Comparative analysis of the functional behavior of costs for the construction of housing of the economy and comfort class

Olga Grushina,Natalia Shelomentseva,Nina Poliakova,P Vitaliy Vladimirovich

doi:10.1051/matecconf/201821209001

Olga Grushina, Natalia Shelomentseva + Show 2 more

Open Access

https://doi.org/10.1051/matecconf/201821209001

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Abstract

The article considers the issue of increasing the investment attractiveness for the developer of massive construction of economy class housing by possible coverage of costs and formation of satisfactory financial results. The application of mathematical apparatus of the derivation of linear function and margin analysis allowed us to determine that in practice the developer companies solve the problem of low profitability of the economy class housing at the expense of more expensive comfort class housing objects, manipulating with the distribution of fixed costs. As a result, the possibility of covering the general management costs of the developer from one meter of housing of any class is equalized. The solution to the problem is seen in the creation of a database of standard economy class housing projects with the mandatory allocation of variable and constant construction costs for each type of facility per square meter of the completed housing. Such data will allow construction companies to take full advantage of the opportunities of margin analysis, including determining the lower limit of the price of a square meter, breakeven output and the financial result of both a single object (margin revenue of an object) and the organization as a whole for the reporting period. However, the market approach only will not solve this issue: the state support through the financing of the governmental programs will provide affordable housing for citizens.

Highlights

The right of every citizen to housing enshrined in Article 7 of the Constitution of the Russian Federation cannot be provided by the "invisible hand" of the market
Mortgage was not a panacea: its rapid introduction in the mid-2000s led to an rapid rise in housing prices and the enslavement of hundreds of thousands of families in long-term debt slavery, which threatens with poverty and loss of a roof over one’s head at any time at the economic crisis, that is accompanied by higher rates and the fall in real incomes of citizens. Understanding this has led to the creation of a number of governmental programs and subprograms aimed at solving the issue of providing
The trend to reduction of the key targets for the implementation of governmental programs touched upon the program aimed at providing affordable housing for the Russian citizens

Summary

Introduction

The right of every citizen to housing enshrined in Article 7 of the Constitution of the Russian Federation cannot be provided by the "invisible hand" of the market. The reduction, in particular, affected those indicators that are contained in the Decree of the President of the Russian Federation of May 7, 2012 No 600, namely: "Decrease in the cost of one square meter of housing by 20 % by increasing the volume of commissioning of the economy class housing”, and "Providing affordable and comfortable housing for 60 % of the Russian families, who want to improve their living conditions". Such a situation challenges not brilliant results of the implementation of this governmental program. A preliminary analysis of the existing official and semi-official definitions of the economy class housing, and the dynamics of key indicators related to the possibility of increasing housing affordability, will show the current trends in this sector of the economy

Dynamics of the main indicators of housing affordability

Variable costs

Findings

Conclusion