Poor level of land resources recording and control leads to abuse and criminal offense in disposal of land plots. During the period of 2005–2009 many officials were charged with abuse of their authorities: Mayor of Fryazino, Moscow Region (allotment of land plots for construction on a non-tender basis); Mayor of Scherbinka, Moscow Region (abuse of office in the sphere of land plots disposal); Mayor of Togliatti (unlawful disposal of land plots in 1992–2003); Mayor of Tomsk (unlawful allotment of land plots); Mayor of Saratov (unlawful distribution of land plots); Mayor of Volgograd (unlawful allotment of land plots) and others.
The problem of low level of recording and control in the sphere of land use is also a big problem. Given the system of cadastral records the error makes 20%, i.e. 341. 96 mln ha out of 1,709.8 mln ha.
Federal Law No.№66-FZ “On Amendments to Certain Legal Acts of the RF and Invalidation of Certain Legal Acts (Clauses) of the RF in Relation with Enactment of Federal Law On State Real Estate Cadastre” of May 13, 2008.
In addition, an attempt was made at the end of 2008 to decrease unjustified high costs of titles/encumbrances registration for agricultural land plots. Thus, the fee for registration of a share in land was reduced 10 times.
Institutional Problems The government practically removed itself from the sphere of territorial development.
There is no systematic and planned development of infrastructure (utilities and road construction). Lack of land plots prepared for construction causes the construction costs growth and increase of load on the existing infrastructure. This leads to “pin-point” increase of population density at the same time leaving significant territories undeveloped.
In view of the above, the priority measures to improve land relations would be creating efficient system of state management of land resources meaning changes in the system of recording and controlling the land resources based on assessing the suitability of lands for lifesustaining activities. Valuation of privately owned land should be based not on the total territory of the country, but on the territory suitable for life-sustaining activities. Besides, territories with future development potential should be identified and the required conditions for their development should be created.
6.3.3. Federal and Regional Policy in the Sphere of Land Relations: some specifics Land regulation in Russia has been under on-going change over the recent years, especially starting from 2006. This was the beginning of the so-called “mini-privatization” and “dacha amnesty”, as well as of cadastral recording and cadastral valuation system, decreasing the prices for land bought-out by industrial enterprises, etc. These new endeavors have started demonstrating some yield fruit by now: new institutions are slowly taking shape, and the privately owned land segment is gradually growing. The demand for government services has remained stable and high in the sphere of land relations, it significantly exceeds the capabilities of the existing organizations – especially, given their current performance. However, the “growth points” described above have very little impact on the overall federal and regional land use policy having formed over the last 20 years, and the quality of government services in this sphere remains very poor.
Segmental development may also be observed in the regulation of land use and land acquisition for various purposes. Active housing construction in 2005–2008 resulted in stricter government control of disposing land plots allotted for construction; mechanisms of selling land plots through auctions were introduced. Special focus on agriculture resulted in various forms of government support to agricultural producers including support in the sphere o land use regulations. Leasing agricultural lands from the state turned out to be the only segment of leasing land where the fees were reduced. Simplifying the turnover of agricultural lands was one of the most important novations of the period in question.
At the same time development of only certain segments of land relations does not serve as a driver for improvements in other segments. For example, it is very easy to bypass the requirement of selling state and municipal lands through auctions (and on pretty lawful grounds!) due to fragmented regulation. There is an RF Government Resolution setting the procedure for such auctions, but it is only selectively observed. Out of 12 land plots sold by the state in 2009 only 1 was sold through an auction.
Such “drop-out” of certain land relations segments from the government attention is followed by insufficient way federal power bodies are working with the regions on implementing the decisions in economics and by their systemic lack of attention towards regional land policies, which in certain cases are quite the opposite to the federal policy, or regions may just ignore the tasks set at the federal level or simply be incapable of implementing them. Regional policy is to a significant extent impeding the activities of local self-government bodies RUSSIAN ECONOMY IN trends and outlooks in the sphere of land use depriving them either of authorities or of funds required for implementation of land-related resolutions. Inconsistency of regulatory framework at different levels of government is another important barrier, and often enough the level of regulation at regional level is not sufficient.
In 2007 the Federal Agency for Real Property Cadastre (“Rosnedvizhimost”) audited 375,027 regulatory acts at the level of the Russian Federation constituents (regional level) and at the local level pertaining to land relations. The audits revealed non-compliance with the federal land legislation in 8,093 acts of regional and local level, and 6,522 recommendations were proposed for bringing them in compliance. Out of them 3,947 acts were brought into compliance, in 2,316 cases materials were sent to supervising agencies for invalidation of the respective regional and local acts. In Nizhny Novgorod Region the Prosecutor’s Office initiated enactment of over 200 acts on land use, in Penza Region – 11 draft plot plans and rules of land use and development1. However, this activity does not compensate for poor performance of government regulation mechanisms.
Analyzing land privatization laws evidently shows that such privatization is heavily dependent on the regulatory framework of the RF constituents (regional laws and regulations), which provides for the following:
- establishing the norms for land plots allocation for farming, gardening, vegetable production, cattle breeding and construction of summer cottages (dachas);
- defining the prices for agricultural lands;
- granting the right of free privatization of agricultural lands;
- defining the prices of land plots for owners of buildings and facilities;
- defining the initial prices and format of auctions for selling land plots for construction;
- defining the terms of privatization of smaller and medium-size businesses.
