Megacity Final Report by Strelka Institute for Media, Architecture and Design

ОБРАЗОВАТЕЛЬНАЯ ПРОГРАММА 2011/12

STRELKA

EDUCATION PROGRAMME 2011/12

RESEARCH REPORT MEGACITY

ДИРЕКТОР Рейнир де Грааф ПРЕПОДАВАТЕЛИ Лора Бэрд, Анастасия Чернышова, Вадим Новиков СТУДЕНТЫ Филиппо Баццони, архитектор, Милан; Даце Гурецка, архитектор, Рига; Роман Кучуков, архитектор, Самара ; Лам Ле Нгуен, архитектор, Мельбурн; Рикардо де Пиньо, управленец, предприниматель, инженер-эколог, Порту; Александра Смагина, архитектор, Самара; Валерия Чубара, журналист, Москва; Адеола Энигбокан, антрополог, художник, Нью-Йорк ЭКСПЕРТЫ-КОНСУЛЬТАНТЫ Владимир Демидко, депутат муниципального собрания; Барт Голдхорн, издатель и редактор журнала «Проект Россия»; Юрий Григорян, архитектор, руководитель бюро «Меганом», Татьяна Гутц,заместитель директора «Бюро городских проектов»; Алексей Клименко, историк архитектуры; Симон Кордонский, профессор ВШЭ; Алексей Левинсон, руководитель отдела социокультурных исследований, Левада-Центр; Алексей Ложкин, архитектор, главный редактор,«Проект Сибирь»; Ведран Мимика, директор образовательной программы института Берлаге; Александр Морозов, главный редактор «Русского журнала», директор Центра исследований UNIC; Федор Новиков, урбанист, директор «Все в парк!»; Свен Осмерс, KPMG; Борис Пастернак, эксперт по индустриальной архитектуре; Антон Польский (Мейк), художник, активист, основатель Партизанинга; Денис Соколов, глава департамента отдела консалтинга и исследований, Cushman & Wakefield; Ольга Фазулина, KPMG; Марина Хрусталева, куратор, общественный деятель; Елена Шомина, Доктор политических наук, эксперт Совета по МСУ при председателе Госдумы), член Общественного совета при Минрегионразвития, профессор кафедры местного самоуправления Высшая школа экономики (ГУ-ВШЭ ); Рушат хазрат Газзатуллин, заместитель президиума муфтиев России

DIRECTOR Reinier de Graaf SUPERVISORS Laura Baird, Anastasia Chernyshova, Vadim Novikov STUDENTS Filippo Bazzoni, architect, Milan; Valeriya Chubara, journalist, Moscow; Dace Gurecka, architect, Riga; Roman Kuchukov, architect, Samara; Lam Le Nguyen, architect, Melbourne; Ricardo de Pinho, business manager, environmental engineer, Porto; Aleksandra Smagina, architect, Samara; Adeola Enigbokan, anthropologist, artist, New York EXTERNAL EXPERTS Vladimir Demidko, municipal administrator; Olga Fazulina, KPMG; Bart Goldhoorn, founder and editor of “Project Russia” magazine; Yury Grigoryan, architect, head of “Meganom” bureau; Tatiana Gutz, Deputy director, “Urban projects bureau”; Alexey Klimenko, architecture historian; Simon G. Kordonsky, Tenured Professor Higher School of Economics; Marina Khrustaleva, chairwoman of the Moscow Architecture Preservation Society, MAPS, “Archnadzor”; Aleksey Levinson, director for social and cultural research, Levada Center; Alexander Lozhkin, architect, editor-in-chief, “Proekt Syberia“; Vedran Mimica, director of Studies of the Berlage Institute; Alexandr Morozov, editor-in-chief, Russkiy Zhurnal, Director of the Center of media researches (UNIC); Fedor Novikov, urban planner, deputy director Parks Reconstruction Division; Sven Osmers, KPMG; Boris Pasternak, expert in industial architecture; Anton Polsky aka Make, art activist and founder of Partizaning; Denis Sokolov, Director for Consulting and Research, Cushman & Wakefield; Elena Shomina, professor, Higher School of Economics, Head of the Center for Housing Movements and community Studies, Russian Academy of Sciences; Rushat hazrat Gazzatulin, Vice-chairman of Council of muftis of Russia

ГОСУДАРСТВО «МОСКВА» В августе 1991 года, после распада Советского Союза, Россия присоединилась к глобальному процессу либерализации экономики. Практически в одночасье из коммунистической крепости Россия стала очередной мировой площадкой свободного рынка. Хотя этот переворот сильно затронул Россию в целом, наиболее сильно его эффект заметен в Москве. Более того, столица демонстрирует тенденцию, во многом противоположную той, что характерна для страны в целом: если во многих регионах России население и экономический потенциал сокращается, то Москва продолжает бурно развиваться. Город занимает 0,006% территории России но в нем проживает 8% ее населения. В других областях дисбаланс еще сильнее: на долю Москвы приходится 10% рабочих мест в стране, 22% российского ВВП и 65% от общего объема иностранных инвестиций. Москва воплощает в себе странный парадокс: чем больше ее значение для страны, тем меньше она похожа на Россию. Столица превращается в особую вселенную, государство в государстве. Москвичи пользуются целым рядом особых условий и привилегий, которые - хотя и были призваны, чтобы помочь им противостоять первым потрясениям капиталистической системы – странным образом раскололи город. С одной стороны, есть официальная Москва, отраженная в переписях населения и данных домоуправлений. С другой стороны, существует неофициальная, или, точнее даже, реальная Москва, с большим количеством незарегистрированных жителей, которые задействованы в экономике, игнорируемой официальной статистикой (Лам). Есть Москва и есть Москва (Адеола). Постоянно разрастающийся бюрократический аппарат вынужден предпринимать все больше усилий, пытаясь управлять этой все более «раздвоенной», почти шизофренической реальностью (Даце). Одним из результатов перехода к рыночной экономике стало резкое сокращение общественного сектора города. Стремительная приватизация, которую было практически невозможно контролировать, привела к хаосу, город

THE STATE OF MOSCOW In August 1991, after the dissolution of the Soviet Union, Russia joined a global process of economic liberalization. From a communist stronghold, Russia became the world’s next ‘laissez faire’ playground almost overnight. While this shift clearly affected Russia as a whole, the effect is most palpable in Moscow. There even seems to be an opposite direction: with large parts of Russia dwindling, Moscow continues to thrive. Moscow occupies 0.006% of Russia’s territory, while it contains 8% of its population. In other areas the asymmetry is even more dramatic: Moscow accounts for 10% of Russia’s employment, 22% of its GDP and 65% of all foreign investment. Moscow embodies a strange paradox: the more important Moscow becomes for Russia, the less it becomes like Russia. Moscow has come to constitute a kind of universe on its own: a state within the state. Muscovites enjoy a whole range of special conditions and privileges, which – although devised to help them withstand the first shocks of a capitalist system – have created a kind of strange divide within the city. On the one hand there is the official Moscow, featuring in censuses and municipal data, on the other hand there is the unofficial, or rather: real Moscow: with a large number of non-registered (illegal) residents, creating an economy unnoticed by official statistics (Lam). There is Moscow and there is Moscow (Adeola). An ever larger bureaucracy has to go to ever greater lengths to administer an ever more schizophrenic reality (Dace). Part of the transition to the market economy has been a sharp reduction of the city’s public sector. Successive, often rushed privatizations have propelled a situation of disarray in the absence of adequate means to manage it. In the meantime the city gets by on its own. There is a whole range of informal arrangements to deal with responsibilities previously held by an omnificent public sector: from an informal system of check and balances in the form of ‘public’ hearings (Lera), to the informal re-parceling of (formerly) public space (Filippo), to a largely underexplored role of the church in (formerly) secular matters such as real estate investment (Aleksandra) and, for the first time, the necessity to treat land as something other than an unlimited resource (Ricardo).

оказался предоставлен сам себе и начал жить по своим собственным правилам. Существует целый ряд неформальных договоренностей по выполнению задач, за которые прежде отвечал всемогущий государственный сектор: от неформальной системы сдержек и противовесов в виде «общественных» слушаний (Лера) и неформального передела территории [бывшего] публичного пространства (Филиппо), до скрытой деятельности церкви, занимающейся вопросами, ранее считавшимся светскими, как, например, инвестиции в недвижимость (Александра). Кроме того, впервые возникла необходимость рассматривать землю, как нечто иное, чем просто неограниченный ресурс (Рикардо). В 2011 году указом президента РФ было объявлено создании нового «столичного федерального округа» и присоединении к Москве ряда территорий, расположенных к юго-западу от города. Расширение административных границ Москвы — не просто вопрос планирования (Роман): оно дает серьезный толчок к переосмыслению перечисленных выше проблем. Масштабы новой территории Москвы – которая становится чем-то средним между огромным городом и малой страной – представляют собой новый вызов как в плане общепринятых методов городского планирования, так и с точки зрения моделей управления городом, и дают убедительные основания для пересмотра и тех, и других. Как это ни парадоксально, может статься, что долгая традиция государственного управления и резкий переход к рыночной экономике помогут Москве найти новый баланс между частным и общественным, между планированием и политикой – некую «мегалополитику» (АМО). Индивидуальные проекты: «Москва-2» (Лам Ле Нгуен), «Государство Москва» (Даце Гурецка), «Земля Ltd.» (Рикардо де Пиньо), «Третий сектор» (Филиппо Баццони), «Публичные» слушания» (Валерия Чубара), «РПЦ Inc.» (Александра Смагина), «Пределы планирования» (Роман Кучуков), «Город островов» (Адеола Энигбокан)

In 2011, Presidential decree announced the addition of a new Federal District to the southwest of the city. Moscow’s new administrative borders are more than just a planning matter (Roman), they form a serious impetus to also rethink the above issues. The scale of the new territory – somewhere between a large city and a small country – presents an interesting challenge: both to conventional methods of urban planning as well as to the models of city governance. It offers a compelling reason to reinvent both. Perhaps the extensive history of state control, followed by the raw exposure to the free market could unexpectedly help Moscow find a new balance between the public and the private, between planning and politics: a kind of Megalopolitics (AMO). Individual projects: The State of Moscow (Dace Gurecka), Moscow Two (Lam Le Nguyen), Land Ltd. (Ricardo de Pinho), The Third Sector (Filippo Bazzoni), ‘Public’ Hearings (Valeriya Chubara), ROC, Inc. (Aleksandra Smagina), The Limits of Planning (Roman Kuchukov), City of Islands (Adeola Enigbokan).

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The State of Moscow

THE STATE OF MOSCOW

“ . ..T H E CON FLICT, F R ICT IO N AND DISCOMFORT BETWEEN MOSCOW AS A MEGACITY AND A S H R IN K ING RUSSIA...” To what extent are twenty-first century megacities a form of power? Of the world’s 26 megacities today, 14 of them have outgrown the country they are located in, according to some major parameters such as GDP, Foreign Direct Investments (FDI) and Population. In many of these cases, partly simultaneous political processes which take place in both the megacity and the country as a whole -- emancipation, competition and conflict – result in discrepancies over power within the national borders. The emancipation and potential political freedom of megacities has been widely celebrated. Stanford University Economist Paul Romer advocates an idea of Charter Cities in Africa as a means to help poor countries to fast-forward their economies, or using large cities as machines for economic emancipation

Moscow Government © Кровля Столицы

from their countries.1 Geographer Parag Khanna shares optimism about the city as an “island of governance on which the future world order will be built.”2 Maurice Strong, a long-time official and consultant for the United Nations claims, “nationstates will probably yield more of their authority to city governments in the decades to come.”3 Driven by a certain ideological agenda, discourse on this topic is devoid of scepticism: in an evergrowing discussion on megacities, there are everfewer doubts about the validity of their autonomy. Consequently, this investigation represents an effort to probe these theories and to anticipate the terrifying beauty of a prevalent emerging political regime - the conflict, friction and discomfort between Moscow as a megacity and a shrinking Russia. Can “freedom” be sustained?

RUSSIA > MOSCOW

GROW T H

In 1991, Moscow bureaucracy was still working under the influence of its Soviet Union heritage, and therefore regulated the smallest details concerning the city. Controversially, the market economy, which gives some state responsibilities to the private sector, only made the city’s bureaucracy more extensive and resulted in even more regulation for the city. Due to this, between the years of 1991 and 2011, the bureaucratic apparatus of Moscow nearly doubled both in terms of departments and employees.4 At the same time, the city has only prospered, demonstrating excellent growth. In 1992 Moscow’s budget was 18 times smaller than the entire budget for Russia and constituted $1.9 billion; now, only 20 years later, it is only eight times as small and has grown in size to $42.3 billion.5 The relevance of government in the city’s economy even manifests physically: the municipality owns some of the most prominent real estate in Moscow, such as the most expensive department store in the city, TsUM, and hotel Radisson SAS Slavyanskaya. In 2002, a government-owned company even planned to construct a Formula-1 race track accompanied by a casino, hotels and an artificial harbour in the city.6 The municipality also extends their reach into business: in 1991, the main functions of Moscow’s Department of Industry and Science was the “production and use of secondary resources”, “production of goods for citizen consumption” and “use of labor resources”. By 2011, these main functions had expanded and changed to include “management of shares in companies”.7 To understand what these processes of “growth” actually mean, it is important to know that the municipal government of Moscow in the Soviet Union was a branch of a totally centralized system. In the Soviet Union, Moscow’s legislative power, also known as Mossoviet, had held sessions only two to four times a year for a period of two days, and there was even a tradition to elect to it exactly the same people as at the very top of the state: Lenin, Trotsky, Molotov.8 Therefore, it is important to note that embedded in the growth and expansion of Moscow’s bureaucratic process and powers is the construction of a previously (partially) non-existent local government. However, as a result of this, it can be argued that the current level of self-governance that the city has attained goes beyond the lines of some of its initial motivations and directions…

< Budget of the Governmant of Moscow, bill $ 1991

2011

100

No of Departments or Committees the Governmant of Moscow 1991

2011

directly employs around 14,000 people; some 2 million people work for the city or businesses owned by the city (2000)

Composition

Departments or Committees: 69 Sub-departments: 945 Co-Chairs: 6 Commissions: 95

Income

$39.226 billion (budget funds) + around $13.729 billion (“charity funds”)

Data source: Moscow Government, 1991/2011

15 000

10 000

< No of employees in the Government of Moscow

A PORTRAIT OF MOSCOW GOVERNMENT Size

Data source: Finance Ministry, 1991/2011

1991

2011

Data source: Rosstat, 1991/2011

1 000

Companies

540 (controlling interests in 190 firms, majority interests in 50 firms)

Commercial real estate

In Moscow: 36 million m2 Outside Moscow: properties in around 60 other Russian regions and abroad (Abkhazia, Crimea, Mongolia, Venezuela, Bulgaria, Kazakhstan, Latvia)

500

No of subordinate organizations in the Governmant of Moscow 1991

2011

Data source: Moscow Government, 1991/2011

AVG annual incomes from real estate deals: $308.6 mill Total value of Moscow-owned property: $25 bill (1998)

The State of Moscow

Transport Supervision

Intellectual Property ol Alcoh ions at Regul

al hnic Tec trol Con

A Tran ir spor t

Energy Ministry

Regional Development

Emergency Situation Agency

Internal Affairs

State Border Agency

es rv se cy Re gen A

E Co xpo nt rt ro l

Culture Ministry

Rai Tra lway nsp ort

Migration Service

Finance Monitoring

Subsoil Agency

2012

Federal District

Procuracy

Customes Service

1997

2011

Regional Affairs

Cossacks Committee MOSCOW 2000

Defence Office

Energy Department

2007

Foreign Affairs

FSB

2004

2002 2003 Moscow State Univ. Branches

MOSCOW AS STATE According to the Constitution, Moscow and St. Petersburg are two cities in Russia that have a status of “federal” city, giving them the same powers as the other 81 federal subjects: republics, oblasts, krays, autonomous okrugs and autonomous oblast.9 However, de facto Moscow is the only city and the only federal subject in Russia that is politically autonomous from the country, and since the fall of Soviet Union has designed its own system of bureaucracy to create spaces in governance where Moscow, in a way, becomes independent from Russia. Since the middle of the 1990s, Moscow has duplicated many Federal ministries within its municipal structure. Today, Moscow has its own Defense Office, Energy Department, Department of Foreign Affairs with its own “embassies” and an Affairs Committee of Cossacks, which is a direct duplication of an identical Committee serving the Presidential administration. Moscow also financially operates highly independently from the Federal State. Only 5.8% of Moscow’s budget constitutes federal subsidies while the city collects 53% of all its taxes for the federal budget. The Moscow government has even created a special fund that bypasses state and allows it to reach money outside of Parliament’s control. In a politically difficult cases, or when the federal executive branch wants to avoid dealing with the State Duma, the Federal government can extract funds from the finances of Moscow.10

“ . .. MA N AG E RIAL TO O L, W HI C H TH E A DMIN I ST RAT IO N O F TH E C ITY U SES TO SEPARAT E MOSCOW FROM RU SSIA, AND TH E C ITY FR O M CO NT EXT...”

2004 Fuel and Energy Dep.

Moscow Internat. Center

2001

Moscow Compatr. House

House of Moscow

House of Moscow in Sevast.

House of Moscow in Riga

2003

2001

As a result of this relative bureaucratic and financial independence, Moscow as a political entity is able to pursue its own agenda, even if it is different from that of the Federal Government. In some cases, the government of the city even acts as a de facto government of Russia, with the mayor of Moscow acting as the president of the country. For instance, the Moscow Department of Cultural Heritage has legally described functions to “form the State policy in the area of public protection, conservation, use and promotion of cultural heritage of Russian Federation”.11 Similarly, the Moscow municipality from its own budget until late 2010 was constructing a large number of properties (apartment buildings, spas, hotels) and a branch of Moscow State University in Sevastopol (Ukraine) with an aim of increasing the economic, political and cultural influence of the whole of Russia in Crimea. According to former Mayor of Moscow, Yuri Luzhkov, these actions were taken because “losing Sevastopol, which is strategically important, would be tantamount to losing the south of Russia”.12 The extent to which Moscow can be considered a political state can be understood through a catalogued inventory of case studies (to follow). This documentation, which consists of a wide spectrum of topics without any intentional sequence, piece by piece forms an impression and identifies the “state” of Moscow’s political independence. These examples demonstrate that the system of autonomy bypasses a whole series of other administrative layers, and it works either as a “speedway”, implementing necessary policies nearly years faster than other places in Russia (as in the

1995

2002

Political and Administrative System of Moscow, 2012 Data source: Moscow Government, 1995-2012

< Political and Administratice System of the Union of S.S.R. © marxists.org

case of foreign policy), or as a system to avoid many administrative limitations (as in the case of presidential envoys). At the same time, this system creates a “safety belt” both for Moscow from the country, and the other way around. The emerging picture shows that the created space in the bureaucracy of the city that “should not” traditionally be governed at the municipal level is not redundancy of “extra” bureaucracy that replicates Federal governance, but an apparatus, a carefully crafted managerial tool, which the administration of the city uses to separate Moscow from Russia, and the city from context.

“ . . . POL I TI C I A N S N E E D TO UNDERSTAND THAT MOSCOW N E E DS S PEC I A L S ECURI T Y M E AS URES. . .” 400 people

Food Supply During the 1990s, the Federal government failed to ensure food supply for Moscow. The cover pages in the Moscow Times often confirmed this problem with titles like “Yes, we have no tomatoes”.13 As opposed to smaller agrarian cities where a large part of the population can grow food in their gardens, as President Mikhail Gorbachev put it: “The food situation in Moscow is critical”.14 To ensure the food supply in the 1990s, Moscow developed economic cooperation with other regions and neighbouring countries without federal authorities. By the end of 1998 Moscow concluded agreements with 70 regions, and Ukraine was Moscow’s largest food supplier.15 Privatization In 1992, the Russian government began a controversial sell-off of buildings, factories, mining and oil companies to jump start the free market by putting state-owned assets in private hands. Moscow was scheduled to auction off more than 3,000 companies in the city. Luzhkov bitterly opposed this strategy complaining that Anatoly Chubays was giving away state property “like a drunk selling everything in the house.”16 In 1994, Luzhkov received from Yeltsin approval to pursue “Moscow style” privatization. The Moscow style privatization distinguished itself in three ways: first, commercial competition with terms of investment was left behind as the old way of selling; second, a real estate evaluation was made to determine the market price; and third, land was not privatized. As a result, the city government could keep major assets in its hands. For instance, by not privatizing land, the Moscow government is able to micromanage land use as well as manipulate rent values, prices and generate vast sums of money.17 Foreign Relations At the end of 1990s, the Federal state disrupted relationships with CIS countries and other former Soviet Union republics. In contrast, Luzhkov continued to cooperate with them, and opposed national foreign policy. Even during the Kremlin’s propaganda in 1995-96 against Lukashenko, Luzhkov signed some major contracts for delivery of trolley buses for Moscow from Belarus and supported Lukashenko’s policy throughout the whole constitutional crisis in Belarus.18 In the late 1990s, when the central power prioritized its cooperation with the Commonwealth of Independent States (CIS) according to Russia’s foreign policy, Moscow started to enter additional international projects. Throughout this time, Moscow accelerated ahead of the federal centre in all its foreign policy initiatives.19 Foreign Representation In 2010, visiting Chinese Prime Minister Wen Jiabao met president of Russian Federation Medvedev to promote China-Russia cooperation at local level. In the same visit he also meet with Mayor of Moscow Sergey Sobyanin and discussed cooperation between two capitals and other Chinese cities and provinces to upgrade bilateral economic and trade cooperation.20 FSB The high rate of organized terror in Moscow created security crises in the city. As result, in 1995 a position for an additional deputy director in the FSB, who would be responsible for Moscow city and the Moscow regional directorate, was created. Besides creating more direct control over security in the city, Luzhkov’s influence on the Moscow branch of the FSB grew to be so great that there was a case in 1999 when the FSB chose to investigate the business activities of Luzhkov’s wife in the Ivanovo Oblast rather than in Moscow. 21

300 Order on security in hotel enterprises Order on security in highrise buildings

200

Order on security in metro Killed 100

Injured

1991

1995

2000

2005

2010

Terror acts and law changes in Moscow Data sources: Moscow Government 2005-2006; RIA Novosti, 2010

Trolley-busses “Embassy” Construction

“Embassy” Companies Riga Minsk Food Kiev

Moscow

“Embassies” Construction Sofia Sevastopol “Embassy” Construction Fleet MGU South Ossetia Astana

MGU Construction

“Embassy” Yerevan Construction

Geography of foreign policies of Russia vs Moscow in 1990s Data source: Alexandrov, 2001

Terrorism In 1999, after the bombing of apartment buildings in Moscow, Luzhkov stated, “Moscow is a desirable target for terrorists. The State Duma, the country’s government and other politicians need to understand that Moscow needs special security measures.”22 After the terror attacks in Moscow between 1999 and 2004 when more than 400 people were killed, the Moscow government was given rights to develop more secure anti-terrorism orders for metro, high-rises and hotels than the orders of the federal state.23

