Intergenerational Differences in Russian Housing Conditions in the 2000s: Based on the RLMS (2008)

That Russia's real estate market, beginning with housing, has been developed along with Russia's market-oriented economic reforms is a truth that needs no mention. This study considers the development of Russia's urban housing market as observed from several measures by narrowing the focus to the measure of differences in household spending on housing. As a first research step, this paper uses the 2008 data from the Russia Longitudinal Monitoring Survey (RLMS) for the purpose of clarifying the actual status of housing differences in Russia in the 2000s. With the development of the urban housing market and flow of workers into cities as the result of market-oriented economic reforms, inter-generational differences arose and the purchase of residential housing by young households in particular has become difficult. Interest rates on mortgage loans in Russia are still high, and for low income young families, loans are out of reach. Based on these circumstances, the government implemented policies to provide mortgage loan assistance to young families and promote housing purchases by young households. This paper approaches the effects exerted by such housing policies on residential housing purchases and home improvements by young households, the main purpose of which was increasing the volume of housing loans and housing construction, and attempts to look specifically at the housing problems directly confronting each generation, through clarification of the housing reality by generation based on the RLMS. As a result, it was understood based on several measures that housing differences between generations arose and that, depending on those differences, the housing problems faced by each generation varied. This difference in problems was caused by effects that resulted from the fact the timing of residential housing purchases was segmentalized as the result of a systemic transformation. The difference in particular between the generation that was able to remain in and privatize its housing from the Soviet era, and the generation that had to purchase homes through Russia’s market economy, is substantial. In terms of its real estate industry, housing construction industry, housing remodeling industry, construction materials industry and rental housing circulation, the development of Russia’s unique residential real estate market has occurred in response to the problems confronting each generation. On the other hand, this means the government must devise various housing policies to respond not only to development of the market but also to address each of the housing problems that differ between generations. That is, the government must shift away from a housing policy that emphasized only the promotion of housing purchases and housing construction, and move in the direction of (1) improving circulation of the existing housing stock and promoting systematic expansion of the rental housing market, (2) nurturing housing-related industries that will contribute to the quality aspect of the housing environment and formulating policies to assist this sector, and (3) implementing diverse policy support for not only young households but for each generation. This paper draws this conclusion from the housing demand bracket problem, based on an analysis of the RLMS.