The way regional authorities exercise their rights in this sphere influences the trends in land privatization process greatly, especially in the conditions of lack of municipal property.
In reality certain regions are implementing land relations policy based either on setting significant regulatory and administrative barriers and imposing additional tax obligations on land title holders (especially in the construction sphere) making buy-out of land economically unfeasible (e.g., Krasnodar Region in providing land plots for construction; City of Moscow);
or on drastic shrinking or complete lack of privatization decision powers of municipal authorities due to undeveloped land regulations at municipal level (the majority of the RF regions).
Zero or close to zero privatization performance for municipal lands is practically a common rule across Russia. Centralization of powers at the regional level allows for any constituent entity of the Russian Federation to unilaterally use its powers for disposal of land or control maintaining of the status-quo. Traditional municipal deficit of municipal budgets is an additional barrier for municipal land ownership development. S a result, there are no adequate mechanisms for allotment of municipal lands and no possibilities for real systematic control.
The need for alignment of federal and regional policies in the sphere of land privatization in terms of shaping the policy, identifying the mechanisms and allocating adequate funds, or acknowledged and agreed refusal from privatization concept in certain regions or segments is See text of presentation by Yu. Chaika, General Prosecutor of the RF at the extended meeting of the General Prosecutor’s Office Collegiate Body // genproc.gov.ru, February 18, 2008.
Institutional Problems the key precondition of effective privatization process. The key issue here is substantiated choice of land policy by the region.
The process of shrinking the area of the common legal framework is going on in the same fragmented manner as land relations development. “Special” authorities were granted to power bodies in Krasnodar and Primorsky Regions with regards to withdrawal of land. Taking into account the growing activity of the Russian Federation in implementing international projects, the number of such “special” procedures is likely to increase. State-owned companies and their managing companies were granted “special” authorities in 2007 allowing them to obtain land plots without participation in any auctions/tenders1. Considering all the assets currently controlled by such companies, the market segment being put beyond the general regulations is quite significant. Subsoil users received the right to obtain land plots without participation in any auctions/tenders in December 20082.
Exceptions from the common rules are often needed; however, it’s the message dictating such exception which is of special importance here. Like in the case of setting up state corporations, the message is of quasi-state or quasi-public here and does not demonstrate any positive effect, which makes such exceptions look unjustified.
As for privatization of land, there are no clear-cut objectives and baselines set at the federal level, so privatization efficiency needs to be evaluated based on the overall outcomes (amount of land transferred into private ownership). No assessment is performed with regards to the impact of land ownership status transformation on competitiveness of industrial and agricultural companies, on the level of housing prices, on entrepreneurial activity growth, etc.
To be able to effectively implement land privatization program, its objectives need to be clearly set. If the main objective here is to provide housing to the people, then all mechanisms for construction incentives and support should be engaged (transparent and simplified procedure for provision of land for construction, investment into construction and issue of loans, infrastructure development at plots subject to construction, etc.). Land privatization per se will not necessarily provide for more active construction and decrease of housing prices.
If we are to talk about the agricultural complex, the announced intent is to improve efficiency of land use and to give a new spin to their turnover. However, the legal status of unclaimed shares in land and lands of agricultural producers in bankruptcy is not duly regulated.
And those are millions of hectares of agricultural lands which are withdrawn from turnover.
The procedure for turnover of shares in land received a new, simpler regulation. However, those are the buyers who benefit, and not all of them are farmers. So the new regulatory framework promotes the buy-out – not sustainable development of rural territories and their residents.
The Land Redistribution Fund created in the 90-ies is another “black hole”. Back in those days the lands of agricultural producers (Soviet kolkhozes [cooperatives of farmers] and sovkhozes [state-owned agricultural enterprises]) were transferred to this Fund. As of January 1, 2008, the Land Redistribution Fund comprised 46.6 mln ha, i.e. 11.5% of agricultural land.
New land plots are still being transferred to the Fund at the expense of agricultural producers in bankruptcy, in case the land is not used or is voluntarily rejected, etc. As of January 1, 2009, 15.6 mln ha were registered in cadastre as land in use by manufacturers of commercial agricultural products, at the same time the respective title holders are excluded from the regis Federal Law No.240-FZ “On Special Economic Zones in the RF” of October 30, 2007.
Federal Law No.311-FZ “On Introducing Changes into Certain Legal Acts of the RF” of December 30, 2008.
RUSSIAN ECONOMY IN trends and outlooks ters of individuals and legal entities. During 2008 the area of such land grew by 1.3 mln ha versus the preceding year. This group of land comprised 5.5 mln ha of the shares in land and land jointly owned by individuals, as well as 9.9 mln ha of state and municipal land.
Today the federal laws allow government officials (of both federal and regional levels) to fully use their judgment in disposing the lands of the Fund. They have the right to grant this land in someone’s ownership for free, which potentially may be used as a source of unlawful income for such officials, decrease the level of revenues into the federal and regional budgets and deteriorate the regulation of the land use sphere.
The unclaimed shares in land currently making 25.6 mln ha still remain a “gray zone”.
Their owners either have not received certificates of a share in land or have not exercised their right of disposal of the share.
As has already become a tradition over the recent years, new organizations were set up by the government to compensate for the inefficient regulation of the land relations. They are the Fund for Housing Construction Support and Residential Mortgage Agency.
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