Meetings with Wen Jiabao © Ministry of Foreign Affairs of the People’s Republic of China

The State of Moscow

FO RC ES Partly intentional and partly accidental, Moscow’s power grab is an outcome of various interconnected infrastructures: history, economy and bureaucracy. Simon G. Kordonsky, a professor at the Higher School of Economics in Moscow in the Department of Local Administration, argues that some historical factors largely determined Moscow’s relative political autonomy from the country because when Russia transitioned to a market economy, its different departments and committees of the state bureaucracy turned into companies that are in fact organized monopolies operating on behalf of the Moscow government: “Moscow is a very specific agglomeration because the Soviet Union used to consist of 15 republics and Moscow city as the capital of the Union. In Moscow the entire political ‘infrastructure’ of the Soviet Union-including the Ministry of Defense, Industrial production, and Finances-was concentrated. When the Soviet Union collapsed none of these structures went to Russia but instead everything stayed in Moscow. This is why Moscow is a “city-state”; governed by Luzhkov, it has its own politics and determines its own finance, administrative and energy policies.” The political structure of Soviet Union had nine levels of hierarchy. All of these levels were managed by the Communist party. In the Constitution, it was stated that this party has a leading role in the Soviet Union. In 1989, when a leading party was replaced, the “cement” that held together these nine levels disappeared and the structure of governance started to fall apart. In addition, on the second level of the hierarchy of the Soviet Union was Moscow city from the point of view that the city’s Communist Party Committee was located in Moscow. And when the Soviet Union collapsed, the Communist Party Committee of Moscow and all of its organizations also collapsed. If the Soviet Union’s 14 republics each had its own Communist party, the Russian Federation didn’t have a separate Communist party. It had only party committees of cities, regions and of course the General Committee of the CPSU. Therefore, a void was left in the governance level of Russia upon the collapse of Soviet Union. After the breakdown of the system, the first mayor of Moscow created the Moscow Committee of Science and Technology, which then transformed into the AFK Sistema holding. This company has close ties to the Moscow government (run by Luzhkov’s brother in law, the company controls the city’s mortgage system, a cityfunded program to renovate large apartment buildings and, among its companies, is the largest gasoline operator in Moscow - DG). With this mechanism, Soviet structures remained in Moscow’s sphere. This happened with all structures: Defense, Rosatom, Energy. Soviet ministries disappeared and turned into transnational corporations connected with Moscow. Imagine the following situation, in the bureaucracy of Soviet Union was a body “Minmontazhvoinstroi” that performed construction of a Defense Industry equipment. With the collapse of the Union, this ministry disappeared and in its place was formed “Montazhspetsbank”.” 47 The bank, which in 2005 changed its name to International Solidarity Bank, is an authorized bank for the Moscow government, serving the city’s companies like the Moscow Metro, SC “Mosgortrans”. This strategic hold on the economic assets of Moscow government was also seen in the beginning of the 1990s when administration chose not to privatize its Soviet era assets that bring profit in the market economy, and the municipal privatization program occurred only in its housing sector.48 As a result, municipal government by the end of 2010 still owned the majority of the land in Moscow, 85% of hotels in the city and shares in hundreds of companies.49 The historical events that resulted in the concentration of “infrastructure” for the whole of Russia within the borders of Moscow have been accompanied by the global phenomena of asymmetry between the megacity and the hinterlands, which was produced by the market economy. The geography of economic and population growth during the last ten years in Russia shows Moscow’s extremely accelerated and deepened asymmetrical growth compared to any other point in the country. Population growth in Moscow constitutes up to 88% of the total population growth of Russia and 26% of the total GDP growth, which is larger than Russia’s most productive oil extracting region, which is responsible for only 9% of the GDP increase.50 The resulting concentration of Russia’s resources within the city limits of the Moscow

“...MOSCOW CON STI TUTES UP TO 8 8% OF TH E TOTA L POPUL ATI ON G ROWTH OF RUSS I A . . .” municipality has reached 80% for financial resources, 78% for billionaires, 53% for federal budget sources, 42% for foreign imports and 40% for trade.51 The shrinkage of Russia into Moscow could not have even been prevented by various law changes. The state undertook actions to retract power from Moscow during both Yeltsin’s and Putin’s administrations. In 1995, the state established an economic blockade over Moscow by reducing its subsidies to the city. In 1999, the state ended its subsidies to Moscow as the federal capital. In 2004, Putin established a law to appoint the mayor of Moscow as well as all other governors of the country. The federal government even established a centralized taxation system in 1998, leaving local governments only 25-30% of federal tax incomes and centralizing all of the taxes except the land tax in a unified system under the control of the state. But at the same time, Moscow also upheld its claim for greater independence. In 1992, Moscow acquired control of its metro system from the government of Russian Federation. In 1996, Moscow required rights to retain tax revenues in the city’s road fund without having to pass them on to the federal budget. While Russia’s bureaucratic tools-policies, administrative reforms of centralization, and taxation--have had a fundamental impact on other federal subjects in Russia, they have not been able to influence and break-down Moscow’s separate political status. The two main reasons for the failure of the bureaucratic instruments are Moscow’s relative financial independence and the high level of bureaucratic “informality”. Real political agreements and policies are decided “in restaurants, while going fishing and playing soccer every Saturday. And not every other Saturday but every Saturday. This is how problems are solved and agreements about billions are reached.”52 Since the fall of Soviet Union, the relationships of Moscow in this context have changed. It is not the case that Moscow does not need its context Russiabut year by year Moscow has become Russia. Deliberate or not, the new concentration patterns for the country’s economy has created the same power patterns on the political level.

Chronology of the state of Moscow within Russia Data sources: Rosstat, 1991-2010; Government of Moscow, 1991-2010; Government of Russia 1991-2010; Reddaway, 2004; Jensen, 1999; Committee of Municipal debt, 2001

VG ows A Mosc per capita e incom

1991 Moscow undergoes unique privatization process

1992 Moscow acquired control of its subway system from Federal control

Moscow Power

12%

18%

2002

2001 15%

50%

2006

30%

2011

2010

Centralized

Soviet system

Decentralized governance

Reforms of centralization

Transformation period

Centralized reg. vs Autonomous Moscow city

2012

2000

Putin

1993

1991

Yelts in

1992

Luzh k

1998 Cris is 199 9

1998 Moscow establishes power sharing treaty with Federal government

1996

1995

1994

1996 Moscow required reights to retain tax revenues in city’s Road fund

1997

M P os a id cow Se s sh rv ice are in s

2007 Medve dev

2008 s

2009

Crisi

Decentralized

30%

53%

44%

Power eras

65%

Taxes

2004 Putin appoints governors

45%

64%

10%

2001 1999 Federal State stops Department subsidize of Local Gov. Moscow as is disolved federal capital

15%

2003 New Law On Local Governance

35%

re s sha cow FDI Mos in

The State of Moscow

2005

2004

2003

7% sh M are o in scow GD s P

1995 State reduced subsidies to Moscow (Economic blockade)

1996 Local gov. heads elected in direct elections

22%

46%

1993 Constitution in approved right to „local governance”

Federal Power

Mos co tion ws con tr to R F bu ibudget

in are e s sh ad ow sale tr c s Mo hole W

Global map of megacities and their countries

52% (as % of country’s population)

Data source: UN, 2010 20% 16%

10%

27%

17% 18%

7% 5%

17% 1%

20% 9% 2%

10%

2% 7%

2% 2%

20%

37% 8% 11% 6%

Megacity > 10% its country Megacity < 10% its country

GLOBAL CO N T EXT Although influenced by historical and political particularities, Moscow’s power grab as a megacity is by and large a global issue that the world is facing now. Even the governance trends of global power institutions recognize megacities as a form of an autonomous political power in the contemporary urban and economic age. For instance, the Clinton Foundation, which is one of the fastest-growing NGOs in the world and whose biggest contributor is Bill Gates, in 2006 established the “C40” political organization of 40 city mayors. The organization has accumulated significant power – its budget in 2008 constituted 1/10 of the budget of the United Nations. The foundation counts among its members people like the CEO of MasterCard, Bono, the editor of Financial Times, the co-founder of YouTube and New York Mayor Michael Bloomberg.53 The main motivation for the development of the financial and governmental strength of this NGO is to “help other mayors succeed by giving them a global voice that can compete with heads of state.”54 If the powers of Moscow have been developing its “city-state” without any official law of autonomy, maybe more democratic power regimes like the United Kingdom are approaching the accelerated power of its megacity through active discussions on the topic. In this way, decision-makers, journalists and parliamentarians are speculating and arguing among themselves whether it is possible to position London according to the models of medieval city-states like Venice and Florence and even whether London should get rid of the rest of the country altogether.55 The major condition setting Moscow apart as a megacity within the larger global context is the level of Russia’s monocentrality. Only half of the world’s megacities have fundamentally centralized either the population, GDP or FDI resources of the countries they are located in. For instance, in decentralized states like China, its megacity Beijing constitutes only 1% of country’s population and 6% of FDI; New York takes 7% of Americas population while Delhi holds only 2% of India’s population and 5% of its GDP. On the other side of the spectrum, Moscow is a global leader in accumulation of its country’s FDI (50%), Seoul takes the prize for holding the largest share of the country’s population (52%) and Paris accounts for the biggest share of GDP produced by

a city in a given country (30%).56 The condition emerging of a megacity’s location in a centralized state is a competition between megacity and its state. While conflict and competition between the megacity and its country is a condition seen in cities like London, Mexico, Tokyo, Paris and Moscow, it is not an issue of China, India or the United States. Arguably, Russia, which critically is maintaining the centralization of growth in Moscow might be a unique and radical case of the “state” of friction between the power of the state and that of the city.

Top 3 megacities in accumulating country’s GDP: 1. Paris - 30% 2. Moscow - 27% 3. London - 20% Top 3 megacities in accumulating country’s population: 1. Seoul - 52% 2. Argentina - 37% 3. Tokyo - 26% Top 3 megacities in accumulating country’s FDI: 1. Moscow - 50% 2. Paris - 48% 3. Buenos Aires - 43%

“ . . . COM PE TI TI ON B E TWE EN M EGAC I TY A N D I TS COUNT RY I S A CON D I TI ON OF LON DON, M E X I CO, TOKYO, PA RI S A ND MOSCOW BUT IS NOT AN ISSUE OF C H I N A , I N D I A OR USA ...”

MOSCOW > RU SSIA Biography chronologies of heads of Sobyanin’s Moscow Government

The State apparatus comes to adopt the tools of its enemy. After two decades of Moscow becoming Russia, currently the whole federal state of Russia, which occupies one tenth of the planet’s landmass, is transforming itself into Moscow. The seemingly random processes transforming Moscow since the end of 2010 include post-Luzhkov government, Moscow’s privatization program of 2011/2013, an administrative restructuring of the Transport Ministry of the Federal State, expansion of the city, state corporations’ strategies and the structure of the newly established Federal Fund for Housing Development forms a part of a single, completely political project – “reconstruction” of the state’s power. The underpinning concept that can be tracked down in every single documented case of modifications in terms of ownership, governance, personnel comes down to “100% State.”

Data source: Moscow Government, 2012

NEW GOV ERN M EN T The post-Luzhkov government apparatus of Moscow has been largely composed from the heads of various departments of Russian federal government. The changes in positions can be tracked in very simple terms. The new head of The Moscow Department of Cultural Heritage was previously the head of The Federal Service of Cultural heritage. The new Chief of Staff of The Moscow Government was the Chief of Staff of The Russian Government. The new Mayor of Moscow was the head of The Administration of the President of Russia. And even the new Governor of Moscow region was a minister of Russian Federation all the way from 1991 to 2012. The new Mayor has a biography saturated with consistent experiences and attitudes that are directed towards federalization of relatively autonomous federal subjects of Russia. His PhD Thesis was titled “Legal position of the autonomous okrugs as federal subjects of Russia”. And in 2003 Sobyanin was the first governor to support Putin’s plan to end gubernatorial elections.57 Before heading The Administration of the President he chaired governance of both Khanty-Mansi Autonomous Okrug and Tyumen Oblast. These economically relevant oil and gas based regions throughout the 1990s were highly autonomous and when Sobyanin took over their governance, he centralized these federal subjects and therefore established state’s control over Russia’s main natural resource locations. Among the various tools of federalization, Sobyanin even managed from 2001-2003 to chair board of TNK fuel company, which is one of the biggest private companies in the world and the 3rd largest oil company in Russia. Since Sobyanin came to Moscow he is implementing his experience of oil regions and centralizing his efforts in giving the control of the resources, this time generated in Russia’s megacity, back to the country.58

Sergey Shoigu

Anton Kulbachevsky

Moscow Region Governor

1991-2010: Minister of Russia

Nikolai Lyamov

Sergey Sobyanin

Mayor of Moscow

2005-2010: Head of The Administration of the President of Russia

“ . . . OWN E RS H I P, G OVE RN ANCE, PERSONNEL COMES DOWN TO “ 1 0 0 % STATE ” . . .”

Gulnara Penkova

Vera Chistova

Head of the Department Deputy Mayor of for Environm. Protection Transport

Press Secretary

Head of the Department Chief of Staff of Finance

2008-2010: Head of the Federal Service of Natural Resources

1999-2010: Deputy head 2001-2010: Head of of the President’s Press the Russian Finance Service Ministry’s Departments

2009-2010: Minister of Transport of Russia

Anastasiya Rakova

2009-2010: Chief of Staff of the Russian Government

The State of Moscow

STATE CORPORATIONS Currently in Russia operates five state corporations: the Bank for Development and Foreign Economic Affairs („Vnesheconombank”)” (May 2007), „Nanotechnologies („Rusnano”)”(July 2007), Olimpstroy “(October 2007 ), “Russian Technologies” (November 2007) and “Rosatom” (December 2007). The corporations together have funds of $115.9 billion, which is almost triple the size of the budget of Moscow, and they are 100% owned by Russian Federation. These state corporations form a weird system – a mixture of company and government. In the fields related to the sphere of the company’s work, they form policies of the state. The corporation „Russian Technologies” instead of the federal government is taking part in implementing Russia’s export/import policies and determining policies in the sphere of Russia’s military-technical cooperation with foreign states. „Vnesheconombank”, which Mr. Putin chairs, has a mandate to participate in determining federal investment programs, which previously was the sole function of the Federal Ministry of Economic Development.87 All of the state corporations are an actual part of the federal administration and within last two years all of them except „Olimpstroy” have been infiltrating and becoming part of the municipal government of Moscow as well. This process has been happening by conducting cooperation agreements between the municipality and the state’s holding, and this action has not been performed in other cities or regions in Russia. Two processes are emerging: firstly, the state corporation becomes a tool through which the state can insert their policies in Moscow. From an economic perspective, corporations are able to use the bureaucratic apparatus of Moscow to increase their market and productivity while none of the agreements are offering any ownership in shares to the Moscow municipal government. To achieve these goals, state corporations are becoming part of councils or working groups of specific departments of Moscow government related to the field of the corporation, just as in the federal case. For instance, „Vnesheconombank” is one of the council members in the new „Moscow transportation division”. „Russian Technologies”, „Rusnano” and the same „Vnesheconombank” are among the partners in Moscow’s housing’s development group that is being developed in partnership with RHDF. In 2011, the agreement of a corporation based on the flourishing weapons market “Russian Technologies” („Rostekhnologii”) which employs nearly 940 000 people with the municipality defines that the Government of Moscow, for instance, will develop “investment projects in the area of the main activities of the Company”; “training of scientific and industrial specialists”; “production and sales of high-tech industrial products” and will “implement tools to involve „Russian Technologies” in manufacturing and supply of goods and services required for the municipal economy and social

“ . .. TH E STATE CO R P O RAT IO N ACTS AS A M EAN HOW T HE FEDE RA L STAT E CAN CO NT ROL DEVE LO P ME NT O F T HE HEALTH SECTOR OF MOSCOW...” sphere of the city”.88 An example of the close involvement of the company in Moscow municipality is currently the ongoing modernization process of the city’s healthcare. A specific long-term agreement between the Moscow Government and „Russian Technologies” defines that the modernization will be developed using the technological products of the corporation.89 To develop Moscow’s healthcare, one of the corporation’s holding companies will conduct 90 research and development projects and will receive investments in R&D which will be funded by federal program.90 In an interview to Vechernyaya Moskva newspaper, Sobyanin describes the involvement of the state in the city’s municipality: “There has been so much speculation on the subject that Putin does not like people in Moscow. But I can assure you that never before has there been such close cooperation between the city and the federal government.

The city’s healthcare system is currently undergoing a comprehensive modernisation programme, which includes structural reorganisation and replacement of old, outdated equipment. Fifty percent of the financing for this project has been provided by the federal government (mostly directed to „Russian Technologies”), and the decision to allocate the funds was made personally by Vladimir Putin.”91 In this case the state corporation acts as the means by which the federal state can, in the long term, control the development of the health sector of Moscow, which shares almost 13% of the total finances of the city, while simultaneously a corporation with such a giant size becomes a part of city’s government. In this way, the influence of the bureaucratic body of Moscow becomes even more powerful. The state corporation „Rusnano” through an agreement with the Moscow Government is taking control over the city’s sector of innovation policies and nanotechnology projects.92 An exemplary case is the holding’s JSC “Prepreg” composite material company, which has signed a partnership contract with the Government of Moscow.93 As a result, the company on behalf of the municipality is developing special education for engineers that would help develop production of composite materials of „Prepeg”.94 Moscow’s government has agreed to spend 5% of all of its innovation expenditure on the products „Prepeg”.95

Rusnano chairmen Anatoly Chubais and Mayor of Moscow Sergey Sobyanin signing a cooperation agreement, 2011.06.11. © rusnano.com

Opening of Rusnano company’s Prepeg factory “Moskvich.” In picture Sergey Sobyanin, Anatoly Chubais and Viktor Vekselberg, owner of Renova Group 2011.11.23. © nanonewsnet.ru

150 000

100%

400 000

AVG in Russia

Moscow

AVG in Russia

The geography of state corporations reveals that simultaneously with the injection of state corporations in the municipality and becoming the force that moves some of its policies, the parallel move of the corporations is to abandon Russia’s cities and regions which are unproductive economically and expensive to sustain. „Russian technologies” has abandoned almost half of the country from any interest and governance of the corporation/ministry. This economy of governance can be simple measured. Of the 83 federal subjects of Russia, 15 are cheaper for the state to sustain than Moscow while 67 are more expensive. The most expensive subject - the Chukotka Autonomous Okrug – costs the state almost 20 times more than Moscow. The second most expensive - Kamchatka Krai – which costs 16 times more than Moscow. This means that, to maintain the country, the federal state spends RUB575,114,092,886 every year more than would be needed in an „apocalyptic” scenario if all of the costly regions would move to the pattern of Moscow .98 It would be apocalyptic, if this weren’t indeed the reality.

AVG in Russia

The corporation „Vnesheconombank” is becoming a part of Moscow’s municipal bodies of Transport, Housing and Urban development sectors. By being a member of their councils, it is becoming one of the biggest source of financial loans for municipal investment programs.96 For example, „Vnesheconombank” is providing financing to develop the techno-park Nagatino i-Land (Nagatino Island) as part of Moscow’s investment projects, which will be the second largest urban development project after „Moscow City” implemented by the Government of Moscow but in contrast to that project, it will be financed by a state-owned bank.97

Moscow Moscow

Federal subsidies per capita among Federal subjects

Federal subsidies as % of Federal subjects budget

Regional budget per capita (rub)

20 (persons)

STATE AS MOSCOW

The political regime of Moscow as State conceived in an era of wild liberalization now with an even admirable straightness, “violence” and determination is being used by the political economy of state capitalism. The documented cases have been underpinned by the same logic that organizes state capitalism. In this form of capitalism government of a state is letting “go of the small to strengthen the hold over the large”.99 Russia as well as most of the emerging economies don’t follow the dogma of western capitalism of 1990 – Washington Consensus and diversification of the economy, but instead are developing just one asset that they absolutely have to get right, whether this is access to the sea, natural resources, human resources--or perhaps the megacity. Following this reasoning, Russia, with an extreme selectivity and commitment, becomes those sectors and what is important for this project – those cities, which bring the greatest influence economically and geopolitically.100 Consequently, Moscow as Russia’s biggest holder of resources is in a process of switching from a City state into a State city.

2 7

“Russian Technologies” (green - non governed; dotted- head offices of corporation) 20 (persons)

This political “state” of Moscow defines two simultaneous consequences. On one hand, we see the hollowing out of Moscow as a municipality because the federal state by various means is taking it over. And, on the other hand, the federal infiltration is simultaneously escalating the “size” and concentration of power in the city. The tendencies of economy are creating political concentration and analogously, producing a dictatorship.

16 9

A Russia that is unapologetically and unabashedly Moscow and nothing else.

Radiuses and distribution of RHDF federal land freezing (peak points of new federal housing contruction program) > expensive for State then Moscow

< expensive for State then Moscow

Date source: Finance Ministry of Russia, 2012

The State of Moscow

MOSCOW TWO

“...WHILE MOSCOW HAS THE MOST BILLIO NAIR ES IN T HE WOR LD, 25% O F T HE CIT Y L I VE B ELOW TH E MINIMUM WAGE. . .”

There are two Moscows, one which is official and the other, in the shadows and hidden from view. One could argue that Moscow is governed with acute awareness of the reality of what the city actually is; recognising the the official Moscow, whilst ignoring and missing out on the opportunity of taking account of the ‘other’ Moscow.

On December 15, 2010, Moscow police could barely contain the race riots organized by Russian Nationalist (Neo-Nazi) organizations when they broke out on Manezhnaya Square, in the centre of Moscow and adjacent to Red Square and The Kremlin (Economist, 2010). The riots were in response to the suspected murder of an ethnic Russian football fan by a group of migrants from the North Caucasus regions, and were evidence of a broader crisis in the city: an exacerbated social inequality within Moscow’s city limits.

