat, a warm toilet, and so on, to come close to the land – and of course they go back! The number of refusals that exist today is quite large, and we need to pay attention to this — Sergey Karginov, First Deputy Chairman of the Committee of the State Duma of the Federal Assembly of the Russian Federation on Development of Far East and Arctic.

The five-year period is coming to an end for hundreds of hectares, and we are already moving into the mode of registering ownership or full-fledged lease of these land plots. After five years, we can see that the proper registration of plots is actually an order lower than the contracts that come out for re-registration. If we look at the reasons for such refusals, one of the main ones is the loss of interest in the hectare. It is the problem of permitted usage, the lack of infrastructure. And we understand that in the Far East, given the distance and the specifics of the land, the cost of building infrastructure is prohibitive. It is the lack of comfortable financial instruments to implement on this hectare the original intentions that gets in the way — Evgeniy Chekin, Chairman of the Government of of Kamchatka Territory.

The hectare cannot be used as collateral for mortgage

It seems to me that the main problem is that the hectare still cannot be pledged as collateral. As long as it is not pledged as collateral, it is impossible to take out a mortgage or anything other than a consumer loan. And will the to build housing come from? Five years or not – a lease, even if it is for five years, does not allow a bank to issue a mortgage. This is the main thing! It is like an HCC share: as long as the share is not the subject of collateral, no HCC in our country will ever develop — Nikita Stasishin, Deputy Minister of Construction, Housing and Utilities of the Russian Federation.

Hectare holders have conflicting interests

There is an important aspect to remember that the transport infrastructure is the means of getting close to the territories. But we understand the properties of land plots, the intended purposes of those hectares are completely different. We understand that in fact we should not look at these agglomerations from the outside. We should look at them from the perspective of planning schemes and intra-site transport networks — Evgeniy Chekin, Chairman of the Government of of Kamchatka Territory.

SOLUTIONS
Housing requires roads and electricity

If we are talking about a really well thought-through location – and this is very important for residential development – our task main task is to provide infrastructure and land plots. First and foremost, it is electricity and roads. Without these two components, no housing construction will develop — Nikita Stasishin, Deputy Minister of Construction, Housing and Utilities of the Russian Federation.

Additional discounts could further promote the hectares

We have a lot of land. We have to be honest and give people the land that is in demand. Probably, we need to think together about providing something apart from a chance to pick a plot of land. This territory must come with infrastructure, all the issues related to spatial planning must be resolved there. There must be social infrastructure, so that people could plan their lives for the long term, so that they can see that future prospect immediately with the choice of this or that site. Support measures are needed, and without support measures, there are refusals and land remains undeveloped — Oleg Skufinskiy, Head, The Federal Service for State Registration, Cadastre and Cartography (Rosreestr).

It is not just about the money. Money was given by the government of tsarist Russia, and in Soviet times there were subsidies, and now there are subsidies... Obviously, additional benefits are necessary in order to stimulate this relocation — Sergey Karginov, First Deputy Chairman of the Committee of the State Duma of the Federal Assembly of the Russian Federation on Development of Far East and Arctic.

If we supplement the basic programme with support from the regions – and such measures certainly exist – then a whole menu of support for hectare owners is created, which gives us additional tools to help them. Far Eastern mortgage is a good example. To date, 282 loans have been granted as part of the Far Eastern mortgage to participants in the Hectare programme — Marat Shamyunov, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic.

Agglomerations can be broken down by type and offered to hectare seekers

When granting a hectare, in addition to showing the location it is necessary to give a list of existing housing projects. I am talking projects which have passed the examination, with a clear understanding of the cost, and the investment price. The most important thing is the location, because otherwise it is very expensive to extend networks and roads in places where land is not needed. It does not make any economic sense for the municipality. And then, after people have settled there, the social infrastructure will appear... We must understand that without kindergartens, schools and clinics, if we consider this programme as a whole, nothing will be implemented — Nikita Stasishin, Deputy Minister of Construction, Housing and Utilities of the Russian Federation.

A bank of model projects allows us to go further. Currently, only 1.5% of residential housing is being built from prefabricated houses, we need to reverse this trend. And it makes no sense to extend the road to one hectare, so we are also in favour of agglomerations — Alexander Levintal, Managing Director for the Far East, DOM.RF.

Agglomerations need to be divided up. We need to distinguish the residential housing sector, because it will have its own specifics and way of life; the agricultural sector: we understand all the particularities and the consequences of agricultural production, as well as the disadvantages it may present to other uses. And then there is the tourism sector: it has its own way of life. This means that we have to target tools for each type of use — Evgeniy Chekin, Chairman of the Government of of Kamchatka Territory.

Public hearings will help hectare owners find common ground with each other

Very often we are dealing with the arrival of new population to the territories that have already been used in a certain way by residents of nearby settlements. And public hearings in this case prevent potential conflicts — Alexander Puzanov, General Director, Foundation Institute for Urban Economics.

People could benefit from simple explanation of the hectare benefits

In addition to the hectare, we have to explain to people what they can actually build and how it will be better than buying an apartment in the city. I think this is primarily the task for the Governor and the Ministry of Far East Development. Until we start explaining to people, we will continue to brag about statistics and figures: here, we have provided a hectare, we have done well ... And how it is better than a one-room apartment with a mortgage? As soon as we start explaining to our people, everything will definitely get better — Nikita Stasishin, Deputy Minister of Construction, Housing and Utilities of the Russian Federation.

The material was prepared by the Russian news agency TASS