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Housing Question in Capitalistic Russia

Housing Question in Capitalistic Russia
German Safronov 30.09.2008

Housing question is included into a number of the most significant social questions. Its roots proceed from the process of growth of urban population that causes special form of housing need. It is generated during epoch of capitalistic socioeconomic structure when the dwelling turns into the goods. Galloping increase of a rent and sharp deterioration of living conditions for the majority of people are consequences of this process.

Politicians and economists being apologists of capitalistic socioeconomic structure as the reasons of existence of housing need name such as low rates of housing construction, monopolization of the market of habitation, absence of the effective mechanism of hypothecary crediting, etc.

We think that enumerated factors are not the reasons of housing need. They can act as consequence of the basic reason of a problem of housing need. We shall consider in the enlarged variant the list of charges on construction of apartment house only from technical point of view. These charges should cover:

1) Cost of building materials;

2) Deterioration of building engineering;

3) Alimentation of workers for the period of construction.

Such purely technical approach does not take into account that circumstance that the process of construction, as well as any another process, associates with the process of assignment of a surplus value. Therefore to above mentioned expenditures on building construction the following ones should be added:

4) The cost of the ground area;

5) Percent on the invested capital.

The last article of expenditures - unpaid labour of the workers. This very circumstance motivates investors to be engaged in construction of habitation. The specified costs are paid to the builder by the house owner therefore he receives an object as a house with long enough service life.

At appropriate care this term can make 40 - 50 years. The marked feature of the object got allows the house owner to sell its use value in parts by way of rent of the object. The house owner receives payment for the rent which goes on compensation

1) of the cost of running repairs for maintenance of a house and its systems in proper condition;

2) of percent of expenditures spent on construction of a house;

3) of the average cost of the not-paid rent, losses from empty apartments, etc.;

4) of the annual amortization of the capital invested at construction of a house;

5) of the ground rent.

Thus, income of the house owner is being formed from the following:

1) A surplus value received from exploitation of labour of builders. It can be appropriated completely by one capitalist if in he composes house owner and builder or is divided between them.

2) A surplus value from exploitation of labour of repairmen (mechanics, electricians, house painters, plasterer, etc.);

3) Ground rent if the house owner is the proprietor of the ground area on which his house is built;

4) Economy on depreciation charges, that is on annual repayment of the capital invested into construction if falling of prices for corresponding materials and technics is observed on the market.

Similar picture is observed also in sphere of municipal services as the last are the same goods for capitalists, as well as all others. But different to a building sphere time of turnover of the capital of municipal services is smaller as water, gas, the electric power, heating are included constantly into the process of consumption and should be reproduced continuously. It is anatomy of a rent.

Opposition in the process of exchange of two parties is evident: the house owner and the supplier of municipal services - the consumer. These parties are interconnected by relations characteristic between the seller and the buyer. Working population of cities are the consumers in the discussed process of exchange. Wages are the source of their income, while the rent and municipal services enters into production costs of their labour.

Depreciation of labour is a natural and constant aspiration of employers, that also quite naturally faces resistance on the part of the organized struggle of working class. As a result of this unity and conflict of opposites dynamical compromise balance is established. But it, as economic practice of countries with capitalist way of life shows, does not solve problems of housing question. The housing need remains as it is.

If to analyze objectively condition of housing question in such leading capitalistic country of the world as the USA, the growth of a number of homelesses which are compelled to use elderly parents, relatives, the doss houses frequently equipped with two-story beds could be seen.

During the period from 2001 to 2002 in 18 large cities of the USA a number of requests for granting of beds in doss houses increased on average on 20%. According to Labour Department of the USA in July, 2003 there were registered in the country about 3,5 million citizens who, not having means for payment of rent, were compelled to go to live in doss houses. In the largest city of the USA New York a number of homeless families during the period from 1999 to 2002 increased on 40%.

The situation of housing question in the USA described is caused by the fact that prices for the real estate steadily grow in such a way that about 28 million American families, that is practically each fourth family, spends more than 30% of their incomes for payment of habitation.

Annual rate of a rise in prices for small houses designed for one family makes 6%. In absolute expression average market price of such small house in 2003 made 167 thousand 800 dollars. The rent for habitation also grows. Thus if the cost of rent is higher than of the specified small house on average made in 1980 481 dollar, in 2000 it reached 602 dollars.

The analysis of housing question in Russia shows that here the lay of things is much worse. About 5 million people have neither house nor home. 4,5 million families require granting of social habitation. The same scale of requiring habitation according to the waiting list.

Besides one million two thousand families wait for granting free-of-charge habitation from the state which undertook the corresponding obligation. Families of military men, veterans of wars, Chernobyl invalids, pupils of orphan asylums, etc belong to such categories of families.

If to sum those who requires habitation, it will turn out that there are about 35 - 40 million people, that is almost a quarter of the population of the country. It is necessary to take into account also the circumstance that as a result of the sped up process of dilapidation of old building it is required to make basic repair of about 300 million square meters of habitation. It's an enormous figure by itself but it has annual tendency of growth making approximately 10%. New apartments being build have so high prices that the majority of the population is not capable to down.

The limit of a rise in prices for habitation is not looked through yet. The reason of developed price housing policy is that a half of the cost of habitation is speculative cost.

Such situation is known to the State Duma of the Russian Federation. Its first vice-speaker Oleg Morozov publicly declared: "Prices in the market of habitation are absolutely not market ones, they are speculative". The statement of Mr. Morozov does not let daylight into the true reason of high prices for habitation and the more so does not give recipe of solving of the given problem. No man on the Earth can specify the line which separates "fair market" from "gamble".

There is steady enough opinion that extremely high prices for habitation are caused by "monopolization of the construction market" and insufficient development of small and medium business in the sphere of construction. Such view on the problem is considered by us as incorrect, in this case consequence is being given out as the reason. According to this point of view monopoly - is bad, competition of small companies - good.

The real situation in cause-and-effect relation between monopolies and small companies develops in such a way that large companies are born from small ones and no antimonopoly law can ever do anything with it. Competition generates monopoly, monopoly generates competition between several monopolies which enter arrangement and establish monopoly prices. This is characteristic feature of imperialistic stage of capitalism.

Thus, peculiarities of capitalistic way of manufacture are the reasons of the highest prices for apartments inaccessible for the majority of population and housing need. Within the framework of such style of economic functioning the state can't essentially solve housing question as the capitalistic social order generates this problem.

Housing question in a modern capitalistic society is solved the same way as any other public question: by gradual economic alignment of supply and demand. Peculiarity of such solving of housing question consists that it constantly generates the question anew. Therefore decision within the framework of capitalistic system is absent.

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