Whilst the 2011 census recorded 11.5m people, unofficial statistics place the true population of the city at close to 18m (Federal State Statistics Service 2011). Put simply, there is no definitive figure on the population of Moscow. The differences between those officially registered as Muscovites and those who are not span a broad range of social benefits from housing provision, transportation, pensions, and employment opportunities; this means that while up to 18 million people contribute to the city’s economy, only a fraction of those are properly accounted for and aided by the state. No matter what the true population of Moscow is, one thing is clear: the way the city is currently managed is inadequate to achieve social cohesion which could be realized when equal economic opportunities were offered to all who operate in the city. The reluctance of Moscow to take account and deal with the true economic situation and social complexities have resulted in a city where inequality amongst its citizens constantly threatens to reach the point of breaking. Thus, while the race-riots of 2010 can be seen as racial and ethnic tensions, to view it purely as such belies a broader reading revealing a growing dissatisfaction with the economic and social opportunities in the city

In many ways, this event was a manifestation of the ‘boiling over’ of simmering social tensions prevalent in Russia over the 20 years following the break-up of the Soviet Union. While the official population of Russia has declined by 6m people since 1991 (Rosstat 2011), due to an influx of migration both attracted by the continued economic strength of Moscow and repelled from Russia’s hinterland and other neighbouring countries due to a decline in industry and employment (Light 2010), Moscow has continued to grow in size to become the largest city in Europe (and incidentally Europe’s only megacity!) In many ways, the riots of late-2010,while in this case flared by racial tensions, were far more representative of a range of other social and economic contributing factors (Economist 2010). Since 1991, with a series of rash privatizations and shock-therapy liberalization propelling the city into disarray (Stiglitz 2003) , Moscow has experienced a sharp reduction in its public sector. The subsequent social and economic deficits of liberalization have left Moscow in a state unable (and perhaps even unwilling) to adequately manage the full complexities and problems facing it today.

The two faces of Moscow. Top: Moscow’s annual Millionaires Fair Bottom: One of Moscow’s many migrant construction workers. Credit: AFP

Moscow Two

(or lack thereof ) (Economist 2012). Moscow is not just a city divided between the ‘haves’ and have not’s,’ it is also marked by a schizophrenia of rules and regulations, dividing its citizens further into ‘cans and cannots.’ When we look at the data, Moscow’s deficits are disturbing; revealing an alarming inequality in both wealth and opportunity. Whilst Russia’s GINI coefficient (a measure by which the higher the number, the more unequal income is distributed) is 42.5, almost the same as the USA (41.0) Moscow’s is far higher at 62.5, which means that if Moscow were a city-state, it would rate as the fourth most unequal in the world (World Bank 2011). In real terms this means that while the city boasts the most number of billionaires in the world (Forbes 2012) (and a resultant escalation in the cost-of-living) a quarter of the city lives below the minimum wage (of 10,000rub per month) (Kommersant 2007). Likewise, the richest 10% of income earners control over 40% of Moscow’s wealth, and the same richest 10% earn on average 40 times more than the poorest 10% (8 times higher than the EU average) (Kommersant 2007). Furthermore, whilst officially Moscow’s average income is triple the national average (Rosstat 2011), 40% of people have not experienced a rise in their real incomes (adjusted for inflation) since 1991 (Parfitt 2011). Predictably, this disparity shows itself in a number of areas. In healthcare, while in 1991 only 10% of healthcare was private (ie: individually paid for), today this figure hovers around 60% (IISP 2007). The World Health Organization reports that in Moscow, “out of pocket payments for health care services have become a condition for getting adequate health care of full scope and of desired quality” (IISP 2007). Moscow is undoubtedly Russia’s economic powerhouse, contributing 24% of the country’s annual GDP (Rosstat 2011). However, as a consequence of Moscow’s immense economic power, Moscow’s economic climate also reflects it’s inequality. Fluctuations in the economy further reflect and are reinforced by the unequal distribution of wealth The heavy influence of the oil and gas

“ . ..T H E RIC HEST 10% O F I N CO ME E A R NER S CO NT R O L OVER 40% OF MOSCOW’S WEA LTH ...” sector means that Moscow’s economy is lop-sided with very large businesses dominating the economy. 60% of Moscow’s GDP is generated by the largest 100 companies, of which 33% is generated by two companies, Lukoil and Gasprom (Liuhto and Vahtra 2009). While the oil and gas is not produced in Moscow, it’s financial flows certainly pass through the city’s economic register, and thus much of the remainder of the economy is generated by services to the resources industry (Liuhto and Vahtra 2009). In addition to the economic classifications which divide the city, Moscow is a physically divided city; the current state of inequality is even further exacerbated by time and energy spent addressing transportation challenges. Whilst the transportation problems of the city are well documented (ranking as one of the most problem riddled cities on the IBM commuter pain index) (IBM 2011), it is often not mentioned that a lack of social mobility is also a consequence of a lack of physical mobility. Official employment is highly concentrated in the centre of Moscow with 60% of contracts contained within the Sadovoye ring (Mosstat 2011). At the same time, a ‘booming property market’ has driven up the cost of housing in the centre (the average price of a house rising by 600% since 2000) (Blackwood 2011). Furthermore, the unclear and haste reallocation of land stock in Moscow, bureaucratic difficulties of construction, and near-zero taxation on land have meant an increase in land speculation while the development potential within the city limits is squandered. All this has forced a long-distance commuter culture where citizens live far from their work, adding even further to the physical discrepancies facing Moscow. Simultaneously, whilst state spending on public transport is very low (at 45eur per person, compared to 900eur in London) (Cervero

2007) and the costs of building infrastructure is notoriously high (construction of roads per km in Moscow costs almost ten times more than in the EU) (RIA Novosti 2011). At an end-point, the result is a city continually trapped in gridlock with a public transport system at near-bursting point. In many cases, inequalities exist due to predisposed circumstances, or physical barriers, but in some cases there is an administrative body ensuring that these inequalities remain. It is certainly a cliché to say that Russia has a reputation for “informalities in bureaucracy”, or in less euphemistic terms, corruption. To conduct business in Moscow, one has to deal with informal practices which have more or less become engrained in the bureaucratic process. At the small scale, street merchants report paying ‘krysha’ (protection) money to police so regularly that they factor it in as a regular expense, akin to an informal tax. At the larger end, businesses involved in construction work in Sochi for the Winter Olympics of 2014 report having to pay kickbacks of more than fifty per cent of the construction cost (Ioffe 2011). Russia consistently ranks at the bottom-end of Transparency International’s annual corruption perception index. Currently, Out of a 182 countries surveyed in 2011, Russia ranks a 143, on par with Azerbaijan, Nigeria, Togo and Uganda (Transparency International 2011). However as consequence to the breakdown in the public sector and the social deficits of liberalization, the processes by which the city ‘actually operates’ has become distinct what is “official”. In Moscow, whose legislative environment is called by Hugh Barnes as “hyperlegalism” (Barnes 2011), overarching and inoperable rules and regulations actually give rise to anarchy. This project seeks to examine the informal sector in Moscow; whereby an institutionalized flouting of “the rules” and lazzaire-faire acceptance of informal dealings is actually the system in which the city is able to function. We find that Moscow is home to a proliferation of the types of firms and economic spaces which some may consider ‘backward’ and unconnected to the advanced service economy (of which Moscow aspires to belong to). To mention a few: street trade, sexwork, bootleg alcoholic production, gypsy taxis, unauthorized garbage disposal, underground casinos. Although the individual firms that make up this sector are small in scale, as an aggregate, the informal sector in Moscow extremely large and is vital to the proper functioning of the city; yet denied the benefits of belonging to the formal economy. Through an investigation of the informal sector, we reveal that full extents of Moscow’s economic prowess are not being adequately accounted for; where a huge potential for economic diversification and social equalization is laying dormant because of reluctance by the authorities to realize and incorporate the true realities and complexities of the city.

BUSINESS It’s now a cliché to say that Moscow’s economy is heavily influenced by large businesses, typically in the oil and gas sector and often owned (or at least under the heavy influence) of the state. As well as being the political centre of Russia, it is also the economic heart, contributing 24% of the country’s annual GDP. The heavy influence of the oil and gas sector has meant that Moscow’s economy is lop-sided with very large businesses dominating the economy. 60% of Moscow’s GDP is generated by the largest 100 companies of which 33% is generated by two companies, Lukoil and Gasprom. However, as a consequence of or perhaps due to the complacency of strong resource-driven growth rates over the past 10 years, Moscow’s business climate also reflects its inequality and difficulties of entry. Russia is one of the few countries in the world to fall steadily in a number of business rankings. Out of a hundred and seventy-eight countries surveyed in 2011, in the Forbes ‘Best Countries for Business’, Russia ranks a 102, immediately below Pakistan, Bangladesh and Nigeria. It also ranks in the bottom quartile in the World Economic Forum “Global Competitive Index 2011” and the World Bank’s “Ease of Doing Business Index 2011.” In a state decree, “On Priority Measures for the Development and State Support of Small Enterprises in the Russian Federation”, issued in 1993, small enterprise development was described as “one of the most important directions of economic reforms, contributing to the development of competition, supplying the consumer market with products and services, creating new jobs, and formatting a wide stratum of owners and entrepreneurs.” (Bain 2007). However, on paper, the level of entrepreneurship in Russia has remained notoriously low. Whilst for every 1000 people in Russia there are 6 SMEs (Small to medium enterprises of less than 100 employees), there are 45 in the EU and 75 in the USA. A key contributor to the stagnation for formalized small business growth is the enormous amount of regulations and the accompanying schizophrenic processes with which prospective entrepreneurs have to navigate. To officially register a business involves 9 procedures taking a total of 50 days and costing aprox $200 usd (over half of the minimum monthly wage), which is double the OECD average time and cost (IFC 2011).

Russia’s red tape is perhaps best symbolized by procedures in dealing with construction permits. Officially obtaining a construction permit in Moscow involves 51 procedures taking a total of 704 days and $18500 (almost double the annual per capita income) three times the average OECD time and four times the cost (IFC 2011). The most time-consuming procedure is requesting and obtaining the development plan for a land plot at the Moscow Architecture and City Planning Committee (180 days). Officially, this particular procedure is free but according to an interview conducted with a construction company manger, “unofficial costs are typically involved in “expediting” a 180-day process”.

“...SCHIZOPHRENIC PROC ESS ES WH I C H WOUL D - B E ENTREPRENEURS H AVE TO N AVI GATE . . .” In 2004, a study on the formation of small businesses in Russia found that there were approximately 30,000 state documents (not including the laws) regulating enterprise activities (Bain 2007). As a consequence to excessive and difficult rules and regulations, operators are often forced into conducting business off the books and into the realms of the informal sector.

Russia 120 out of 183

Ease of Doing Business Index (World Bank Group) < 70

70-90

90-120

120-140

140-160

160-183

Data N.A

International Finance Corporation (World Bank Group) “Doing Business: Measuring Business Ratings - Russia,” June 2011

Moscow Two

GLOBAL COMPETITIVE INDEX 2011 - WORLD ECONOMIC FORUM

EASE OF DOING BUSINESS INDEX 2011 - THE WORLD BANK

BEST COUNTRIES FOR BUSINESS 2011 - FORBES

INDEX OF ECONOMIC FREEDOM 2012 - WALL STREET JOURNAL

IRAN, IRA RAN N, IISLAMIC SLAM SL AMIC AM IC R REP EP

116 11 6

PALAU PALA PA LAU LA U

MADAGASCAR MAD ADAG AGAS AG ASCA AS CAR CA R

140 140

ALGERIA ALGE AL GERI GE RIA RI A

URUGUAY URU RUGU GUAY GU AY

117 11 7

KOSOVO KOSO KO SOVO SO VO

PAKISTAN PAK AKIS ISTA IS TAN TA N

141 141

GUINEA GUIN GU INEA IN EA

LATVIA LAT ATVI VIA VI A

118 11 8

NICARAGUA NICA NI CARA CA RAGU RA GUA GU A

100 100

BANGLADESH BANG BA NGLA NG LADE LA DESH DE SH

142 142

HAITI HAIT HA ITII IT

VIETNAM V IETN IE TNAM TN AM

119 11 9

CAPE CAPE VERDE VER ERDE DE

101 101

NIGERIA NIGE NI GERI GE RIA RI A

143 143

MICRONESIA MICR MI CRON CR ONES ON ESIA ES IA

RUSSIAN FEDERATION

120

RUSSIAN FEDERATION

102

RUSSIAN FEDERATION

144

RUSSIAN FEDERATION

PERU PER ERU U

1211 12

COSTA COST CO STA ST A RI RICA CA

103 103

KENYA KENY KE NYA NY A

145 145

CENTRAL AFRICAN REP. CENT CE NTRA NT RAL RA L AF AFRI RICA RI CAN CA N RE REP P. P.

COLOMBIA COL OLOM OMBI OM BIA BI A

122 12 2

BANGLADESH BANG BA NGLA NG LADE LA DESH DE SH

104 104

CAMBODIA CAMB CA MBOD MB ODIA OD IA

146 146

BOLIVIA BOLI BO LIVI LI VIA VI A

SLOVAK REPUBLIC SLO LOVA VAK VA K RE REPU PUBL PU BLIC BL IC

123 12 3

UGANDA UGAN UG ANDA AN DA

105 105

UKRAINE UKRA UK RAIN RA INE IN E

147 147

NEPAL NEPA NE PAL PA L

RWANDA RWA WAND NDA ND A

124 12 4

SWAZILAND SWAZ SW AZIL AZ ILAN IL AND AN D

106 106

YEMEN YEME YE MEN ME N

148 148

SÃO TOMÉ AND PRÍNCIPE SÃ ÃO TO MÉ ÉA ND P RÍNC RÍ ÍNC NCIP IPE IP E

JORDAN JOR ORDA DAN DA N

125 12 5

BOSNIA AND BOSN BO SNIA SN IA A ND HERZEGOVINA HER ERZE ZEGO ZE GOVI GO VINA VI NA

107 107

UGANDA UGAN UG ANDA AN DA

149 149

GUINEA-BISSAU GUIN GU INEA IN EA-B BIS ISSA SAU SA U

Officially obtaining a construction permit in Moscow involves 51 procedures taking a total of 704 days and $18500 (almost double the annual per capita income).

To obtain an electricity connection for a newly constructed building in Moscow it takes 10 procedures & 281 days & $174,000 (180 times the average wage)

three times the average OECD time and four times the cost.

th hr times the average OECD time me three and two-hundred times the cost. and an

It takes 10 days and $1,800 to complete every official procedure to import one container into Russia by ocean transport.

It takes 36 days and $1,850 to complete every official procedure to export one container into Russia by ocean transport.

Double the OECD cost, and triple the time

In 2004, a study on the formation of small businesses in Russia found that there were approximately 30,000 state documents (not including the laws) regulating enterprise activities

103 business activities require licences to operate. Including: bread-making and operating an antique shop.

1922

1934

1939

1960

1978

1985

2012 (?)

EXPAN S I ON

Although in the past Moscow has expanded to its infrastructural boundaries radially (firstly from the Boulevard Ring to MKAD ring road in 1961), the new administrative region of Moscow city will not expand to the next ring road (the CKAD; currently under construction); nor have the authorities proposed to merge Moscow City with Moscow Region. Instead,new boundaries were drawn to new borders to the southwest of the existing Moscow City territory. According to the Moscow City Government website, the southern and southwestern outskirts were chosen in part because they comprise “a relatively weakly urbanised sector of the Moscow region” (Moscow City Government 2011), counting some 250,000 people. Essentially, the redrawn borders were

“ . .. TH E E XPAND ED T ER R ITORY I S TO BE P RECISELY IN T HE AREA WH I C H MAK ES T HE LEAST CO N TR IB UT IO N TO TH E P R O B LEMS W HICH AN E XPAN SI ON CO U LD ACT UAL LY RELI EVE ...” chosen to include the least amount of people into Moscow Federal District, or in other words, to exclude the most amounts of people from gaining the benefits of which a Moscow Citizen currently receives. The borders were later revealed to be drawn by the Ministry of Finance; with the aim that the taxrevenues receied from the addition of the new territory would be lower than that which would have to be paid out to the “new Muscovites” which would be captured by the expansion. In making a decision of exclusion, the redrawn territorial borders do take into account the economic contribution to Moscow of those who either currently reside outside and commute into the city or those who are not yet registered as official residents of Moscow City. The expanded territory is to be precisely in the area of the Oblast which makes the least contribution to the problems which an expansion could actually relieve. In the press-conference to announce the expansion, Mayor Sobyanin proclaimed proudly that “We are not only going to keep the present social policy standards in the capital, but improve them annually, and this includes

the handicapped. This is because one of our basic programs is the provision of social support to Muscovites” (Adamova 2011). Consequently in January 2012, the Department of Social Security of Moscow City Government announced that “from July 1 2012, social benefit recipients residing in areas that are to become part of Greater Moscow will be entitled to all benefits currently paid in Moscow City”. The new territory would pick up an additional 250,000 extra social benefit recipients which, based on an average social benefit spendings of $1600 USD per month (as opposed to $800 USD in Moscow Region), would add approximately $400m USD in additional social expenditure per year (Moscow City Government 2012). However, this spending is offset by the project $1bn tax revenue to be captured when the region is incorporated into Moscow City. Thus, the Moscow budget receives a windfall surplus revenue of $600m

Apparently, Moscow is expanding. On June 17, 2011 Dmitry Medvedev proposed to expand Moscow’s borders and to create a new Moscow federal district (Al-Jazerra 2011). Shortly after, Moscow Mayor Sergei Sobyanin announced that the city’s territory would be expanded by more than two times (by 144,000 hectares or 356,000 acres). In August 2011, a draft proposal for Moscow’s expanded borders was released, and in January of 2012 the contestants announced of an international competition to propose a development concept for the new federal district (Al Jazerra 2011). This decision – in essence, an attempt to find a tabula rasa to build a ‘new city’ – is declared publically to be aimed at easing the dependency on the core of central Moscow (relieving the center of the city) by creating new financial and moving governmental functions in the new territory as incentives for the development of workplaces.

Moscow has traditionally expanded its city boundaries on its infrastructural borders - from the Kremlin walls, to the boulevard Ring, to MKAD. The next logical step is expanding the city to CKAD, the currently under construction new ring road.

Whilst if Moscow City were to be expanded to merge with the territory of the CKAD, then an extra $4bn in taxation revenue will be captured. However, by the same calculations, an extra 5m Muscovites have to be eligble for the same social spending, increasing spending to $8bn USD. This leaves a budget deficit of an extra $4bn in extra spending for the CKAD expansion; a significant cost over the SW zone expansion. Furthermore, due to an aging population, calculations by Renaissance Capital project that unless the retirement age is raised, spending on pensions will need to expand by a third in real terms over 20112030 (Tong 2011). As social support is currently the second largest expenditure (after transport infrastructure) in Moscow’s budget, the decision to the draw new borders borders in the SW zone to include as little extra persons as possible, appears to be driven, at least in part, to mitigate the added burden of an increased social security expenditure. The decision to expand Moscow to a new territorial zone which deliberately excludes the most amount of additional citizens implies a short-term decision making goal within the Moscow authorities to limit the amount of social expenditure in order to cut-costs. However, by limiting the expansion zone, it is also limiting its responsibility and scope to deal with effectively the full extents of economic contribution to Moscow, again adding to the Moscow’s inherent inequality.

Moscow Two

SW Expansion

CKAD

100,000 People 50km

Population Distribution, Credit: Rosstat

-$4BN

Captured tax revenue = +$4bn

Captured tax revenue = +$1bn

5m new Moscovites @ -$1,600 per year = -$8bn extra spending social benefits to be paid

250,000 new Moscovites @ -$1,600 per year = -$400m extra spending social benefits to be paid

Projected spending deficit = -$4bn

Projected income = +$600m

600m

I NFORM A L ECO N O M Y S ECTO R S The following section does not aim to provide an exhaustive scientific empirical study of the complete size of the informal economy in Moscow. Rather, by selecting various informal activities which are well known to Muscovites and showing their size, the aim is to reveal their importance to how the city functions.

Gypsy Taxi

Shuttle Trading (челноки)

Markets

There are aproximately 50,000 taxis in Moscow, of which 40,000 are not licenced (Kostina 2011). Average monthly revenues per car range from $1000 $3000 p.m. (from interviews).

Shuttle trading accounts for aprox. 1/4 of Moscow’s imports of goods (Yakovlev 2006). Total imports of goods 2011 $115.5bn. Shuttle traders report revenues of ~30% of value of imported goods.

There are 50 semi-regulated markets which contribute an estimated 18% of Moscow annual retail turnover (Cherkizon 2009).

Total Annual Revenues

$ 1B N

Total Annual Revenues

$ 11 .4 B N

Total Annual Revenues

$ 8 .1 B N

Sex Work

Bootleg Alcohol

Casino

There are aproximately 200,000 sex workers in Moscow, ranging from highclass escort services to street-workers. Each earn around $2000 per month (some more and some less) (Sky 2011).

Illegally produced alcohol acconts for aprox. 60% of total sales. Average alcohol consumption per person per year 18lt. Minimum price standards at $3/lt. (Time 2009)

July 2009, Federal Gov. bans all casinos across Russia (except 4 provinces). Reports that up to 80% all gambling has moved underground. 2008 the legal gambing industry was $1.8m. (Ria Novosti 2011)

Total Annual Revenues

$ 4 .8 B N

Total Annual Revenues

$ 0 .4 B N

Total Annual Revenues

$ 1. 1B N

Moscow Two

Waste Disposal

Illegal Construction

Pornography

Moscow produces 39m tonnes of waste per year of which only 50% is properly accounted for (Wikileaks 2008). The rest is dumped in illegal landfills. The aproximate ‘cost’ for illegal dumping is $200 per tonne

Whilst likely to be understated, 431,200sqm of illegal construction activity was reported in 2011 with an average cost of (housing) construction at $2000 psm (Rosstat 2011).

S.242[2] Russian criminal code: “prohibiting sale and distribution of pornographic materials.” Estimates are that the Moscow porn industry generates $100m in revenues per month (Der Spigel 2011).

Total Annual Revenues

$2BN

Total Annual Revenues

$ 0 .8 B N

Total Annual Revenues

$ 1. 2 B N

Illegal Billboards

Informal Microfinance

Kiosks

80% of all outdoor advertising is illegally placed. 2011 total outdoor advertising value, $380m (Moscow News 2011).

