Experts believe that the effect of FZ-494, which came into effect on December 30, 2020, “On Amendments to the Urban Planning Code of the Russian Federation and Certain Legislative Acts of the Russian Federation in order to ensure the integrated development of territories” or, as it is also called, “the law on All-Russian Renovation”, may have an ambiguous effect on the development of regions and the formation of residential urban development in it. In particular, they see one of the main risks in the massive problem of real estate appraisal in the country.
Already on the example of the Moscow Renovation, the difference in the approach to the appraisal of real estate objects and the payment of compensation expected to the owners was noted.
Several major problems may arise in this regard. Firstly, in the regions, the list of demolished houses will include not only five-story buildings, but a wide variety of types of real estate. Changes within the list of objects can be colossal: there may be not only dilapidated and dilapidated housing, but also houses that, in fact, do not have one hundred percent signs of deterioration (the law provides for such a criterion). The decision on their introduction will be made by the federal leadership or the heads of municipalities. And this is the second problem of the current law – the empowerment of local authorities. In this regard, there is a risk of underestimation of such objects as part of the process of transferring them to municipal ownership for renovation, as well as how the owners of current real estate objects will receive compensation.
“One of the scenarios for the development of events may be a large number of litigations between the owners of these objects and the authorities of the level within which the property will be assessed and the house will be included in the renovation list,” predicts Vyacheslav Rozhmanov, CEO of the investment company R2 Asset Management.
In addition, in terms of the implementation of the new law, neither the mechanism for transferring land plots from the city to the developers who will build up the launch sites nor the choice of the contractor have been worked out. Of course, any city, regional center or region will be the largest land owner of such construction. But under what conditions it will issue plots and by what criteria to choose a developer: whether it will be an option for a large federal player, ready to transfer its franchise to local developers who have experience in building and doing business in the region according to certain standards, or another option, is still unclear. It is important to understand that in a large number of regions of Russia, today, there are only a few developers or builders who continue to conduct this business effectively. At the same time, the volume of construction is planned to be colossal: only in the largest cities of Russia, such as Novosibirsk and Ufa, it is about 5-6 million square meters of commissioning. And someone will have to implement them. The main difficulty here is not only in achieving an indicator of 120 million square meters of housing, but also in terms of time, which will be allotted for the implementation of the federal program: if the pace of commissioning will be stretched over a long period of time, then the task seems feasible. In this case, the term will also affect the reduction in the cost of apartments sold in the regions, because the volume of supply will be significantly larger.
However, the law has one significant plus: the integrated development of territories. The main ideology of 494-FZ, according to the lawmakers, is to improve the infrastructure of cities, change and improve the quality of life and social security of citizens, including filling the territories with public and commercial infrastructure.
“In this respect, I see a significant plus: the emergence of qualified retail facilities and street retail in new buildings, which is significantly different from those that are currently located in dilapidated housing,” says Vyacheslav Rozhmanov. Taking into account that the program will include construction objects not only in the 1970s or 1955s, but even in the 1900s, two-three-storey buildings, where, in principle, there was no commercial infrastructure, or it appeared on the spot apartments on the first floors, not designed for the planning solutions of street retail, with the lack of hall opportunities, the renovation program will radically change the commercial infrastructure of the Russian province, and the cities will receive high-quality and modern development of territories for a comfortable life.
