Property without Markets: Housing Policy and Politics in Post-Soviet Russia, 1992–2007

Abstract

Privatization of housing in Russia since 1992 has created a society of homeowners but failed to convert private property into a market commodity. Radical reformers under Yeltsin mistakenly thought housing markets would emerge naturally once property was privatized and prices were freed. The Putin administration has recently attempted to boost the housing economy as well as the government's legitimacy through a pro-natalist policy intended to make housing more affordable for young families via subsidized loans. Still, private construction and mortgage financing remain miniscule, meaning that most Russians' housing conditions are a function of inheritance from state or family, not of their market positions. Housing has become a source of personal suffering and political discontent among Russians who question the justice of a system which eliminated entitlements without providing affordable market alternatives. This article traces housing politics through three periods: privatization (1992–1994), property without markets (1995–2003), and state-sponsored markets (2004–2007). The Russian case highlights the distinction between property and markets — the former can clearly exist without the latter, particularly in the case of housing markets, which require extensive government coordination to provide liquidity and transform personal property into a market commodity.