UNDP estimates external informal finance equivalent to 1.8% of Moscow GDP ($495bn). (UNDP 2011)

There are aproximately 20,000 kiosks in Moscow, of which only 20% have the proper operating licences. The average annual turnover is aproximately $330,000 depending on location. (Moscow News 2011)

Total Annual Revenues

$ 0 .4 B N

Total Annual Revenues

$ 8 .9 B N

Total Annual Revenues

$7BN

Whilst the above sectors are not a fully scientific study of the informal economy in Moscow, they all represent conservative estimates of what each sector could be. Taken as an aggregate, they represent a $47bn industry sector, which would be the largest non-resource based company in Russia. Whilst it is obvious that these sectors are already productive, the operators who are in the informal sphere are caught in a trap that places boundaries on how a business can develop. Although informal systems provide a means for enterprise survival, they do not support the growth of enterprises in a legitimate way and by remaining informal they inherantly remove capital from the formal economy impeeding the ability of the state to provide proper services to its citizens. While this paper attempts to show that informal economy in Moscow is already a very large and productive informal sector, it should not be mistaken for an argument for further unbridled liberalization. Working in the informal economy means that the operators are working outside a proper regulatory legal frame work, and hence are unable to fix and record assets in order for entrepreneurs to access credit to grow their businesses. The majority of operators in the informal economy cannot make the market work to their advantage because they are fragmented in non–specialized groups where “labor cannot be divided efficiently and where they lack the means to define, benefit from or enforce economic rights” (De Soto 2000). In Moscow’s “extralegal world,” only the elite are able to create wealth, thereby generating frustration among those outside the “system” (Bain 2007). Despite liberal economic theory that envisions the market as eliminating biases in the allocation of resources, due to the hasty liberalisation process; discriminatory extra market forces have operated, restricting access to resources. For those working outside of the law, informal, or extralegal assets become dead capital when cannot be used effectively for economic transactions, guarantees, contributions or compensations (De Soto 2000). For operators in the informal economy, a lack of proper accounting processes, transactional recording, legal working conditions create a climate where informal operators are unable to access credit or external capital in order to grow their businesses (De Soto 2000). The effects of instability in the Russian economy has increased the risk to banks and financial institutions of loaning money; substantial collateral is demanded in order to receive credit and has resulted in significant interest rates charged, ranging from 20-25% p.a from Nikoil bank and the National Development Bank (Bain 2007). Correspondingly, Among newly established firms, only one in ten manages to get bank loans, and five times as many borrow from private sources. one in ten start-ups to get bank loans, and

R U S S I A

five times as many borrow from private sources (Polishchuk 2002) Significantly however, demands of a proper registration and residency permit are an impediment to many merchants in the informal

“ . . .WH E N WORKI N G OUTS I DE OF TH E L AW, I N FORM A L , ASSETS B ECOM E D E A D CA PI TA L W HEN TH EY CA N N OT B E US E D E F F ECTI VE LY FOR C RE D I T COL L ATE RA L , G UA RA N TEES, CON TRI B UTI ON S OR COM PE N SATI ON S. . .” economy – hence, only one third of Muscovites (who work in the non-government sector) have a bank account (Pravda 2004). Consequently, we see the rise of many microfinance options, of which flyers litter many metro station entrances. These services are provided by individuals who have the necessary requirements to borrow money from a legitimate bank, after which the money is subsequently lent to the final borrower. A call to a micro-lender asking for a $2000 loan revealed that the terms were that $4000 would have to be paid-back after 6 months. Viable credit is not available to entrepreneurs who operate in the shadow economy, consequently they will always be excluded from opportunities to develop a fully legitimate enterprise (De Soto 2000).

Top 15 Non-Resource Companies Company

Sector

Sales volume in 2010 ($ million)

Moscow Informal Sector (Sample)

Diversified holdings (Transport, Retail, Construction Infrastructure, Media, Leisure)

$47.1bn

РЖД (Railways)

Transport

$43.9bn

Sberbank of Russia

Banks

$31.7bn

AFK System

Diversified holdings

$28.0bn

Transneft

Transport

$14.7bn

VTB Group

Banks

$12.4bn

X5 Retail Group

Tetail trade

$11.2bn

Vimpelcom

Telecommunications

$9.5bn

The Svyazinvest

Telecommunications

$9.2bn

Magnit

Retail trade

$7.7bn

Megafon

Telecommunications

$7.1bn

OPK Oboronprom

Engineering

$5.9bn $5.8bn

Auchan

Retail trade

Stroygazmontazh

Infrastructure

$5.1bn

METRO

Retail

$4.3bn

If calculated as an aggregate, the sample taken in this report would represent the largest non-resources company in Moscow. Source: Forbes 2011

Moscow Two

TRACKI N G M ON EY F LOWS As a closer examination into the micro-economy of firms in the informal sector, the Russian phenomenon of shuttle trade (or челноки) was closer examined. Aproxmately 50% of the price of a product sold in a market is due to bribes to circumvent inoperable laws.

the cost of buying goods, includes the following items: payment for the “shop-tour”, cost of transportation of goods, rental for a retail outlet, wages paid to a hired salesperson include travel expenses and cargo agents.

Coinciding with the liberalisation of the Russian economy, the rise of smallscale wholesale open-air markets was closely related to the phenomenon of “shuttle” imports of consumer goods, which emerged on a massive scale in Russia in the early and mid-1990s. Shuttle trade is the phenomenon of traders who shuttle back and forth between major port cities (outside of Russia) buying goods from cheap sources and selling them back in Russia.

Travel Expense. Shuttle traders typically pay a fixed cost for a ‘shuttle tour,’ who arranges the trip. Usually a fixed ammount aproximately $300-$400 for a single 3-4 day trip (Yakovlev 2006). Naturally, depending on starting and end point.

Whilst its peak was in the mid-90s, it still happens to an extent. According to some estimations, up to 10 million Russians were engaged in shuttle business at all its stages (Yakovlev 2006). It is estimated that the size of shuttle trading is equivalent to 1/3 of Russian imports (IMF 2007).

Cargo Agents. Though in mid-90s there still remained traders who carried their cargo in-flight, today, typically the mechandise is offloaded to cargo ‘agents’ who pay-off custom’s officials to underreport cargo and thus avoid excess customs-tariffs. Typically 20% of worth. (Yakovlev 2006)

In the 90s, permission to import goods for up to $5000 duty-free was given to physical persons and made the legal base for this success. Whilst shuttle trade were blamed practices leading to taxation payments and customs duties not reaching state finances, due to the inherantly long supply chain, it is also recognised for the economic and social benefits which it provides to a number of participants. The practice of shuttle trading not just provides economic benefits to the traders themselves but also the organisation of shop tours, transportation, storage and sale of goods at wholesale markets and in retail trade. While on a field trip to Izmaylovo market and The All-Russia Exhibition Centre, several of the traders confirmed that their goods were supplied by shuttle traders, with the goods many Moscow originating from a key transit point from Laleli market in Turkey. The reason that Laleli market appears to have gained prominence is due to two factors; a relatively easy visa-on-arrival availiable to Russian citizens, and its proximity to Moscow. While, traders were not more forthcoming or knowledgeable, this initial observation is backed by a report (Yakolev 2003), which follows money flow through various supply chains (illustration below).

In 2006, customs were further restricted that only $2000 worth of goods were allowed to be brought in to discourage shuttle trade. Whilst this had the effect of slightly reducing the amount of shuttle trade, Yakolev (2003) claims that this merely increased the payments made to custom’s officials in under-reporting.

Traditional structure of business expenditures in the “shuttle business”, aside of

Consumer

100%

Whilst taxes are not paid (or the less than full ammount paid when underdeclaring goods), a significant ammount of the product costs is associated with circumventing the law (shown in red). At the mark ets, krysha is paid to ensure that local police do not hassle traders, and for taxation officials not to investigate. Cargo agents pay customs officials to under-declare the goods imported. (Yakovlev 2006).

Infrastructure of Russian “Shuttle” Business (челноки). Funds paid to circumvent laws shown in red. Source: Yakolev 2004

25%

Krysha

10%

Rental

(Retail) Market Sellers

50%

Authorities

50%

Krysha

50%

Authorities

20%

Authorities

40%

Factories

40% Cargo Agents

Ismayevo

50%

Shuttle Traders

30%

Laleli Market Shops

10% Travel ‘Tour’

If on larger scale, its unattractive environment for business, tourists and ultimately citizens, and on a regional scale it lags behind in small business competitiveness, Moscow cannot claim to be at the level of a global city. The fast deindustrialization after the 1990s has generated a number of left-over and derelict tracts of land scattered along the city, which, in combination with lottery privatization of assets gave opportunity for â&#x20AC;&#x153;insidersâ&#x20AC;? to get access to large plots of valuable land while reducing considerably industrial output level. If one takes the analogy of special economic zones in Russia, introduced to promote regional development and integration into international markets, it is possible through a specific tax regime, administrative support and ready-made infrastructure to ensure entrepreneurs and investors find the right environment to run their businesses. As a catalyst for the redevelopment of former industrial sites (many of which fail to take advantage of their potentials and extraordinary location), Moscow could very well apply such an approach. Market speculators are waiting for the next boom in property prices, but in the meantime, the city can still use tools to capture land value gains: introducing a land value tax, decreasing other taxes and ensuring a proper bureaucracy accelerator. An environment as such would promote the proper redevelopment of land plots, as leaseholders or landowners would be discouraged from keeping a distinctive lot vacant or underdeveloped and subsequent increase in activity would promote economic development at a local and regional scale, instead of bringing in the collective imaginary of western post-industrial sites as loft apartments and art space. By reassessing the economic status of underdeveloped areas in Moscow, this research intends to demonstrate that such a taxation regime cuts down inequalities compared to the existing scheme, or business as usual scenario, as it would grant the city government more funds to promote public investment. Moscow could capture land values gains which are most often capitalized by leaseholders and speculators while promoting competitiveness of the city on a larger scale.

L A N D LTD.

Russia, land of active powerstations next to abandoned car factories next to residential areas

Dear Mr. Gorbachev, The movement of the Soviet Union to a market economy will greatly enhance the prosperity of your citizens. But there is a danger that you will adopt features of our economies that keep us from being as prosperous as we might be. In particular, there is a danger that you may follow us in allowing most of the rent of land to be collected privately. It is important that the rent of land be retained as a source of government revenue. While the governments of developed nations with market economies collect some of the rent of land in taxes, they do not collect nearly as much as they could, and they therefore make unnecessarily great use of taxes that impede their economies–taxes on such things as incomes, sales and the value of capital... The rental value of land arises from three sources. The first is the inherent natural productivity of land, combined with the fact that land is limited. The second source of land value is the growth of communities; the third is the provision of public services. All citizens have equal claims on the component of land value that arises from nature. The component of land value that arises from community growth and provision of services is the most sensible source of revenue for financing public services that raise the rental value of surrounding land. These services include roads, urban transit networks, parks, and public utility networks for such services as electricity, telephones, water and sewers. A public revenue system should strive to collect as much of the rent of land as possible, allocating the part of rent derived from nature to all citizens equally, and the part derived from public services to the governmental units that provide those services. When governments collect the increase in land value that results from the provision of services, they are able to offer services at prices that represent the marginal social cost of these services, promoting efficient use of the services and enhancing the rental value of the land where the services are available. Government agencies that use land should be charged the same rentals as others for the land they use, or services will not be adequately financed and agencies will not have adequate incentive or guidance for economizing on their use of land. Some economists might be tempted to suggest that the rent can be collected publicly simply by selling land outright at auction. There are a number of reasons why this is not a good idea. First, there is so much land to be turned over to private management that any effort to dispose of all of it in a short period would result in an extreme depression in prices offered.

this letter was signed by: Nicolaus Tideman, Professor of Economics, Virginia Polytechnic Institute and State University. William Vickrey, President for 1992, American Economic Association. Mason Gaffney, Professor of Economics, University of California, Riverside. Lowell Harriss, Professor Emeritus of Economics, Columbia University. Jacques Thisse, Professor of Economics, Center for Operations Research and Econometrics, Universite Catholique de Louvain, Belgium. Charles Goetz, Joseph M. Hartfield Professor of Law, University of Virginia School of Law. Gene Wunderlich, Senior Agricultural Economist, Economic Research Service, U.S. Department of Agriculture. Daniel R. Fusfeld, Professor Emeritus of Economics, University of Michigan. Carl Kaysen, Professor of Economics, Massachusetts Institute of Technology. Elizabeth Clayton, Professor of Economics, University of Missouri at St. Louis. Robert Dorfman, Professor Emeritus of Political Economy, Harvard University. Tibor Scitovsky, Emeritus Eberle Professor of Economics, Stanford University. Richard Goode, Washington, D.C. Susan Rose-Ackerman, Eli Professor of Law and Political Economy, Yale Law School. James Tobin, Sterling Professor Emeritus of Economics, Yale University. Richard Musgrave, Professor Emeritus of Political Economy, Harvard University. Franco Modigliani, Professor Emeritus of Economics, Massachusetts Institute of Technology. Warren J. Samuels, Professor of Economics, Michigan State University. Guy Orcutt, Professor Emeritus of Economics, Yale University. Eugene Smolensky, Dean of the School of Public Policy, University of California, Berkeley. Ted Gwartney, Real Estate Appraiser and Assessor, Anaheim, California. Oliver Oldman, Learned Hand Professor of Law, Harvard University. Zvi Griliches, Professor of Economics, Harvard University. William Baumol, Professor of Economics, Princeton University. Gustav Ranis, Frank Altschul Professor of International Economics, Yale University. John Helliwell, Professor of Economics, University of British Columbia. Giulio Pontecorvo, Professor of Economics and Banking, Graduate School of Business, Columbia University. Robert Solow, Institute Professor of Economics, Massachusetts Institute of Technology. Alfred Kahn, Ithaca, New York. Harvey Levin, Augustus B Weller Professor of Economics, Hofstra University.

Second, some persons who could make excellent use of land would be unable to raise money for the purchase price. Collecting rent annually provides access to land for persons with limited access to credit. Third, subsequent resale of land would enable speculators to make large profits unrelated to any productive services they offer, resulting in needless inequity and dissatisfaction. Fourth, concern about future political conditions would tend to depress offers. Collecting rent annually permits the citizens of future years to capture the benefits of good future public policies. Fifth, because investors tend to be averse to risk, general uncertainty about the future will tend to depress offers. This risk aversion is sidestepped by allowing future rental payments to be determined by future conditions. Finally, the future rent of land can more justly be claimed by future generations than by today’s citizens. Requiring annual payments from the users of land allows each year’s population to claim that year’s rent. While the proceeds of sales could be invested for the benefit of future generations, not collecting the money in advance guarantees the heritage of the future against political excesses. (Tideman, N. 1991)

Land, Ltd.

A P OLI CY WH ERE L A N D H A D N O PR I CE

Contrary as it might seem, this open letter was not drafted by socialists, but by a group of distinct professionals: economics professors who found themselves at the opposite side of the political spectrum, market economists, and even libertarians who supported the ideas of Henry George.

(2) the absence of land prices removed any incentives to redevelop built-up areas, therefore, land was almost never recycled. The result of this was enclaves comprised mostly of dead land with a low level of economic activity and negative environmental impact - of which the vast warehousing areas required by industry was a large part.;

Yeltsin’s “shock therapy”, supported by World Bank and IMF, has stripped off the opportunity to follow the land value and to keep natural resource wealth in government hands. Michael Hudson is extremely critical on how the “good performance” of the oligarchs reflects Russia’s crippled ability to tax this wealth, which is a legacy of the pre-privatization of public domain, has been stripped away in a simple asset grab (Hudson, M. 2004).

(3) fragmented urban fabric by a dense railway network mostly used for freight transport reduced usability of adjacent lands while leaving exterior land more expensive to service. (Bertaud and Renaud 1995).

What if such a model would be applied today? This project aims to describe whether this is practical, as well as to examine the consequences of such a strategy. First, it is important to examine the urban environment in the context of theories about land economics, and secondly to develop a projection on the effects on urban land (as proposed by Tideman) in a scenario where such a scheme is possible.

According to market economics, the most important factor determining quantity and location of land consumed are land price differentials, but in an environment where these drivers are absent, consumption of land space per job or resident is not considered, only its productive capacity is considered.

“ . ..T H E A B SE NCE O F LAND PRIC ES R E MOV ED ANY I N C E N TIV ES TO R ED EV ELO P B UILT-U P A REAS...” Over 70 years of soviet planning, urban growth principles have produced different spatial and efficiency outcomes. As land was nationalized and administratively allocated for either people or business, it left a profound and negative impact on the internal organization of cities. This primarily manifested as follows: (1) it became administratively simpler to respond to land demand pressure by developing at the periphery, than to redevelop well-located areas with obsolete land use. The effect of this was an immediate increase in density in the periphery;

300

2012 257 ha

250 1960 85 ha

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1941 1935 35 ha 30 ha

150

> Moscow area expansion (Makhrova and Molodikova, 2007)

100 1905 10 ha

1917 21 ha

1984 108 ha

2001 109 ha

1959 38 ha

1929 22 ha

0 2020

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Rapid privatization was a primary objective of the Yeltsin government that initiated a large-scale program in 1991 to privatize both state industrial enterprises and housing. Many enterprises were privatized, although not restructured, and they remained under the control of their Soviet-era managers (Malme 2001). The process of privatization is without a doubt the main determinant of the current distribution of ownership in Russia. During the Perestroika era, especially between 1989 and 1991, control of the branch ministries over the enterprises ceased and gave rise to incidents of spontaneous privatization. Specifically, in 1989, employees were given the opportunity to lease the assets of state enterprises with the right of a later buyout. From the end of 1992 until mid-1994 a mass privatization program was in force and virtually all small enterprises and approximately 15.000 out of 24.000 medium and large enterprises were transferred into private ownership (Sprenger 2011). Influenced by interests of enterprise insiders and the industrial lobby, this program gave a major emphasis to a rapid privatization. Sprenger (2011), concludes that the choice of a privatization option by company employees (insiders) was affected by their desire to insurance against unemployment, especially in firms in financial distress. Additionally, the ability of workers to agree to the decision to sell their shares to outsiders increased worker ownership. Finally, the prediction that better outside opportunities (alternative employment, outside wages) lead to less insider ownership is supported in the evolution of managerial ownership between 1994 and 1999. Moreover, in result of this fast pace in privatization, a rapid growth of small businesses occurred mainly due to the effect of ‘‘informal’’ economic relations on the micro-level, given the fragile political framework for regulation of the market economy and its’ institutions (Rudolph, 2005).

LAND OWNERS AND SHARE OF PROPERTY 222 NATURAL PERSONS 455 LEGAL PERSONS

1448 CENTRAL GOVERNMENT

2526 LOCAL GOVERNMENT

One key issue in the privatization process is the fact that land which unarguably can be considered as one of the major assets of industrial enterprises, was not taken into account to calculate the nominal value of shares. By this, the centralized economy approach to land as publicly owned and without value was transferred as well, without a price to the hands of new turned shareholders. Still today, the sense of land ownership and not just building or structures is one of the foremost issues that privatization policies have failed to tackle with increasing lack of responsibility of all stakeholders, which ultimately reflects in the way properties are being used or left idle and consequently on public space idiosyncrasies.

“ . . . PRI VATI ZATI ON I S UN L I KE LY TO B ECOM E L ESS ATTRACTI VE , AS M A RKE T VA LUE OF PRI VATI Z E D L AND IS M A N Y TI M ES G RE ATE R THAN TH E COST. . .” With the transition to market economy, Bertaud (2010) considers one solution could have been to ask companies to pay the market price for the land they occupy and in the case where they wouldn’t be able to afford, they should declare bankruptcy. Instead, companies were given a subsidy on the cost of land occupied which brings them to internalize their costs and prolong their status, while new infrastructure is developed elsewhere, leaving existing infrastructure highly underused. To boost real estate market development, a 1995 presidential decree authorized legal entities and individuals that had permission to build on a parcel to register ownership of the land. Contrary to the expected result, many chose not to purchase the land, all in all nothing would change as long as rents and land taxes remained minimal, the ownership wouldn’t make a difference. Moreover municipalities; Moscow included, did not promote the sale of assets opting for recurring cash-flows (Malme, 2001). Only in 2001, after the approval of Land Code, has Russia defined effectively details on private and public land ownership rights. It has opened land ownership to individuals or legal entities opening a new stage for the real estate market defining rights for acquisition of government, federal or municipal owned land Markovich (2001). Pyle (2011) advocates that until 2002 the existence of real estate- as offices in the enterprise plot would promote privatization of land as a foreseen stream of rental revenues, while if there were any social infrastructure, as housing or medical facilities, privatization would be less likely to have taken place. Already in 2007, a new legislative framework “Major Amendments to Land Privatization Legislation” promoted purchase of plots at prices that, particularly for Moscow, would not exceed 20% of cadastral value. Nevertheless, under Luzhkov administration formal and informal barriers limited land ownership rights leaving new owners to burdensome registrations, while continuing to be onerous for the Moscow government. As lease rates were established at local administration level when compared with taxation rates (that were mostly at federal level), there was no incentive for local administration to make land privatization procedures simple and fast, while it was possible to increase revenues from land leasing.

17% CITIZENS PROPER

11% LEGAL ENTITIES

72%

STATE/MUNICIPAL

LEGAL ENTITIES

MOSCOW REGION

97%

STATE/MUNICIPAL

MOSCOW CITY

The process of land privatization in Moscow has undergone many changes. For example, the companies that managed to get title to land in Moscow before 2010 were the exceptions, due to the fact that the city’s former government expressed unwillingness to give up the right to land. But these exceptions became the rule with a new mayor and massive rearrangements in the Moscow government. For example, many institutions have changed their leaders in Moscow and the Department of Land Resources, which plays a central role in the process of land privatization in Moscow, is no exception (Lidings, 2012) According to calculations based on data from Department of Land Resources of Moscow for this year there are still 617 land plots forecasted for auction, while only 349 have available data. The average area of each plot equals 7500 m2. On the other hand, for auctions already realized during 2012, the city government was able to collect more. Government gained 44% of offer value from 70,25 MRub in 2 auctions of 9 land plots on an average of 1235 m2. (DLR. 2012)

Land, Ltd.

I NDUST RI A L LA N D U S E

Rapid deindustrialization, together with an increasing shift to a service economy, left Moscow with a vast amount of land underused. Although this fact is well known by Muscovites, there are not many (if any) effective policies to address it. This problem is, however, representative of a process that other cities have also faced in a post-industrial era, so therefore solutions to incentivizing the development of such land do have precedents. Given Moscow’s problematic dimension and policies indecision, addressing this issue demands urgency. In socialist Moscow, industry and science have converged, and this merger materialized in a series of research institutes and technical facilities in areas of rocket science, mechanical and electrical engineering, metallurgic, tractor and aviation industry, among many others. After 1991, industrial production staggered into recession and manufacturing production decreased more than 30% in only two years. Throughout the 1990s, almost half of those employed by the city were engaged in industrial production, by 2002 it shrunk to only quarter. While 40% of Russia’s scientific organizations and 90% of companies of the Central Federal Region were located in Moscow, jobs decreased by more than 3 times (Becker, 2006). After overcoming the sorrows of market economy transition, it appears that industrial infrastructure is suffering from a perpetual hangover. Adding to it is the fact that General Plan aims for a massive reduction of industrial land use by 2025. Industrial land cannot be understood solely by its manufacturing function; in fact, it cannot be understood at all as any category in particular. There is not a unique type of industry that stands out, rather an amalgamation of trade, manufacturing, warehousing and services functions that require an integrated approach. Instead of proposing a radical change and a shift to a totally new function, the proposed task is to allow this area to survive and be more resilient to the changes in time. According to Moscow land use balance from 2011, industrial land use accounts for about 17-20% of Moscow land (see table), including heavy industry, transportation, scientific and technical use, in a total of 20-22 thousand hectares. Today there are over 1300 large and medium enterprises and more than 1000 research institutions of science and scientific services, with over 80% of it being concentrated in the industrial zones (CRE 2012). For the purpose of this project the denomination of underdeveloped areas is applied to industrial land use that is identified in General Plan for compression, decrease and partial stabilization. These qualifiers applied by General Plan in no case distinguish from each other, once apparently there seems to exist a lack of logic in such categorization, as to the existing territories as well as strategic and coherent approach as a whole. A detailed description of the area and matrix of qualities is presented next. The first approach to address this topic has been done in 2004 with a “Target Program for industrial redevelopment in the city of Moscow for the period 2004-2006” to withdraw all industrial areas from the centre district. Later,

“ . ..T H E R E WER E AR O UND 350 P RO DU CT IO N FACILIT IES OBSOLETE AND ABSOLUTELY U N PR O FI TA BLE W HICH W ERE B EIN G LE ASED O UT FO R OFFIC ES A N D WAR EHO USES. . . .”

the Master Plan of Moscow Urban Development until 2025 stated the same purpose. Alternatively, Master Plan of Moscow city 2025 projects for that year a reduction of the industrial and production areas from 15.6 thousand ha to 7.5 thousand ha while reducing partially, production territories and introducing social-business functions and scienceconsuming production. Despite the number of programs and discrepancies in figures as well as disparate policies, industrial areas are still under intervention, as such, in December 2011, the Committee on Architecture and Urban Planning held a tender for the redesign of seven areas, with a budget of more than 160 million rubles. Although politically the issue has been failing to engage in a whole redevelopment of these locations and actions to tackle the topic are repeatedly endless, the market is answering naturally, with examples of companies that diversify their activity just to take opportunity from the real estate market. Through liquidation of industrial facilities followed by expansion of businesses functions and offices premises, or through addition of other activities as trade and logistics, industrial zones have diversified from the original concept. Already in 2004, just in central Moscow, there were around 350 production facilities obsolete and absolutely unprofitable. Theses were being leased out for offices and warehouses (Maternovsky, 2004). The Glavstroy Corporation, owned by Oleg Deripaska, is reviving a project to build its own industrial zones. The corporation’s management decided to relocate the production areas of its Moscow facilities outside the Moscow Ring Road, and to build 1.5 million square meters of residential and commercial property on this territory (BASEL, 2011). At the same time “Your financial trustee” group has purchased a controlling position in the “Automotive Plant no. 6” and relocated activity to the east of the city (CRE, 2012). In a not extended analysis of past transformations, approximately 9 out of 10 transformations occur after liquidation of the former industry, meaning that jobs are lost and social value creation is reduced, once redevelopment is for elite housing. In respect to land tenure, soviet law created two specific rights to land – lifetime hereditary possession and permanent use –, which are basically equivalent except that the first is granted for private and the latter for commercial use. By this, most privatized companies held their lands in the form of permanent use, this did not allow them to dispose of land through sale to third parties. As these contracts were for an unlimited period, no due date was specified, in case government would want to dispossess a permanent user, it would face a legal obligation to compensate the owner at market values. Had this way occurred, owners would have moved their activities elsewhere, otherwise companies who hold land under permanent use rights are required to pay a tax, as landowners do at the same rate as defined by land cadastral value (Pyle, 2011).

< Mowcos’s industrial land use considered for decrease and extintion in use (according to master plan of Moscow).

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Land, Ltd.

walking distance to metro and tram. possible to rent infrastructure. redevelopment opportunity, high traffic

proximity to metro and bus. redevelopment opportunity, average traffic

proximity to metro and tram. possible to rent infrastructure. redevelopment opportunity, high traffic

proximity to metro, train and bus. possible to rent infrastructure. river proximity. elements of historical/architectural value

walking distance to metro and tram. possible to rent infrastructure. redevelopment opportunity

proximity distance to metro and train. possible to rent infrastructure. redevelopment opportunity

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OT HE R INDUST RY

A E ROS PACE INDUST RY

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WO O D & WO O DWO R KS

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PA PE R & PUB LIS HING

E LECT RO NICS

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WAT E R & WAST E

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O F F ICES

LO G IST ICS

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walking distance to metro, train and bus. low traffic. possible to rent infrastructure. redevelopment opportunity. eventual remediation

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Urban design may be a tool for shaping the city and to support its development, but design can also apply to regulations and policies. In a market economy, municipalities can influence urban development by defining a proper environment in terms of land use, a system of consistency and coherence of regulations, taxation and investments in infrastructure. In the long term, this policy design leads the market to respond to incentives and/or disincentives and therefore shape the urban space in accordance with the given conjuncture.

Although the redevelopment may be difficult and expensive, it has to be addressed, considering the pain of having public infrastructure that is underutilized. Broken urban fabric with consequences in social and economic terms, while it is important to note, the need to not exclude the need to build more primary infrastructure to allow residential and commercial development. It is known, as in the past, an important catalyst of change for the Moscow Ring Road into a main regional trade area has been the special program “Gubernskoe Koltso” (Regional Ring) developed by the government of the Moscow Oblast. Its aim was to increase budget revenues and job growth by luring shopping center investors to the region. This policy has made it much easier and cheaper to develop large retail projects in the Moscow Oblast. As a result, in 2007 only three of the Moscow Ring Road malls were situated within Moscow’s city boundaries, the remaining 17 falling within the jurisdiction of the Moscow Oblast (Makhrova and Molodikova, 2007). With this, the rivalry between the city and the regional authorities has heated up. On the other hand, the real estate industry has improved mostly by bringing new development outside of the city, always requiring further expansion of essential infrastructure. At this point, as the incremental cost of infrastructure at the periphery may very well be rising, one solution taken by developers is to invest in that same essential infrastructure in order to capitalize their investments. As an example, result, the particular case , where Crocus Group has invested, in what is considered the first private involvement in Moscow metro network atMyakinino metro station, outside of Moscow northwest border, in the expectation of bigger returns. Aras Agalarov, president of the group on the moment of opening new metro station explains: “We decided to make station: we invest 600 000 roubles and we receive a guaranteed inflow of visitors to our concert hall more than 6 000 seats and to fairgrounds”. He adds, “There should be a financial centre, City, as they say abroad, we have already created overall infrastructure for it. One should understand that the City should be started not with offices but with infrastructure development. To make it easier for people to park their cars, to get to the area and to have a place to hold negotiations and meetings” (Crocus, 2009).

For the purpose of this project, the discussion of past transformations of industrial sites to pretentious estates at the power of realtors and speculators is not addressed, although as mentioned a recurrent fallacy when projecting scenarios for future redevelopment. The profitability of the projects activated by public sector has to be measured not only from the economical point of view but also social and environmental, whereas not always all externalities are addressed, particularly if the longer term perspective is not considered.

Jing Ling which was considered in 2009 the 2nd most popular brand in Berlin was produced by Baltic Tobacco Company is one of the examples. (SPIEGEL, 2009)

Bertaud (2003) advocates that an increasing demand for car ownership and consequent decline of public transport system is encouraged by the disconnection between location of infrastructure and demand for it. Given that former industrial sites are highly served by the metro and train, and some by bus and tram, the fact that these areas are underdeveloped leaves the system underused, not capitalizing the investments. According to the Moscow City Transportation Department (MN 2012) this mismatch live-work translates in about three hours spent to get to and from work by average Muscovite. This is the reflection of a fragmented labor and residential market that further helps to weaken the city’s economy. In an interview with Aleksander Vysokovsky, Director of the Graduate School of Urban Studies and Planning, from High

Land, Ltd.

Economic development and ultimately urban development functions through a series of incentives and disincentives; usually special economic zones are designed not only as object of economic activity but also politically and in geographical sense, so that businesses residents can develop their activity in an environment where certain incentives are put in practice. In Russia, the first steps in developing special zones were already taken in Soviet times at the end of the 1980s. In the 1990s, some 10-20 special zones operated in Russia. These zones received a lot of criticism, since they were accused of having become legalized places for illegal business. Kaliningrad, for example has been a special economic zone since 1991, but there has not been an economic boom, instead, a smuggling economy has developed, with residents selling cut-rate cigarettes and other goods in comparatively well-off Poland and Lithuania. Jing Ling which was considered in 2009 the 2nd most popular brand in Berlin was produced by Baltic Tobacco Company is one of the examples. (SPIEGEL, 2009) Russia’s early laws establishing special economic zones, however, did not produce self-sustaining results due to a lack of appropriate legal and physical infrastructures, as well as political and economic instability. In addition, concerns over corruption and the imbalance of power between local and central authorities contributed to their failures. (Povarchuk, 2004). Only in 2005 was new regulation created to cope with stagnated economy and promote economic diversification, thus developing manufacturing, tourism and gambling, logistics and innovation zones. Incentives in these zones are very often translated in taxbreaks, administrative support and ready-made infrastructure. The question arising now is how to design policy instruments that effectively activate underdeveloped land in Moscow not just from the land use point of view but at the same time increasing the competitiveness of the city. In the particular case of Moscow’s underdeveloped land or megasite as defined earlier, it can be designed as a special zone, a zone with a set of incentives that could be the incubator for actual companies to prosper, and with added investments to the area translating in a generation of new small and medium enterprises to develop and a more compact city as if centripetal forces would act over Moscow borders contrary to actual forces. Further on, different policies are identified in order to grant entrepreneurs the possibility to prosper in the long term while granting to the public sector enough funds to maintain its services and promote public investment. As earlier demonstrated, the actual market value of the land that is actually not being captured by the local government is per se enough to justify such an action. Moreover the future returns on investment on infrastructure or change of permitted land use in such locations is also recognizable by the simulation presented. In answering to what difference does it bring to these areas, and what value can a special economic zone add to it, the following points are worth mentioning: 1. Land use Moscow city master plan projects a reduction in land use for production and at the same time an increase in social and business functions. Although increasing costs with environmental compliance as well as transportation in particular cargo, existing manufacturing facilities represent a burden to Moscow. With a proper incentive structure, manufacturing units would be encouraged to move or improve their processes and greatly reduce the areas for warehousing. On the other hand, the procedures to change the use of land represent an effort that experienced entrepreneurs prefer to avoid thus influencing them to move elsewhere. If only such a bureaucracy could be simplified in a similar way as in special economic zones, operations could be organized to particular areas of the city depending on their activities and therefore create opportunity to generate synergies between them. 2. Land privatization and registration The aim of Moscow Land Resources department is to manage and dispose in due course land owned by the City of Moscow, including those located outside

Private land ownership rights can be transferred through land auction or direct purchase. In the latter, comparing administrative procedures time between the city of Moscow and a Special Economic Zone, in Moscow it takes more than 5 times more time, from the moment of preparation of documents to land plot registry to the transfer of rights to the purchaser (LINDINGS, 2012). For example, in Dubna, Moscow Region, where a Special Economic Zone for research and development is located it takes 53 days from the application to Special Economic Zone Council to signature of agreement and emission of Resident certificate (SEZ, 2012). If only such a procedure would exist in Moscow underdeveloped land, private ownership of land would be promoted while businesses could consider land as an asset for possible business financing.

Moscow strategic plan for transport infrastructure development aims to increase public transport volumes while decreasing home to work commuter time. With a budget of more than RUB 1,7 Billion, more than 20% of city’s budget, the program is expected to deliver new transportation infrastructure and improve existing one. At the same time, railway ring has a total investment of RUB 440 Billion, major part of which is for commercial property construction. Thus, land value will be maximized. On the contrary, monorail is subjected to divestiture (LENTA, 2012), while it remains an example of underused infrastructure. Given the fact that number of passengers transported can be increased, which is only possible by increasing the need to locate in adjacent areas, this infrastructure may as well be maximized. In a boost to certain activities, Russian authorities have reduced profit taxes for companies in educational and healthcare sectors. Into force since the end of 2011, particular services have now opportunity to be more§ competitive by having opportunity to have lower prices and subsequent quality improve. Although it is considered a short term solution, Tatyana Komissarova from the Higher Schools of Economics, sees the main burden not on profit tax, but on salary related tax, as a company with highly qualified employees, salary costs can amount to 50 per cent of total expenses (RT, 2011).

the city limits of Moscow, as well as land within the territory of Moscow City, where State ownership is not demarcated. For the aim to succeed privatization of land and auctioning must be promoted and simplified. If on the other hand land is kept under public ownership, and through primary lease at “free lunch” prices primary leaseholders are given the opportunity to capture land value increases. In this scenario the Moscow city budget will struggle to raise enough revenues to promote redevelopment, while encouraging land speculation by those primary leaseholders. The authorities ability to manipulate rental rates leaves enterprises vulnerable to predation. Many surveyed companies report pressure from officials, threatening their lease rights could be unilaterally and abruptly terminated (Khakhalin, 2009). While companies cannot afford to buy their land, it is thus not terribly difficult to understand why they might not regard leasing as a more attractive option than perpetual use. If only special conditions were maintained for the purchase of land plots at discounted prices with a simplified procedure, private land ownership would be promoted, granting new landowners the right to optimize the use of their assets.

2. Infrastructure The metro is said to be running over capacity, while only 40% of its length is overloaded (MOS, 2012b). IN addition, the Monorail is to close down (MOSCOW NEWS, 2012c), being one of the examples of underused infrastructure, proven to be a not profitable public investment for 8 years since the opening. The fact is that if existing infrastructure is not properly used it won’t help to capitalize the value from land on the locations which are being served. As transportation investments tend to increase nearby land values, primary leaseholders and ultimately landowners are given a “free lunch”; their returns are increased at the cost of public investment. Inner city connection with universities and research institutes make for the best location to promotion of R&D initiatives as the availability of well trained personnel, together with the possibility to exchange with international environments gives opportunity to open up new concepts as a space for innovation and creativity.

3. Competitiveness Moscow is recognized as not competitive for small and medium enterprises on a National level. According to one study, the city lags behind Moscow Region. In the ranking of the 40 Regions by the Small and Medium Enterprises Development environment index Moscow is ranked 17th place while Moscow Region is in 1st place (OPORA, 2011). This disparity between these two federal forces makes it easier for SME type businesses to have access to major facilities (including workforce and financing) from Moscow, without really supporting the high operating costs of the city itself. In such an environment where business does not have any incentive to locate in the city, the results of a survey by city government to 2000 business owners are not surprising; 37% considers administrative barriers to be the cornerstone of businesses reluctance, followed by excessive tax burden (30%) and expensive lease of premises (17%) (MG, 2012c). One other aspect that is damaging SMEs concerns the fact that according to the Russian tax system, companies are required to have value added tax, social security tax, and property tax even if they are unprofitable. Hence, SMEs are left with no time to generate profits from their activity from the year 0. Meanwhile, existing small businesses in Moscow struggle to survive in a fierce environment in a megacity that does not design policies for, where continuing current economic policies ultimately businesses might as well be big.

4. Existing activities Recurring function changes are not accompanied by large-scale reconstruction of specialized facilities or the reorganization of the industrial areas together with policies to promote jobs. Approval by the government of the low rental rates for land for business and science industry led to the formation of industrial sublease market cases. As businesses have to cope with existing high rental rates, tax burden on their profits, on wages as well as sales, it leaves them with very little opportunity to develop. Often, if not always, these taxes have a reverse effect, acting like a disincentive. High taxes on employment (social security taxes), reduce salaries and promote informal methods of remuneration. High taxes on profits,

Almost as twisting the status quo, innovation zones such as Zelenograd (special economic zone located in the north of Moscow) are granted by law, particular tax discounts on salary related taxes that promote innovative jobs creation. This incentive promotes not only the creation of job positions on certain fields, but also translates in higher salaries

Company Mosselmash was created after transformation of a state enterprise in 1992. Since 1940 leader providing all enterprises in the sector of machinery for agriculture; no more of a leader, today’s main activities include manufacture and sale of machine-building purposes and providing services for renting out their own non-residential real estate, apart from the implementation of the transport of cargo handling. According to company’s financial statements from previous year, the company is leasing the plot, most probably to Moscow city government originating 84% of revenues in non-residential estate renting which represent 87% of profits, meaning that the main business is no longer machinery but real estate. This performance repeats itself year after year.

Currently, residents pay for 77 percent of the total cost of communal living services in Moscow, while the city covers the rest. At the expense of city budget, Muscovites consume more energy emitting on average more 30% carbon dioxide than average European. (WSWS, 2011)

“ . . . RE D UC E E X I STI N G TAXES ON E M PLOYM E N T, PROF I TS A N D PROPE RTY A N D THE URG E N CY TO STRE A M L I NE TH E A D M I N I STRATI VE PROC E D URES. . .”

Land, Ltd.

T HE T H I RD SECTOR The morphology of Moscow prevents the typical or expected process of land division and privatization. Many areas are thus abandoned both by the public sector, usually because it does not have enough resources to intervene, and by the private sector, because it is not profitable for developers or companies to invest in those areas. As a result, there is enormous potential for a Third Sector in Moscow: somewhere between public and private, this sector could provide a way for civic society to utilize the unclaimed land as a catalyst for a massive and widespread regeneration of Moscow’s public realm. A possible model for this could build on certain characteristics of the open source movement in order to generate a spontaneous and local set of proposals for the use of land in certain districts of Moscow. This research will first outline the background and evidenciary analysis of the lands which could be claimed by the Third Sector of Moscow. Focusing on few aspects of the state of Moscow (from the highly centralized planning practices to the rise of activism) and on general issues (such as network theories and open source movements) will suggest how the reprogramming could be conducted. A design proposal for a single square kilometer identified will show a possible scenario for the unclaimed lands, in order to understand and quantify the potential behind those areas. The unclaimed lands could become the ideal locations to implement a center within the districts that can serve as the manifestation of the regeneration of public space, while at the same time facilitating local design practices.

25%

50%

Until the collapse of the Soviet Union, Moscow grew according to an extensive top-down planning practice, possible due to the presence of an authoritarian system and to the availability of a vast amount of publicly-owned land. The collapse of the Soviet Union and the consequent opening to capitalism and privatization introduced separation and fragmentation, while a vast amount of responsibilities started to be transferred to a system that could never be equally as totalizing as the previous one. Many believe that in the new scenario the most beneficial segments of the former system were claimed by the private sector, while those elements seen as a burden were left behind in the hands of a public sector (which was increasingly in decline…) The growth of the Megacity usually coincides with a public sector in retreat; an escalation of responsibilities and tasks claimed by companies or developers who rarely face a public sector that is able to provide a credible kind of

counterweight: instead of a system of checks and balances, ever growing companies and organizations “kindly” offer to satiate the needs of ever-growing cities, and are able to do so with fewer and fewer barriers. In Moscow the unbalance between the two sectors is brought to the extreme, since the public sector is still de facto responsible for all residual areas and goods that are not profitable from a business point of view. While it is generally understood that the transition from a socialist to a market economy was completed at the beginning of this century in Russia, it is clear that in the land and the housing sectors this process is still ongoing. The municipality thus control a vast amount of small/medium size plots of lands in a state of abandonment, right in those residential areas that suffer from the lack of public spaces and services. The lack of investments (both public and private) is the result of the lack of ideas for these areas. The residents are not fully able to visualize or suggest a possible usage for these areas, and their relationship with the municipal institutions manifests through a series of complaints rather than the exchange of constructive ideas. This results in a challenged system which suffers further from a lack of imagination. In this context, designers, architects, planners and activists should intervene, and create new perspectives on these areas, in order to give to the residents and to the municipality new projects capable of starting a constructive dialogue. In the case of a vast availability of ideas and projects, residents could be involved in their improvement and modification, in an iterative process with designers and amongst themselves. Once there exists a critical mass of feasible projects agreed upon with the resident population, the municipality will be more inclined to take care and invest in areas where it Percentage of public effectively has ownership and responsibility. and private land.

PRIVATE LEASED PUBLIC-CLOSED LAND

75%

50%

75% 25%

SOVIET UNION

MOSCOW 2011

WESTERN EUROPE

OPEN PUBLIC LAND

The third sector

UNCLAIMED LAND IN MOSCOW

Council allowed tenants to purchase their units by paying the houseâ&#x20AC;&#x2122;s value4. These first attempts brought very unsuccessful results, and between the 1990 and the 1991 a new discussion began at the Federal level. Four main options were discussed: (a) free transfer to resident, while floor space in excess of fixed quotas would be sold at low prices, (b) buying out, in which residents must pay the apartmentâ&#x20AC;&#x2122;s value with minimal discount, (c) socially just transfer, in which an amount of free space was fixed and the square meters in excess sold at high or prohibitive prices and (d) compensatory justice, in which each family would receive a voucher for a certain number of square meters to be freely traded on the market5. In July 1991 the housing privatization law passed, outlining the details of the compensatory justice model6. But, some local municipalities (and especially Moscow) had the right to choose alternative options. Moscow chose the most generous option in order to maximize the number of privatized dwellings, opting for privatization free-of-charge for each tenant: after paying a fee of 320 rubles, each tenant could receive the title to their flat for free. The process began very slowly in the first couple of years, with only a few requests. However, Moscow privatization at the end turned out to be very efficient, partially due to the advertising campaign in the press, as well as the speedy implementation procedures (the average processing time for an application was two weeks7). In spite of this, today, even though free privatization is still possible, 25% of the total housing stock has not yet been privatized8. The rights of tenants are so strong and well-established in Russia, that a quarter of the residents prefer not to own a house in order

There is drastically more publicly-owned land in Moscow than in other postSoviet or European cities. The city is nowadays split in two halves: 50% of the land has been privatized, leased, or is simply closed to the public, while the other 50% is fully accessible to the public and publicly owned1. This percentage shows a dimension of the public realm right in between two opposite models: the Soviet one, where 75% of the area of Moscow was public and fully accessible, and the western European one, where private ownership has historically more solid roots and cities have an average of 25% public land (including squares, streets, sidewalks, parks2). Moscow also has 25% of its land devoted to infrastructures, squares and parks, which reflects another 25% of publicly-owned land has a totally different function compared to the composition of public land in many Western cities These areas are generally the green areas within residential districts, the yards, and all those parts that in microrayons are certain open and permeable to the public but do not fully have the characteristics of a proper public space. The aggregate size of these areas has to be stressed and highlighted. It is an area bigger than the municipality of Milan, or than the Garda lake, or three times the amount of tulip-growing agricultural land in the Netherlands. We can argue that there is a lot of hidden potential in those areas, a potential that for several reasons has not yet been realized. One of the reasons is that most of the time, the land plots have highly fragmented geometries, and therefore are practically often difficult to plan. However, the issue of these lands is also related to a wider context of the transferal of responsibilities to the public sphere: once fully in the hands of the central government, these lands are now controlled by decentralized entities like local authorities and ultimately to private figures. We can make a parallel between these lands and two other elements that have been privatized (partially and with much effort) in the last two decades: the residences and the common areas within residential buildings. The housing field was the first testing ground for privatization in Russia. At the end of the 1980s, the government realized that a large percentage of the housing stock was going to need massive repairs in the coming years, and there were insufficient resources for the projected expense. Dwellings switched from being a central human right in the Soviet system, to a state burden that could not be afforded anymore. For this reason, the discussion on privatization options began in 19873. In March 1988, a resolution from the Council of Ministers granted the right of private ownership to members of housing cooperatives, while at the end of the same year another resolution of the

Land division in Moscow. Source: Shoshin, 2011.

PRIVATE/LEASED/PUBLIC-CLOSED LAND (506 KM2)

50% 25% 25% MOSCOW LAND

EXCEEDING PUBLIC OWNED LAND (300 KM2) 90 km2 120 km2 90 km2

green zones in Microrayons yards non-yard residential territories

AVERAGE WESTERN PUBLIC OPEN LAND (285 KM2) 89 km2 86 km2 110 km2

streets (including sidewalks, roadsides, transportation hubs) territories with public function (exhibitions, campuses, market places, etc.) green public space (parks, gardens, plazas, squares, boulevards, etc.)

convinced of the correctness of the privatization process in the early 1990s, so he obtained the right to stop this process within Moscow’s administrative boundaries11. But, this situation is also somehow related to the condition of Moscow as Megacity. Moscow is, in fact, the city that has by far the biggest amount of inhabitants compared with the other cities of the post-Soviet bloc. In Moscow the process of urbanization was so quick and massive that the current institutions are not capable of dealing with such extant built environment or of proposing a coherent methodology to reconfigure the structure of the city.

There is no proper institutional structure for the flat owners and there is a lack of information sources for them in particular in multi-unit buildings. In most cases, they do not have the opportunities and capacity to take decisions on their property...Although individual flats are privatized, the common areas, structures and infrastructure of buildings are not formally privatized. Home ownership is understood to cover only the dwelling... nobody clearly owns the partly privatized apartment blocks and nobody is clearly responsible for them9.

The municipality has the formal ownership and responsibility for the areas that in Moscow are not parceled, but in practice it has insufficient financial resources to deal with such an amount of space. Furthermore, a clear vision and will to reconfigure them is lacking. Again due to their lack of consolidation and often unclear borders, very few private developers found these areas profitable to invest in. This ultimately has resulted in their increasing degradation, left in a state of semi-abandon, covered carelessly with wild greenery in order not to maintain them, no-one using them for any purpose. The image below shows Troparevo-Nikulino, an administrative district chosen as a case study. In red are highlighted the above mentioned areas: publicly owned, but without adequate investments from the administration. The dimension and the diffusion of these areas, combined with the lack of intervention from the private and the public sector, lead to a general underdevelopment of the district. The lack of urban quality is evident and diffuse, the overgrown greenery demonstrates an obvious lack of attention to the ‘public space’. A more detailed analysis on a single square kilometer of this land has been conducted, in order to verify at micro-scale the percentage of

So the formal responsibility of the building was municipal, and the owners did not have incentives to take the municipality’s place. With the passing of the 2005 Housing Code, however, the households became de facto collective owners of the common areas. Three different methods of maintenance by owners were suggested by the law: (1) direct management, without any form of association, (2) hiring a manager to administer the housing complex or (3) creating a homeowners’ association called тсж (товарищество собственников жилья)10. Finally, this Code not only implied, but actively encouraged the direct involvement of households in their immediate surroundings. With this brief overview, we see how the transferal of a public good was difficult even if given for free (in the case of dwellings) and became effective only through a specific law (in the case of public areas in residential complexes). The unclaimed lands described above represent the next scale for the privatization process. First the dwellings, then the common areas in the multiunit buildings, and finally the common areas within the neighborhood. Looking at the cadastral maps we recognize a consistent pattern: in the last two decades, parcels have been delineated without general coordination. A defined amount of land has been assigned to some of the buildings, without care taken in the integration of these plots with the adjacent ones. Instead, in order to reduce conflicts, the definition of the land should have been done at once and at the district scale. The result is a series of scattered islands with clear boundaries, floating in a highly fragmented public realm. The cadastral surveys are conducted very slowly, and many areas do not have clear borders or definition. This situation increases the degree of property’s uncertainty, and consequently decreases the responsibility and care of the residents. At the same time, the complexity of the executive and bureaucratic structure does not allow a clear understanding of which actions citizens have to undertake in order to change, update or manage the land more productively. However, it would be too simplistic to reduce the problem to the negligence of the survey process. The fact is, in many microrayons it is very difficult to define what is public and what is private. There are some areas with a clear typology of houses, such as a yard closed by a series of buildings: in these cases, it is easy to determine the ownership of that land. But in many other cases, where free standing building slabs are located in an open space common all residents and visitors, it is almost impossible to define what land could belong to one building rather that to another. In a way, the morphology of the city’s urban substance is resilient to the land fragmentation and privatization, generating abandoned lands and often tracts of effectively “no-man’s land” between parcels.

not to have all the burdens and responsibilities related to property taxes and maintenance. There was a paradox created by the privatization of the 1990s: there was the possibility to privatize a single residence, but there was no way to privatize the land under the building. According to the Land Code, the land of the condominium could be owned by the homeowners, but there were no specifications about the implementation of this mechanism. Moreover, there was a considerable share of units still belonging to the municipality. The common areas’ maintenance has to be done by the municipality, and there are limited funds for that. Homeowners, on the other side, were not willing to pay for something that did not belong to them, so they ended up living in degraded buildings (maybe with a fully renewed interior!). A brief report of the United Nations, written in 2004 (more than a decade after the collapse of the Soviet Union) states:

top: Yekaterinburg cadastral map. bottom: Moscow cadastral map. source:Rosreestr. State registration, cadastre and cartography.

Other post-Soviet cities have undergone a more complete and efficient redistribution of land in parcels. Examples of this can be found in former Soviet countries, including Riga in Latvia, as well as in the Russian Federation, for example, in Yekaterinburg. There were some specific factors that influenced Moscow’s condition -- above all the decision taken by Luzhkov to delay the privatization of land. He was not

The third sector

< Plan of the Raion Troparevo-Nikulino. The yellow square represent the area selected as case study.

providing general education are at 89% of the required quantity, 50% of the pre-school institutions that are needed actually exist, and only 22% of the local cultural institutions and 13% of the covered sports facilities are built, while around 90% of the required consumer market and services facilities are available to residents13. Even these amenities only cover the very basic provision for a resident population, not taking into consideration activities such leisure. The result of this â&#x20AC;&#x201C; citizens feeling as though services are under-provided and likely over-used â&#x20AC;&#x201C; is clearly visible in the centripetal force that attracts daily millions of citizens to the center of Moscow. We witness a paradox that has to be overcome: on the one hand there is a vast amount of space and land that is not properly used, while on the other hand there is a shortage of many services for the residents of this land. From this perspective the re-programming of those areas is not just desirable, it is necessary. It is the key factor for the improvement of residential districts.

land that is effectively used or left abandoned. The chosen area is located in the northern part of Troparevo-Nikulino and it mainly consists of residential buildings developed through different decades, from housing developments of the 1970s to the latest residential towers built at the beginning of the century. A recently renovated linear park crosses the heart of the area, dividing two parts with very different layouts, but quite similar in terms of architecture and service provision. Starting from a rough and out-of-date map of the area, I updated the drawing of the infrastructure, buildings, and public spaces with information coming from different available cartography sources12 and regular site visits. Even if not highly detailed, the map has a quite satisfactory approximation that allowed me to evaluate and quantify the different usages of the area. It turned out that 39% of the territory is gated, occupied by buildings or belonging to some person or company; 28% is devoted to infrastructure, sidewalks, parking lots, public functions such schools or sport centers, proper parks, and public spaces; while 33% is open publicly owned land composed of some residential yards, a few playgrounds, but mostly land that is underdeveloped or unused. This rough estimation shows percentages quite similar to the data available for the whole city, and it confirms how the districts that compose Moscow are quite homogenous in terms of their built environments. As a matter of fact, most of the residential districts outside the Garden Ring lack a number of public services, as well as sufficient jobs to employ local residents. A study conducted in 2006 highlights several statistics: schools

Land division in one square kilometre selected as case study.

PRIVATE/LEASED/PUBLIC-CLOSED LAND

39% 33% 28% case study

EXCEEDING PUBLIC OWNED LAND 20% 6% 1% 6%

unused or underdeveloped yards playgrounds non-yard residential territories

AVERAGE WESTERN PUBLIC OPEN LAND 11 % 7% 10 % 2%

LOCAL ACT I V I SM Local groups of activists in most of the cases were born from housing issues. Usually, such associations start with the smallest problems of their living environment such as cleaning dirty, dark, and unsafe staircases and entrance halls, or repairing a leaking roof. Later, they become involved in real social problems of the wider community. Sometimes, a staircase group gives rise to a housing committee, a housing committee joins its efforts with other housing committees, and collectively, they merge to form a neighborhood committee20. As described above, following the collapse of the Soviet Union, housing issues became very central in residents’ lives, and today it is still by far the focal issue for contemporary civic activism. The character of this participation comes directly from the necessity to overcome some common problems, acting in place of the former political structure, as stressed by Vihavainen in 2009, “the volume of civic activity shows that there are clear problems in housing and that people are willing to take action to improve the situation21”. In order to have the legal status to act as a group, homeowners can constitute a ‘Homeowners’ association’, called TSZh (товарищество собственников жилья - тсж). In the last years Moscow saw a booming number of these associations, following the Housing Code of the 2005 in which the government obliged homeowners to take direct responsibility for the common areas in their buildings. The TSZh was one of the proposed forms through which homeowners could carry out this obligation. A homeowners’ association is a spontaneous, non-profit organization, in which any household can participate through direct involvement and common meetings to take shared decisions. It is legally registered and it has the status of legal entity. The main activity and responsibility of the homeowners’ association is the organization and maintenance of buildings. This kind of associations are not new in Russia: from the 1920’s there was an apartment supervisor (kvartupolnomochennyi) in communal apartments who had the duty to report needs, complaints and suspicious behaviours to the Housing Committee (domkom)22. Housing Cooperatives were another example of success in residential self-organization. However, the contemporary Russian TSZh has a particularly distinctive characteristic when compared to similar entities in other countries: participation is not mandatory. “Russia is therefore the only country in the world in which membership of a homeowners’ association is voluntary23”. This differs, for example, from the majority of cases where it is not mandatory to constitute an organization, but from the moment of its creation everyone should take part at the meetings and decisions. We can somehow judge this aspect as positive: being a voluntary association increases its social character. Moreover TSZh are located where people live so that geographically they are the closest organization to citizens’ everyday lives. The TSZh has a simple structure: more than 50% of the households must participate in order to actually form a TSZh. There is a board of elected members that takes care of the administration and the everyday management

decisions, like deciding which company to hire (in many cases corruption, also plays a role in this…) The elected chairperson cannot stay in this position for more than two years. Although there tends to be low participation of homeowners in these organizations, at the same time, social involvement in housing is very popular in Russia, and the level of participation is therefore higher than in other fields or activist activities. “In Moscow the number of housing committees has increased fivefold in only a few years, reaching 5350 in October 200524”. Some critiques can be made of the way these organizations are organized: first of all they refer only to households, excluding potentially some residents. Moreover, there are many recorded cases of ‘marionette’ TSZh, initiated by the government and often infiltrated by certain representatives with the aim of obtaining funds and power to decide how to invest the residents’ money in, for example, a management company related to the municipality25. While the system is not perfect, the associations do seem to encourage certain behavior and practices that need to be fully developed by Moscow’s residents anyway: they “…encourage people to be effective actors in the market. Homeowners’ associations are the embodiment of this task, the decision-making channel for residents, a sort of experiment in democracy and an early step towards civic activity on a grassroots level26”. “Homeowners’ associations may therefore serve as the first step for civic activity, as a ‘school of democracy’27”. In the raion Troparevo-Nikulino, different TSZh meet regularly every month to discuss topics of general interest, not only issues related to their shared responsibility for property management or repairs, but also to talk about the desired developments within the raion, such as more children’s hospitals, the reconstruction of the park, and so on. These organizations represents thousands of people in the districts, and it is reasonable to assume that as they become more prominent or unified, the local political power will take their needs more and more into consideration. The relationship with local administrations is a crucial component for the success of local groups, since the uprava is the administrative level to which they have to refer in order to promote their goals. < Rise of interest in activism. Queries in Yandex search engine. Source: Yandex pulse.

The third sector

Currently, the vertical administrative structure of Moscow does not allow a real decentralization of power, and local institutions play more a role of façade of the central government rather than functioning as promoters of local interests. As described above, for the planning structure of Moscow, the officials that are responsible for the uprava and okrug do not have to report to citizens, but to the upper authority. This is a result of the fact that the officials themselves are placed in their position from the top, rather than elected from the bottom. Citizens nowadays vote only for the Russian President (the farthest and most inaccessible political figure from their everyday life) and deputies for the municipality. Even if deputies have voices and motivations, these deputies have very limited power, relating mostly to sport and youth issues. All the decisions taken at the local level have to be approved by the head of the uprava, appointed by the okrug. Within this system officials do not have many incentives to satisfy people’s requests, and the effectiveness in responding to local needs is strongly depending on the attitude of the person in charge of the uprava. These problematic relations increase the distrust of residents and groups of residents towards these institutions, and as a result, the relationship is, most of the time, only reactive (or sometimes silent) toward complaints, rather than one of active participation. Local groups end up unified mainly by what Aleksey Levinson described as negative solidarity, the protection of their own interest against an higher power28. This imposition of power is reflected at the micro-scale, even within local movements. One characteristic of most of the self-organized movements is a strong dependency on the figure of the leader. Ironically, in some ways, movements recreate the same dynamics of power-dependency of which they are victims; as suggested by Clement, some leaders are afraid of talented new entry in the group who can take their leadership29. Therefore, in most of the cases the success of the groups depends on the capabilities of their leader. If he or she is capable of attracting enough attention from the media, and/or creating the right network of trusted people within the raion and within the local institution, the movement will be more likely to reach its goals. Otherwise, the group turns out to be ineffective, often because it will be caught between a local authority that does not offer enough support and groups of criminals that try to promote their interests. In the context of this research, I received an email from another Strelka student that was helping contact with the head of a particular TSZh:

Evidence above suggests that participation in Moscow requires another level of commitment (and often complicitness) than the commitment required

Comparing the activities and effectiveness of local groups with those of city-scale activists, some differences have to be highlighted. Local groups are generally moved by necessities rather than interests, and people involved are not necessarily prepared on the topic. They are mainly amateur, and they spend a lot of time looking for information that is not always accessible. The relationship with local authorities is necessary but not designed to be favorable for both parties and turns out to be extremely influenced by the personality of the specific figure of the head of the administration or of the group leader. The relationship within the groups are mainly vis-à-vis, due to geographical proximity and considering the fact that online social media are not accessible to most of the retirees who constitute a consistent percentage of the participants. In 2008 an ambitious project was launched by the team Mustview.ru. With their effort, an independent blog was created for every district in Moscow, in order to give to residents an alternative place for discussion and gathering. However, in Troparevo-Nikulino it seems that this type of media does not function. In more or less 5 years only 54 posts were submitted, and mainly with contents related to: (1) meeting other people, (2) proposing activities (volleyball, etc.), (3) posting basic information for those who just moved in (passport, baths, fitness, etc.), (4) making suggestions for basic needs (broken pc, etc.), (5) sharing some news or asking about them (gunfights, etc.), (6) making suggestion for housing issues (how to install new staircases, how to deal with water problems, etc.), (7) giving info about ongoing constructions in the area and (8) airing very general complaints31.

Just as I was about to contact him, I learned that he was beaten to half death by criminal businessmen his TSZh was fighting against. These people wanted to privatize the attic in the house where they live. From what I know, they may have faked TSZh meeting protocols, as if the majority of inhabitants agreed to that. We’re talking about a beautiful old house very close to Kremlin, in the old part of the city. Misha Shulman is the head of TSZh. And now he’s in life support. It happened yesterday. There’s a lot in the Russian web on it, not much in English30.

in Western cities such as Milan. It is not only enlarging consensus and taking decisions based on this larger group of people’s preferences and concerns in order to jointly address certain problems that are considered relevant. Instead, it means to put yourself in a wild territory, where rules and procedures lack to guaranteeing your physical protection, even before the inclusion of your efforts.

Moscow administrative structure.

OPEN SOURCE AND THE CITY Open source communities represent the latest online evolution of groups where people make and share information or products. These communities follows principles that ground them both in the practical and in the ideological sphere. Before starting the analysis it is necessary to give space to the endless discussion of the concepts of open source and free software. The first one is concentrated on the process that create the software, while the second on the ethical values of freedom of the users. One of the main founders and promoters of the free software movement, Richard Stallman, better describes the difference between the two terms. “Nearly all open source software is free software. The two terms describe almost the same category of software, but they stand for views based on fundamentally different values. Open source is a development methodology; free software is a social movement. For the free software movement, free software is an ethical imperative, because only free software respects the users’ freedom. By contrast, the philosophy of open source considers issues in terms of how to make software “better”—in a practical sense only. It says that nonfree software is an inferior solution to the practical problem at hand. For the free software movement, however, non-free software is a social problem, and the solution is to stop using it and move to free software.” (Stallman). In this framework, the term free hardware would be more appropriate for my research, but I prefer to use open source hardware in order to avoid all the confusion and misunderstanding related to the term free.

The Open Source movement, in order to find a practical and legal way to operate, had to set up an innovative license. Here the ten points of the license are listed: “(1) Free Redistribution - the license shall not restrict any party from selling or giving away the software, (2) Source Code - the program must include source code, (3) Derived Works - the license must allow modifications and derived works, and must allow them to be distributed under the same terms as the license of the original software, (4) Integrity of The Author’s Source Code - the license may require derived works to carry a different name or version number from the original software, (5) No Discrimination Against Persons or Groups, (6) No Discrimination Against Fields of Endeavor, (7) Distribution of License - the rights attached to the program must apply to all to whom the program is redistributed, (8) License Must Not Be Specific to a Product - the rights attached to the program must not depend on the program’s being part of a particular software distribution, (9) License Must Not Restrict Other Software - the license must not place restrictions on other software that is distributed along with the licensed software and (10) License Must Be Technology-Neutral - no provision of the license may be predicated on any individual technology or style of interface.32” The license of the open source movement is mainly based on a previous one, created by the Free Software Foundation: the GNU General Public License (GPL). More or less it contains the same articles, but with a stronger accent on the ethical reasons for this kind of license. It is at the same time a legal document and a manifesto, as easily understandable in the license’s introduction: “The licenses for most software and other practical works are designed to take away your freedom to share and change the works. By contrast, the GNU General Public License is intended to guarantee your freedom to share and change all versions of a program--to make sure it remains free software for all its users. We, the Free Software Foundation, use the GNU General Public License for most of our software; it applies also to any other work released this way by its authors. You can apply it to your programs, too.33” These rules and practices may seem far from the physical reality of the built environment. However, their nature is very close to the way groups of urban activists face urban transformations. If we focus particularly on those groups that operate and promote DIY interventions the similarities are very evident. The action itself is quite simple and easy to reproduce, usually through the

Linux represents one (if not the) most successful product of the collaboration of part-time

14000000 12000000

Users

10000000 8000000 6000000 4000000 Lines of code

2000000 0

volunteers scattered around the globe. Its success has been brilliantly described by one of the first contributors of the GNU project, Eric Raymond, in his book “The cathedral and the bazaar”. It is the comparison of two distinct models: the cathedral, a top-down centralized model that represents the interests of some groups of power, and the bazaar, a more open environment where interaction is more horizontal. Apart from the capabilities of its developers, Linux’s strength lays in the methodology by which it keeps expanding, a methodology that does not fear mistakes and errors. “Linus Torvalds’s style of development—release early and often, delegate everything you can, be open to the point of promiscuity—came as a surprise. [..] the Linux community seemed to resemble a great babbling bazaar of differing agendas and approaches [..] out of which a coherent and stable system could seemingly emerge only by a succession of miracles. The fact that this bazaar style seemed to work, and work well, came as a distinct shock34”.

Open source is a way to collaborate (normally on software) giving free access to all to information about the product. It works because people “sacrifice” their intellectual rights in order to release a product that everyone can use and improve. It is a collaborative movement the results of which are highly efficient (e.g. Linux menaces giants like Microsoft). It helps to generate very impressive results in a very short period of time, because the efforts of the users-developers are based on the work that someone else did before and gave to the community freely.

reuse of recycled materials. These groups encourage and promote the reproduction of the same projects in other context; one example is “Park(ing) Day”, born in San Francisco, replicated in New York and then spread worldwide through Europe to Moscow: the same action, invented, made better, and then implemented in a variety of different context.

The rise of Linux. Number of users and lines of code between 1900 and 1999. Source: Forbes Magazine.

Obviously, in the Open Source movement, cooperation is the main means in which progress and innovation happen; Linus Torvalds, the Linux kernel’s programmer, set up a very powerful network of co-operators. “Users are wonderful things to have, [..] properly cultivated, they can become co-developers. [..] Given a bit of encouragement, your users will diagnose problems, suggest fixes, and help improve the code far more quickly than you could unaided. [..] The power of this effect is easy to underestimate. In fact, pretty well all of us in the open-source world drastically underestimated how well it would scale up with number of users and against system complexity, until Linus Torvalds showed us differently. In fact, I think Linus’s cleverest and most consequential hack was not the construction of the Linux kernel itself, but rather his invention

The third sector

of the Linux development model35”. And more specifically: “In those early times (around 1991) it wasn’t unknown for him to release a new kernel more than once a day! Because he cultivated his base of co-developers and leveraged the Internet for collaboration harder than anyone else, this worked36”. The system created by Torvalds was demonstrated to be extremely efficient in enlarging the number of people able to find and fix problem. It is a sort of daily challenge for the one who feels involved. And this methodology is obviously very different from the cathedral one, where the product can go on the market only when it has no (or very few) bugs. It takes months (or year) to come out with a stable product, and users that pay have obviously higher expectations from that product. Let us for a second make a parallel to similar problems in the urban environment. Let’s think about the unclaimed land. That could be that segment of the market that no one wants. A mass of volunteers can actually cooperate to design and realize many different solutions for Moscow public spaces, and share these solutions with others. The solutions can be taken or modified by other people. Very often it is not necessary (as usually happens in normal planning) to design something for months and then build it. Now we just need to identify where the initial kernel (or rules, or conditions) is into which these urban hackers could actually plug their projects. Moving in an open source environment means to break the division between users (citizens) and programmers (planners): “...mismatch between the tester’s and the developer’s mental models of the program; the tester, on the outside looking in, and the developer on the inside looking out. In closedsource development they’re both stuck in these roles, and tend to talk past each other and find each other deeply frustrating. Open source development breaks this bind, making it far easier for tester and developer to develop a shared representation grounded in the actual source code and to communicate effectively about it37”. In other words, the open platform accessible to everyone allows for a common ground for discussion. In the same way, a permanently ongoing urban plan (complete and available to the most detailed element) would be the proper starting point for a constructive discussion between citizens, government and investors. Raymond concludes his book by describing the necessary preconditions to start a “bazaar–style” model of participation. Particularly, he states that is almost impossible to start from scratch with this model: “Your nascent developer community needs to have something runnable and testable to play with. When you start community-building, what you need to be able to present is a plausible promise. Your program does not have to work particularly well. It can be crude, buggy, incomplete, and poorly documented. What it must not fail to do is (a) run, and (b) convince potential co-developers that it can be evolved into something really neat in the foreseeable future38”. What motivate the hackers? What motivates people involved in making Linux better? This is a very crucial question. There are two main reasons: the necessity to develop something that does not exist, and the satisfaction of the ego of the hacker by recognition among other hackers. How can this be transported to the urban environment? The need for alternative solutions for the unclaimed land is evident, the issues is now how to satisfy the ego of the participants. “One of the best-known folk theorems of software engineering is that 60% to 75% of conventional software projects either are never completed or are rejected by their intended users39”. What about the amount of unrealized projects of architects, designers and activists? All the design proposals that are discarded along the design process? What about the hundreds and thousands of project that did not win a competition? Where does their potential go? Can it be somehow stored and entrapped in a more ambitious project? As the case of Wikipedia and Linux show, users are willing to contribute to a project if they clearly understand and realize the potential of the very central ideas, no matter how visionary it sounds, like making the largest encyclopedia in the world or creating a new operating system able to compete with Windows. The intention of reprogramming the vast amount of underdeveloped land in Moscow could represent for the designer community a challenge equally visionary and feasible. Projects of so-called “Open Architecture” are currently being tested in a few online communities, OpenSimSim above all. However, these experiments cannot attract a critical amount of users since they are more focused on the process itself rather than the application of the proposed projects. It is no

wonder that the highest amount of participants in the OpenSimSim project was recorded when there was a specific project that collected and developed ideas in response to the Japanese tragedy in 2011. Moscow has therefore the opportunity to become again a center of experimentation and avantgardism if it will be able to attract the attention and the efforts of architects, planners and designers as a response to the issue of unclaimed land. 1992

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COLLA BORAT I V E R E PRO G RA M M I N G A N D TH E ROL E O F D ES I G N E R S The issue of the unclaimed land in Moscow has both spatial and functional qualities. The interaction of residents and the network of urban activists is crucial to address properly the range of interventions, but a model for this land requires the inclusion of architecture and design as the means of transformation. A territory of this scale can hardly be managed coherently trough spontaneous interactions. The model that I propose as a pilot project for Moscow sees architects, planners and designers as activators of local processes in which the resident population will contribute with further feedbacks, ideas and improvement. Participation has now gained a positive meaning, but at the same time participation in the micro-urban environment is so complex in that is very difficult to understand all the forces at play in that field. Marcus Miessen proposes an interesting scenario where decisions in the urban environment are not necessarily taken through the involvement of the majority, but where plans are promoted by “an outsider who – instead of trying to set up or sustain common denominators of consensus – enters existing situations or projects by deliberately instigating conflicts as a micro-political form of critical engagement with the environment that one is operating in40”. The author does not describe a specific model, but he argues that “instead of breeding the next generation of facilitators and mediators, we should try to encourage the “disinterested outsider”, the one that is unaware of prerequisites and existing protocols, entering the arena with nothing but creative intellect. [..] Given the increasing fragmentation of identities and the complexities of the contemporary city, we are now facing a situation in which it is crucial to think about a form of commonality that allows conflict as a form of productive engagement: a model of bohemian participation in the sense of a point of entry for outsiders who access existing debates and discourses, untroubled by disapproval41”. The role of architects in Moscow, in relation to the unclaimed land, should escape the traditional dynamics of the profession in order to contribute new

proposals and solutions for those lands. An open and volunteer contribution to the project would create a wide set of ready-made rough solutions for certain areas. The image on the facing page shows a hypothetical scenario of reprogramming the unclaimed land, filled and transformed by a mix of heterogeneous proposals made by professionals or other people interested in the design of those areas. It would constitute the unofficial development plan for the district and it will be always discussed, updated and transformed through the activity of the center. Moscow residential districts are often similar in terms of built environment and its problems; some projects proposed for some areas could be easily re-adapted and modified by the residents in other areas. The proposed projects will be generic solutions capable of being changed and adapted easily since the drawings and guidelines will be open and shared. Without a set of proposals for the reuse of the areas, the interaction between citizens and the authorities will rarely reach a productive discussion. On the contrary, if a set of projects is already in place, residents would visualize different solutions to shape their environment, and discuss them with the designers, to change and improve them, and with the municipality, to find a way to realize them. It is a wide reprogramming effort that counts on the infinite potentiality of the unbuilt. The outcome of the design process that I proposed here is purely speculative, but it helps to better understand and quantify what is behind the unclaimed lands. The yellow proposals suggest realistic interventions, and show how it is possible to reuse those lands in order to create new public spaces, functions of collective interests that are nowadays missing in the area, but also new dwellings and offices. If we take this square kilometer as representative of most of the areas outside the Garden Ring, the aggregate potential of this proposal increase significantly. Reproducing exactly this kind of interventions and functional mix on a large scale would create low rise housing for 500,000 people and offices and workshops where 800,000 people could find an occupation close to their houses, decreasing therefore trafficrelated problems. 14,000 hectares of agricultural land, more than half of the city center, will be available for urban farming and produce profit that could be reinvested locally. Moreover, it will be possible to build a retail area 130 times the size of GUM, and new 390 hectares of market’s area, 1.7 times bigger the Cherkizovsky Market, the biggest market in Russia, shut down in 2009 with an income of 300 million dollars per year. The city will have new libraries for an area 92 times bigger the Lenin’s Library and new exhibition centers 27 times the size of the Pushkin museum. Finally, the number of bars, restaurants, post offices, banks, theaters, cinemas and clubs could almost double in Moscow, fulfilling more adequately residents’ needs. The estimation is rough, but it identifies a clear scenario that has to be taken into consideration by the authorities and by those in charge to shape the growth of Moscow.

< Possible reuse of the underdeveloped lands in the case study area.

The third sector

CENTER FO R DI STR I CT D EV E LO PM E N T In order to open the process to the majority of residents the interactions between citizens, designers and authorities should take place in a physical space in the residential areas. In this space, a limited number of people will contribute with their work in order to keep this process continuous in time, rather than a one-shot design proposal. This space will work as a center for the development of the district.

I propose to test the implementation of this center in one of the raion of Moscow. Through this test it will be possible to understand strength and weakness of the model, before implementing it in other raions. Ideally each raion should implement this kind of center to create local alternatives to the planning practices of Moscow, and the delimitation at the raion scale seems necessary and fundamental since the authorities to interact with are already in place in Moscowâ&#x20AC;&#x2122;s administrative structure. Residents will approach this place as the center where to find information and consultancy on urban, architecture and design issues, while the center itself will be therefore the place where ideas are created, discussed, modified and implemented locally.

The description of the main activities of the center follows. (1) Mapping of available land. There is no official map or understanding of the quantity of the publicly owned land that is available for redesign. Or at least there are no studies that systematically show it. This is the first action that has to be undertaken and will require at least one topographer and an architect. In St. Petersburg a pilot project succeeded in the mapping of green spaces in the yards by the residents. The result was quite positive and encouraging, since the survey had a decent level of accuracy. (2) District analysis. Architects or planners (including students) will survey the physical condition of the district, producing and making available a variety of set of maps showing functions, spaces, areas, public services, etc. . Professional from social science fields will indeed map the intangible reality of the district, through interviews, questionnaire, surveys and all other methodology they find appropriate to describe the problems and the potential of the place. The outcome will be a series of reports and researches that can be transcribed and made accessible together with the maps. (3) Promoting the creation of proposals. Based on the analysis conducted on the district and the cartography of unclaimed land, the center will constantly search for architects, planners, designers, activists and residents, to ask them to come forward with proposals for the areas. This can be done in a variety of ways, from an open competition, to social networks, to direct contacts, and the proposals will be collected and archived in what will be the open atlas of Moscow, in the sense that will show ideas for that district, but the solutions can be taken also from other centers or people in Moscow. The projects will have an open source license, and therefore it will be possible to build them directly, or to contribute with further modifications and improvements. (4) In order to transfer the real needs of the residents into the proposals, a variety of meetings will be held with the resident population where it will be possible to discuss the solutions, select the most preferred and spend time together with designer to make the necessary improvements. It will serve also as a moment of education of the residents to urban theme, being in tight cooperation with a professional of that field. Moreover the center will be open most of the time, giving the opportunity to residents to contribute and interact

with their proposals at any time, without waiting for the official or scheduled meeting, or to come to the center looking for counseling on urban or design issues. It will be therefore possible to create a local entity to which to refer in order to fill the knowledge gap of the resident population or other groups of people interested in the topics. (5) Once there is a critical mass of projects and residents participating in their development, other stakeholders like the municipality and possible developers will be slowly included in the meetings to become an active part of the discussion. The outcome of the discussions is unknown, but it will create an open and purposeful discussion within the district that likely will lead to the improvement of the public realm through the provision of ready-designed solutions for problems that the municipality has to address in the coming years. (6) If agreement can be reached between all the parts, the center can take part in the construction process of the projects itself. With a series of workshops, activists and residents can participate together in phases of the construction, acquiring knowledge that will be reused in other parts of Moscow, or in followings projects.

Diagram of functioning of the Center for distric development.

FUNCTIONS mapping of available land problem analisys education meetings & discussions

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project construction

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RESEARCHERS ACTIVISTS LOCAL ADMINISTRATION

OPEN ATLAS OF MOSCOWâ&#x20AC;&#x2122;S PROJECTS

Public hearings were first introduced to Moscow planning practice in 2009 by the new Moscow City planning code of 2008. This novelty might have passed relatively unnoticed if not for the media hype around Foster’s infamous “Orange” project that was to have been built on the site of the Central House of Artists (“CDKh”) — a modernist landmark with a sculpture park around it. The final project for the reconstruction of the space presented for consideration at public hearings was a different one but still suggested demolishing the CDKh building and a series of unwanted changes to the intensely used public space that surrounded it. Public hearings on the Central House of Artists were the second ones of that kind that were ever held in Moscow. On the day of public hearings citizens organized a protest against reconstruction. On the

project’s side was the chief architect of Moscow and the head of Central Administrative District. Contrary to the act that prescribes participation of local residents only, officials allowed participation of many public figures (architects, artists, activists) who supported the preservation of CDKh and its territory. The procedure received wide-media coverage and ever since public hearings remain one of the biggest news-makers in the field of planning and construction in Moscow.

“ P U B L I C” HEA RI NGS

Public hearings are among the biggest news makers in the field of planning and construction in Moscow.

< Second public hearings on city-planning matters ever hold in Moscow concerned CDKh reconstruction project.

From the beginning, some were highly critical of this procedure*, arguing that Public hearings are a completely useless undertaking as they are just adding entropy to the city-planning process without having any tangible outcome as their results are nonbinding. But in fact adopting public hearings were a step-forward for the City-planning Code as it was the first recognition of citizens’ interests and their right to participate in the planning process as any changes in this field are affecting them directly. Besides, very often a so-called “lay expertise” can help to avoid planning failures.

On May 17th, 2012 public hearings were held on the site plan for an administrative building (the Civil Registry Office, which is the traditional place for civic wedding ceremonies) to be located in Mitino (a region in the north-west of Moscow). At public hearings local residents expressed an undivided opinion that authors of the site plan did not take into consideration that there would be a daily stream of cars (many of them limousines) driving to this site. As the proposed location is just by the busy Pyatnitskoe Shosse (a highway), putting an administrative building there will most likely lead to local traffic collapse. The results of the public hearings prompted the District

Land Use and Planning Committee to suspend the adoption of the project and examine the possibility of its relocation. It is questionable whether this is an example of local expertise or of the officials’ ignorance but the moral is clear: without public involvement there would have been an irrational planning decision taken with significant deterioration of traffic conditions as a potential result. < Project for construction of an administrative building in the NorthWest of Moscow and the same site on the Google map showing traffic.

“...IT IS QUESTIONABLE WHETHER THIS IS AN EXAMPLE OF LOCAL EXPERTISE OR OF THE OFFICIALS’ IGNORANCE...”

PUBLIC HEARINGS IN MOSCOW CITY-PLANNING CODE In Soviet city planning since 1930s and first few years of post-Soviet practice public participation was limited and fragmented and mostly concerned preservation matters*. Citizens’ right to deliberative participation in planning was first introduced by the Federal Law of 1995 “On the general principles of city planning in the Russian Federation” (Article 8) and then further developed by the Federal City Planning Code of 2004 and the City Planning Code of 2008 in Moscow (Chapter 12). The latter specifies the procedure of public hearings by extending the list of documents subject to consideration. According to Moscow legislation the procedure of public hearings is supposed to regulate interaction between citizens, authorities and land-holders (developers, owners of capital construction objects)...

...and sometimes the church The construction of temples of modular structures in Moscow is gaining momentum — there is an official provision to erect 200 such temples and 60 land plots have already been allocated*. Although sacred, the construction of each temple requires holding public hearings before adoption of the project. Traditionally local residents unite against a developer in attempt to preserve another bit of public space or green area but the hearings on temple projects can turn into a “holy war” between believers and infidels. To gain support for otherwise unpopular projects developers can built a shopping mall together with a church to facilitate the adoption of the project

Public hearings are a step in project implementation that is held right before the final adoption which means that the project has already passed all the stages from land allocation to design and technical inspection. The circle of participants is limited to local citizens, land and property holders (developers) or their representatives and authorities (municipal and Moscow City Duma deputies). Prior to the public hearings there must be an announcement followed by an exhibition of the project — usually lasting no more than 7 to 10 days. At public hearings every participant has a right to comment on and to contribute suggestions to the discussed project. All comments and suggestions

Participants in public hearings over construction of a modular temple in Zelenograd: supporters and protestants.

contributed by the participants have to be recorded and transcribed. After holding public hearings a report on citizens’ proposals and objections must be issued — it serves as a base for the official conclusion that comes in a form of recommendation issued by the City or District Planning and Construction Committee — a city or district advisory body with authority in the field of land use and construction.

The strength of a local community might influence the way projects are exhibited. Left: a shabby structure with a site plan documentation printed black and white and pinned up to the boards in Mitino Uprava. Right: developers obviously have slightly more respect to the ever-protesting residents of Troparevo-Nikulino — technical documentation is accompanied by maps and visualisations.

DOCUMEN TS S UBJECT TO CO N S I D E RAT I ON AT PUBL I C HEAR I NGS

1. Genplan: General Plan for Development Genplan is “document of strategic development”, comprised of several maps outlining the future of Moscow transportation, residential areas, historical sights, etc. and explanatory texts. “So-called “public” hearing were held in Moscow in summer when most of the citizens are away on holidays. Those Tverskaya residents who accidentally found out information about them came to hearings but the officials could hardly answer any questions”. From the letter to Moscow City Duma Deputy V. Platonov

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Moscow population

Participants in public hearings on Moscow Genplan in 2009 Total: 29 000 Moscow population: 11 000 000 Source: interview with the head of Moscow territorial executive body, 2009ist fuga.

In Soviet city planning since 1930s and first few years of post-Soviet practice public participation was limited and fragmented and mostly concerned preservation matters*. Citizens’ right to deliberative participation in planning was first introduced by the Federal Law of 1995 “On the general principles of city planning in the Russian Federation” (Article 8) and then further developed by the Federal City Planning Code of 2004 and the City Planning Code of 2008 in Moscow (Chapter 12). The latter specifies the procedure of public hearings by extending the list of documents subject to consideration.

Part of Moscow Genplan adopted in 2009

2. Land Use and Development Regulations.

Part of Land Use and Development Regulations subject to public hearings in 2009.

Land Use and Development Regulations were subject to public hearings at the same time as Genplan and in many cases citizens didn’t even know which documents they were deliberating over. This situation was regarded as a violation of Moscow City-planning Code (Article 34, Part 2) as Land Use and Development Rules must be based on existing Genplan so they can’t be subject to public hearings before the adoption of Genplan. New Land Use and Development Rules must be issued by the end of 2012. Moscow City Duma issued a provision on a possibility of a “step-bystep“ adoption of LUDR so they will be processed in parts and subsequently subject to public hearings in corresponding municipal entities.

3. Territorial planning projects on development, reconstruction or reorganization of residential areas, green spaces, territories within historical and cultural preservation zones.

Planning project for the CDKh territory.

Green areas and cultural preservation zones are supposed to be treated differently and there is a certain set of requirements for the projects of reconstruction and reorganisation of these territories. At the same time, it is not a rare case in Moscow that a status of the site can be changed in order to allow the implementation of a certain project. “It is obvious that this project wasn’t made to help the museum. It was made to lobby interests of potential investors. Moscow Government is going to allow them to build a 17(!) story building of unclear purpose”. From a manifesto of “Art Territory Defenders Committee”, February 2009. 4. Territorial planning projects/site plans. A site plan is a set of designs showing a) the boundaries of the planned construction objects and infrastructure; b) the key characteristics of the property such as density and height; c) features of the facilities — social, transportation and technical — required for the territory development ; d) materials for substantiation of the chosen design (Moscow City-Planning Code, Article 39-40). In the absence of Land Use and Development Regulations decisions on a certain site development are taking by the authorities based solely on the Genplan.

Territorial planning project for the site located East of Altufievskoe highway. 5. Land surveying plans.

Land surveying plan for a block in the Central Administrative District .ist fuga.

It used to be a common practice in Moscow (in fact, on almost all the ex-USSR territory) to build residential block housing without setting boundaries to the land plot. At the same time land surveying is a prerequisite for condominium formation. The purpose of the survey is establishing real estate and property rights for those who want to organize themselves into a TSZh (Homeowners Association). According to the Housing Code (Article 36, 37 and 44) residents of the block houses have a right for the allocation of the land that is “attached” to the house to create collective property. The allocation process is complex and requires creating a land surveying plan for the plot subject to allocation and neighbouring territories. In Moscow, budget for land surveying expertise is provided by the City but the waiting period can be up to 8 years. Many citizens who want to organise a TSZh and allocate the attached land plot have to use private surveying agencies and pay for the surveying expertise themselves.

6. Planning projects for territories within residential blocks or microrayons.

Territorial planning project for residential area in Troparevo-Nikulino that suggests building a shopping centre instead of a boulevard — a classic “infill construction” case.

“Infill construction” — a term that does not exist in Land or City-Planning Code but is widely used by media to describe a type of construction that violates the right to comfort environment of those who live in the neighboring buildings. In addition to that, “infill construction” can result in decreasing the price of the surrounding property. At the same time proposals for “infill construction” are often presented by the developers as a necessary improvement for the neighbourhood, e.g. a shopping area within walking distance. The City used to have a special purpose program for the development of the built-up areas (a block or a microrayon) that was designed to protect the living standards of the residents: Resolution No.872 On the Targeted Investment in Moscow (2008-2010)1. Moscow City-planning Code rules prescribes that the parties in interest should be informed about the planned construction but apart from the declarative provisions there is no way to ensure the rights of citizens to obtain this information an express their opinion other than public hearings

7. Permissions for the change of a “conventionally permitted land use” of a land plot or infrastructure object or for deflection from the established construction parameters.

Project on the change of conventionally permitted land use for building a car service centre.

Project on the change of permitted construction parameters..

a) Permitted land use refers to the types of activities or construction legally permitted on a certain land plot. According to the Land Code (Article 7), there are 7 categories of land (zones): agricultural, residential, industrial, forest area, etc. Permitted land use corresponds with the land type as particular or specific corresponds with the general, hence the twain shall always be in accordance. However, an exhaustive list of permitted land use can not be found in Russian legislation. Another discrepancy is that the Land Code doesn’t determine who establishes permitted use of an individual land plot. Apart from the “permitted land use” term there is also “conventionally permitted land use” (Federal City-planning Code, Article 37). Again, there is no clear definition of the latter and how it differs from the “permitted land use”. But it is the change of “conventionally permitted land use” is the one that requires the consideration at public hearings in Moscow. According to the Federal City-planning Code (Article 39), a landholder can apply to the City or District Cityplanning and Land Use Committee to get permission for the change of the “conventionally permitted land use” of the plot. Town-planning and Land Use Committee must organise public hearings and then take a decision based on the result of the public hearings. b) Deflection from permitted construction parameters normally imply building hight or area increase. This type or projects are rarely supported by public which often provokes landholders to violate the law in numerous ways — from bribing attempts to physical violence.

Moscow expansion. The fact that public hearings — as an obligatory step in planning process — can only be held over certain documents (projects) was used as a technical excuse for not consulting with the public upon the expansion of Moscow borders

Territorial planning project for the site located East of Altufievskoe highway.

FLAWS The obligatory character of public hearings and the scope of questions subject to consideration guarantee citizens’ participation in the planning process at all levels — from parking construction to Genplan adoption. But in reality the mechanism of public hearings and its practical implementation is deeply flawed. “Public hearings as an instrument of expressing citizens’ will not work. Officials do not take people’s opinion into account — they just create a visibility”. From an open letter to the governor of Saint-Petersburg. “I don’t know where in Russia the institution of public hearings functions properly” Aleksandr Lozhkin, architect “Why hold public hearing? In order to hear people’s opinions, to use their suggestions to change the initial project... But it just doesn’t work in our country. I won’t go to the next hearings — don’t want to stand in the crowd with some crazy men and women...” user Vasiliev on 47news.ru “If the only alternative to public hearings is a complete abolishment of all participation procedures, then I would say I support public hearings. But in their current state they are extremely inefficient. Officials will listen to you, maybe even pay attention to some suggestions, but will these suggestions be really taken into account? I doubt it. Public hearings’ verdicts aren’t obligatory for implementation. This is the main problem”. Sergey Udaltsov, leader of the political movement “Left front” and Activist Group Union. Some of these flaws are the results of legislative failures, some are the consequences of various violations, some are the reflection of the overall state of civic society in Russia and the common pattern of interaction with the authorities, while some are “growing pains,” as the practice of public hearing on city-planning matters is still very young. 1. Place in planning process In Soviet city-planning since 1930s and first few years of post-Soviet practice public participation was limited and fragmented and mostly concerned preservation matters. Citizens’ right to deliberative participation in planning was first introduced by the Federal Law of 1995 “On the general principles of City-planning in Russian Federation” (Article 8) and then further developed by Federal City-planning Code of 2004 and City-planning Code of 2008 — in Moscow. Hearings, as mentioned before, are the last stage before project’s implementation and although the results of public hearings are nonbinding, disapproval of the project can lead to its change or ban — this normally happens on the local-scale projects that are not lobbied by big bigness or governmental officials. In this case the developer (land-holder) carries additional expenses that could have been avoided if public opinion was considered at the earlier stages of project development 2. Inconceivability. Documents and projects subject to public hearings are of technical character and often appear incomprehensible for non-experts. This problem, together with nonbinding results of public hearings, causes widely-spread “rational ignorance” — a refusal to invest time into the study of these documents because of the unclear outcome of participation. Not to mention that it is difficult to take an informed decision if the information is inconceivable. “These documents are practically unreadable not only for average residents but also for professional architects. Even mass-media has already raised the question of inconceivability. Looks like it has been done on purpose, so that no one can understand a thing which gives way to illegal construction” Kryvtsova Elizaveta, member of Moscow Socio-Ecological Federation

“...I DON’T KNOW WHERE IN RUSSIA THE INSTITUTION OF PUBLIC HEARINGS FUNCTIONS PROPERLY...” 3. Under-attendance There is no official statistics on citizens’ participation in public hearings but there is numerous evidence that Public Hearings are often under-attended: “No one is coming to public hearings, no one is guarding their interests, expect for a handful of outsiders, who are unable to take rational decisions anyway” “There was no information on public hearings in local newspaper. This shows how insecure the authorities feel: being afraid to announce public hearings — that no one attends anyway — to not provoke the electorate even though the matter is nonpolitical”. “We had been trying to find any of the participants but by that time it has become clear that no one attended public hearings” “People themselves don’t want to control the process just like in case with Genplan or infill construction. No one cares and no one goes to hearings but the moment they see a huge newly built blockhouse in their yard they start complaining that no one asked their permission” Poor attendance can be a result of rational ignorance and unwillingness to invest the time into an enterprise of dubious results, insufficient informing (limited readership of local newspapers and limited audience of governmental websites that publish the announcement) as well violation of informing procedures. Another important factor is a level of scepticism in Russian society. According to Edelman Trust Barometer 2012 Russia is the first amongst world distrusters which proves the general pessimism on the outcomes of participation in public matters and Levada Center surveys show a low level of trust to local authorities which results in refusal to interact with them even on matters that affect residents directly.

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Projects subject to consideration at public hearings often appear inconceivable to average citizens.

“Do you trust local authorities?” Source: Levada Center

4. “Locals only” policy This policy ensures the right of local residents to be heard and is probably designed to prevent fraud and manipulation. But projects subject to public hearings can be of city-scale rather than local significance (cultural heritage reconstruction, road project, etc.) or can be in the bordering area between two administrative districts — in this case there will be two public hearings hold separately in both areas affected. In Moscow this localistic policy has especially wide repercussions: it puts under question the feasibility of considering Genplan as a strategic development document — especially in context of the city expansion — as it is has to be independently considered in each municipality with local citizens only.

Genplan has to be independently considered in each rayon with local citizens only.

THEY WOR K In spite of all these failures, public hearings can function relatively well — at least in terms of taking people’s opinion into account — on a local level, especially in places where local communities are strong. Restaurant in Mitino On the 2nd of April, 2012 a project of a building that was supposed to host a restaurant was offered to public consideration. The citizens’ who attended — 17 — in total — almost univocally expressed their criticism and suggested building a pool instead as “there were enough places to eat out already but the district pool is constantly overcrowded and there is a need in another one”. The City-planning Committee issued a corresponding report and the project is now subject to change

District City-planning and construction Committee decided to rejects the project due to public hearings results.

5. No expert involvement policy Lay expertise can be insufficient for taking informed decisions on planning matters subject to public hearings, especially in the situation when projects and documents are inconceivable. However the list of participants doesn’t include independent experts and the “local only” policy can prevent them from participating, which creates a room for manipulations in the participants aren’t well-prepared or well-informed. 6. Decision-making procedure lacks transparency Although the members of the Land Use and Construction Committee’s are obliged to review and comment on all the suggestions and objections pronounced at public hearings, the decision-making process still lacks transparency. Public hearing is a deliberative institution, not a referendum, so the simple majority principle is inapplicable here. Together with the nonbinding results it can puts the feasibility of the public hearings as a procedure of accounting public opinion under question. 7. Fraud, manipulation and abuse of authority The list of possible infractions and violations can be infinite: not informing the citizens, falsification of reports, bringing hired “actors” that would speak on behalf of the residents, skipping public hearings, etc. And the higher the stakes, the more the chances for violation.

Troparevo-Nikulino shopping mall Citizens of Troparevo-Nikulino cause headaches to all sorts of developers on a regular basis. They had been furious watch-dogs of their rayon even before the implementation of public hearings and managed to “fight-off” a small green island between Lomonosovsky and Leninsky avenues.* Recently another attempt on the development of that area was undertaken. Local residents ran on- and off-line campaigns inviting neighbours to come to hearings. After the hearings they continued to watch the work of District Planning and Construction Committee and reported violations on the issuing of the final report on public hearings, sent requests on the final desicion to City Planning Department. Finally they got a reply that “due to the protests of most of the citizens the project was cancelled”.At the same time, public hearings appear to be practically useless when there is a strong lobby — business or governmental or in many cases both — behind a certain project. The results are ignored or — to save energy of the officials — public hearngs are just cancelled altogether

Left: Uprava officials brought homeless people to the exhibition of a shopping centre project to “scare off” the residents. Right: Beating up the participant of public hearings on Okhta-center in Saint-Petersburg.

Residents of Troparevo-Nikulino launched a campaign against shopping center construction, participated in public hearings and won.

T H EY D O N ’ T WO RK Countess Saltykova’s villa In the very center of Moscow — Bolshaya Bronnaya street — another historical building is being turned into a “multifunctional” office-building with two floors added on top, and three — underground. The author of the project is the same person who restored Voentorg and Moskva Hotel. Public hearings on the projects were never hold

WEAK SOLUTIONS The overall inefficiency of public hearings is no secret and is constantly discussed by the public, expert community and oppositional politicians. Recently it has been officially recognised by the government. As Moscow City Planning Code is undergoing changes in connection with Moscow expansion anyway, there were 5 million rubles granted by Moscow Government to research and improve the legislative part of public hearings “based on the experience of other big cities in Russia”*. Among the possible changes adjusting the time of public hearings and the register of participants if the project has to be constructed on a border territory between two municipalities.

BUT AUTHORITIES SHOULD BE TAKING THE FINAL DECISION ANYWAY... Another historic building is being turned into a “multifunctional complex” with offices, shops and underground parking. Archangelskoe estate-museum On the 11th of January 2012 public hearings on the project of development of Arkhangelskoe museum-estate (20 km west of Moscow) were held. The project suggests construction of two “hype rmarkets” of 58 thousands square meters.

PREDICTABLY, MOST OF THE PARTICIPANTS WERE AGAINST THE DEVELOPMENT. NEVERTHELESS PLANNING AND CONSTRUCTION COMMITTEE RECOMMENDED THE PROJECT FOR IMPLEMENTATION. CONSTRUCTION BEGAN IN APRIL 2012

Construction of a hyper-market for building and renovation materials in the midst of the estate-museum of Federal significance.

: “There was a precedent, — says the head of Rostokino (municipality in the North-East of Moscow) Uprava Petr Povolotsky — we hold public hearings on the capital reconstruction of four houses. In the end, we managed to restore only three houses because in one house there was a woman who ran a campaign against reconstruction. Now we have three houses with new façades and one is falling apart”. So considering the most common criticism of public hearings the possible list of changes can look like this: 1. Allowing citizens’ participation at the earlier stages of the project development to make it more meaningful and avoid additional expenses for project changes in case it doesn’t pass public hearings; 2. Establishing a different set of requirements for projects and plans — especially visual material — subject to public hearings in addition to technical ones to increase their comprehensibility; 3. Prolonging the terms of project exposition, especially in case of Genplan and Land Use and Development Rules; 4. Developing and implementing a criteria system for considering citizens’ objections and suggestions that would make City and District City Planning Committee’s decision-making mechanism more transparent; 5. Making the list of participants in pubic hearings more flexible in order to overcome “localism” when discussing the city-scale matters and well as projects concerning more than one region – or “municipal district”, “city district” and “settlement” in the new terminology; 6. Making participation of the project’s authors obligatory; 7. Facilitating participation of independent experts, hold open hearings for experts only prior to public ones for such projects as the Genplan and Land Use and Development Rules; 8. To compensate for the non-binding nature of the procedure, that can not be changed due to the nature of the institution, and to ensure citizen participation in further decision making, allow participation of citizens’ representatives (other than municipal deputies) in the in the District City Planning Committee.

< Public hearings on planning and construction matters should be replaced by referendums.

PUBLIC H EA RI N GS ¬ PO PU L A R CO N S U LTATION The problem with these amendments is that they don’t fix the main problem of public hearings: the nonbinding results that allow to discount citizens’ opinion and even cancel public hearings without a huge protest rallies in response as people don’t believe in this procedure anyway. As mentioned before, there are cases when hearings work but that’s mostly on a local scale. They can work on a bigger scale too if there is an international media-hype (CDKh project) or an authority of an international organisation like UNESCO involved (Okhta-center in Saint-Petersburg). But those were rather exceptions than common practice and the only thing that be could be set against the lobby of the government or big business should be something equally powerful. Something that doesn’t have the ambivalent and compromising character of public hearings, something that could really empower the citizens’. The results of public hearings should not be just recommendatory but legislative. Public hearings should be replaced by popular consultations — a direct democratic procedure that has binding results, with people making final decision on the project. All the rest — involving experts, changing terms of exhibition and visual materials — is just a palliative but not a cure. Ideally, the procedure of public hearings is supposed to be a system of “checks and balances” ensuring that interests of all the stakeholders are taken into account.

IN MOSCOW THIS SYSTEM IS HIGHLY UNBALANCED SO THE ONLY POSSIBLE RESPONSE IS TO THROW SOMETHING EQUALLY HEAVY INTO THE SCALE Considering the fact that citizens are to decide on a project that is already designed it should be a open referendum — an open and direct voting procedure hold on any case — from a local pool construction to the 58 000 square meters development of a historical estate-museum. The list of participants can vary depending on a scale of a project: from rayon scale to city-scale. To facilitate the procedure it can be hold online using the electronic signature. The results should be open so in case of a manipulation suspicion (citizens sound in mind can’t vote for the building of a construction materials hypermarket in the middle of a historical estate) there is a possibility of investigation. If citizens are the ultimate authority it would launch a chain reaction for resolving other malfunctions of the public hearings: 1.Place in planning process If citizens are to be the final authority, it is prudent to suggest that developers and authorities will make sure citizens participate in the project from the very beginning not to carry additional expensing for changing it. 2. Inconceivability of materials. Knowing that citizens are to decide, authors of the project would make their best to communicate it properly. Also, the rational ignorance wouldn’t be a

problem anymore as the outcome is tangible and there are reasons to spend time educating yourself. 3. Under-attendance. Same goes with lack of attendance. Citizens who don’t normally participate in public hearing will now take active part in the planning process if they know they can make a change and they don’t want other to decide for them. 4. “Locals only” policy The list of participants in the referendum will vary depending on the scale of the project: there is no need to involve the whole city if it concerns a construction of a garage in a microrayon in the North-East of Moscow but all Muscovites should have an opportunity to decide on a destiny of a park or a historical site of the city-scale importance. 5. No expert involvement policy. In 2006 President of Russian Federation issued a provision “On establishing advisory bodies for Federal Authority institutions”. In 2008 the similar advisory body was established for Moscow Government. Moscow Citizens can initiate establishing of the same body of independent experts to advice them on planning matters. 6. Decision-making procedure lacks transparency. It will become crystal clear now: yes or no. 7.Fraud and manipulation. As the referendum will be open and every citizen will vote under their own name it will be possible to control violation. And there will be more citizen control as with binding results steaks are higher. Such a measure might be a bit extreme. But isn’t a situation when citizens, although being a fully legitimate stakeholders (Moscow City-planning Code, Chapter 12), are easily ignored, extreme too? It obviously needs an adequate response. Clearly, this referendum policy doesn’t have to be implemented everywhere. It could do good in Saint-Petersburg where same problems exist. Sochi — because of the Olympics — as well. Perm probably doesn’t need it, similar to some cities in Moscow region where self-governance is quite well-functioning. We have to note, though, that in order to follow the famous principle of the “unity of city property” that allowed to centralise power to in Moscow and practically eliminated self-governance*, the implementation of referendum for planning affairs will require the symmetrical process of decentralisation in other fields.

R OC , I N C .

My name is Aleksandra Smagina I’m graduated architect and topic of my research is Church. Russian Orthodox Church is multifunctional, complex institution that shapes the city and society in the various ways often not connected among themselves. During my investigations I was looking on it throw different lenses and impartially tried to understand potential future role of Church in a post soviet Russia. Moscow was chosen as a case study.

HISTORY. STA RT I N G PO I N T “Orthodoxy, Autocracy, Nationality”- also known as Official Nationality - was the dominant ideological doctrine of Russian emperor Nicholas I, originally proposed by Minister of Education Sergey Uvarov. At its basis lay conservative views on education, science, and literature. According to this theory, the Russian people are deeply religious and devoted to the throne; the Orthodox faith and autocracy are indispensable conditions for the existence of Russia. During this period of history Orthodox Church was one of the biggest land owners in country. Nationality was understood as the need to adhere to their own traditions and reject foreign influence, as the need to struggle with the Western ideas, freedom of the individual, individualism, rationalism, which

were considered by Orthodoxy as “free-thinking” and “discord”. Within this theory the chief of the III office Benkendorf wrote that the past of Russia is surprising, the present is fine, and the future is more exciting than any expectations. With formation of the Soviet Union concept was radically changed. In definition of New society Church started to play absolutely opposite role, the role of enemy. The Soviet Union was the country of atheists. At schools no one spoke about God, all this kind of talks was kept for “kitchen” discussion. Open statement about the belief in God could deprive a person of working places or even worse. The values system of Soviet man was based on morality, character, and culture. People were obliged to believe not in God but in bright future of communist country where religion is not needed. So ideology “Orthodoxy, Autocracy,

( RE)CHU RC H T H E M EGACI T Y. I N T RO D U CTION

Workshop in Kindergarten at Chets Creek Elementary School “empower the future. From the minds of little architects”

Religiousness growth in Russia

Research by a nonprofit research service “Sreda“

believers % 0 1987

1992

1997

2002

SOVIET UNION

2007

WHO ARE “BELIEVERS”?

6% 4% 2%

15% 30%

frequency of a participle

43%

28% 7% 14%

2011

RUSSIAN FEDERATION

parishional life

44% a non-profit research service “Sreda“

Nationality” was replaced with “Party, State, Stalin”. Corporeal part of church institution has suffered a great loss during soviet time. On May 15th, 1932 the Decree of the government signed by I. Stalin had been declared “a godless five-year period”, all cult establishments in territory of the country should be closed. In 1914 according to official figures in territories of the Russian Empire were 54 174 orthodox temples, 25 593 chapels, 1025 monasteries; in 1991 there were about 7, 5 thousand temples and 16 monasteries left. New opportunities have opened up for Russian Orthodox Church after collapse of the Soviet Union. In December 1991 a low was passed “About returning to Russian Orthodox Church religious buildings and the religious literature”. In the same time independent life of church began with finding of the rights of the legal entity by the religious organizations according to the Law from October 1st, 1991 “About a freedom of worship and the religious organizations”. Present position of Russian Orthodox Church favorably differs from its status till 1917 when it had no independence and was subordinated to the highest secular head of the state – tsar.

NONCOR POR EAL PART Number of believers in Russia almost doubled since collapse of the Soviet Union. People always needed belief, whether it was communistic ideas dictated by the Soviet power or, for the lack of more those, in the highest forces. In fact, along with the secular power, the Russian Orthodox Church became today the second power in Russia. In spite of the fact that under the Constitution the Church is separated from the state. About 75% of population in Russia call theme self orthodox. But who are these believers? Sociological research of a non-profit research group “Sreda” published data which shows that 72% of all respondents

Left: never take communion at least once a year one-two times a year several times a year, but less than once a month Right: yes, actively involved yes occasionally involved no, thought would like to participate and i have such possibility but i do not have such opportunity no, not involved and did not want to hard to answer

once a month and more often no, but i would like to participate,

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92 10 73 15

130

1 4

17 29 13 2

28 18

24 5

2 2

6 11

3 2

9 3 2

000 000

Destroyed churches Closed or reprogramed

250

500

1000 km

“ T H E O N E , W HO WANTS TO AC H I EV E S E R IOUS CHANG ES IN T H E WO R L D, SHOULD B E AB LE TO A R RA N G E MAG NIFICE NT S H OWS, S E R ENE LY SHE D OT H E R P EO P L E ’S B LOOD AND TO I M P OS E AT TRACTIVE NEW R E L I G I O N I N THE SHORT PE RIOD O F R E P E N TA N CE AND HORROR W H I C H US UA LLY COMES AFTE R B LO O DS H E D.”

KU RT VO N N EG U T, “ T H E S I R E N S O F T I TA N ” never receive communion, only 15% among the orthodox participated in the parish life, 77% do not participated. That means that churches are overflowed only during events, but officials publish low about construction of 200 new churches (this is official data, non official 600) around Moscow for the reason of number shortage. As we see authority and power of Church grows isn’t dependent on «quality of believers». “It is interesting to note that in contrast to Yeltsin, Putin has been much more demonstrative about his close ties with the Orthodox Church. Alexey

Malashenko touched on this. He mentioned how perhaps it is weakness in the leadership that leads it to turn to religious organizations for additional support and validation. In any case, Putin has made a point of visiting the Patriarch regularly, and making these visits visible in the media. Understanding this, what is interesting to see is how this plays out on the lower levels. At lower levels, it has been interesting to notice how officials have made a point of being much more openly Orthodox as well. They have built Orthodox chapels in the Ministry of Justice and in the courts. Government officials regularly consult with local Orthodox leaders even on questions of whether to register other religious has made a point of visiting the Patriarch regularly, and making these visits visible in the media. Understanding this, what is interesting to see is how this plays out on the lower levels. At lower levels, it has been interesting to notice how officials have made a point of being much more openly Orthodox as well. They have built Orthodox chapels in the Ministry of Justice and in the courts. Government officials regularly consult with local Orthodox leaders even on questions of whether to register other religious organizations” (Woodrow Wilson International Center for Scholars, Washington, D.C.)

1914 (54 174 ORTHODOX TEMPLES) 1991 (7 500 ORTHODOX TEMPLES)

Map of churches abolished by the soviet authorities

CORP O REA L PA RT 1 Official data about revenue of Russian Orthodox Church is rather different from reality. Total income of all ROC structures not amenable to external evaluation due to decentralized accountancy, inaccessibility of curacy’s budgets, lack of access to the accounting reporting of dioceses and Patriarchate, as well as a significant share of the «shadow economy» component. During the interview with Aleksandr Morozov, chief editor of the Russian magazine, director of the Center of media researches UNIC, he shared some thoughts about economic part of this institution: “the president of the Russian Federation repeatedly ordered to experts the closed notes on this subject including to me, I wrote one of them. But as result nobody could estimate it. If someone asks me I would say that Economy of Russian Orthodox Church as a whole is comparable to Sberbank. Sberbank is a network structure having the repre¬sentations approximately in the same volume if we take the Russian Fed¬eration. But we compare not with assets which the population enclosed there but with that the Sberbank spends for itself.” Church is called to perform the invisible spiritual connection between adherents as well as between believers and Absolute. But at the same time it represents quite visible self-governing public organization-”a visible body”, that has horizontal and vertical hierarchical structure, which is also the holder of rights, including property rights and what is especially important the subject of economic relations. It is clear that the church as the economic subject can’t exist, without having the certain budget estimated in money. So in various ways it fills up revenues of the budget at the expense of various economic activities. In particular, the church makes and sells certain services and the goods and thus receives the income, counts profit. Nikolai Mitrokhin – historian, sociologist, one of few experts who tried to analyze and estimate actual situation and activity of Russian Orthodox Church as social and economic institute in Russia. In his work, he wrote “What is the Russian Orthodox Church in economic terms? In our opinion, a huge

^ Crystal Cup of yachts class «eM - KA». Team of Bank Sofrino, leaders of the season 2011, took part in a regatta (Sofrino - Russian Orthodox Church enterprise)

ECONOMY OF RU SSIAN ORT H O DOX CHU R CH AS A WH OLE I S CO MPARAB LE TO SBER BA N K . Sberbank is a network structure having the representations approximately in the same volume if we take the Russian Federation. But we compare not with assets which the population enclosed there but with that the Sberbank spends for itself.

> interview with Alexandr Morozov - chief editor of the Russian magazine, director of the Center of media researches UNIC

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< Map of Church businesses located in Moscow

policy, its impact on public opinion should be only transparent and open”. Also with that were published precepts for businessmen: - “wealth - not end in itself, it should serve creation of worthy human life and the people” - “appropriating another’s property, neglecting property the general, without rendering the worker for work, deceiving the partner, the person breaks the moral law, harms to society and” - “transfer in a type of tax of a part of the income for needs of society should turn from the burdensome duty executed dependently, and sometimes at all not executed, into honorable business, worthy thanks of society” “The poor person is obliged to behave, aspire adequately to effective work, raising the professional level to leave a disastrous condition” Precepts for officials are under development.

Corporation, uniting under a common name tens of thousands of separate or semi-independent economic agents. The exact number of these agents is impossible to determine, but only according to official data, ROC has no less than 19 thousands of parishes (communities), and approximately the same number of priests. In addition, there are approximately 500 monasteries, about 130 dioceses, as well as an unknown number of commercial structures operating in the temples or controlled by individual priests.” Mitrokhin estimate cumulative annual ROC income in 500 mln.$ and predict rapid grow up to 2 mlrd.$ in 2011. Business that controlled by Church in Moscow and Moscow region could be divided up into categories: -owner -partnership (franchise, ets.) -creditor -lobby for the interests There’s no clear answer to question “what product does ROC sells now days?”. It trades in BMW cars, oil throw a network of affiliated companies; partner of banks, realtor agencies; owns factories, publishing and pilgrimage centers. But there’s a uniting link called “tax privileges of Religious organizations”: -land tax (are subject to release from payment of a ground tax concerning the land lots belonging to them on which buildings, struc¬tures and constructions of religious and charitable appointment are located) -property tax (are released from the taxation concerning the property used by them for implementation of religious activity) -value added tax (have the right to release from fulfillment of duties of the taxpayer, connected with calculation and VAT payment if in three previous consecutive calendar months the sum of proceeds from sales of the goods (works, services) without a tax didn’t exceed in aggregate 2 million rubles) -profit tax (At definition of tax base the income received isn’t considered: -in the form of the property received by the taxpayer within target financing -in the form of property (including money) and (or) property rights which are received by the religious organization in connec¬tion with commission of religious practices and ceremonies and from realization of religious literature and subjects of reli¬gious appointment -the property, passing to non-profit organizations according to the will as inheritance -means and other property which are received on charity implementation.)

< Nicolai Mitrokhin “Actual situation and activity of Russian Orthodox Church as social and economic institute in Russia”

For management of financial streams was created own Center of Investment Programs. Experts started to position ROC as a new participant of investment process in Russia. Elena Shulgina, chairman board of the center, explains: “This was done with the blessing of Patriarch for the implementation of economic programs of the Russian Orthodox Church in the field of agricultural and hotel business. The first project will be the construction of a large-scale hotel and the residential-office complex in Tver - value of 10 million dollars. In a little less cost of construction Bogolubovcki meadows under Vladimir.” In 2007 Center of Investment Programs of ROC organized an international investment forum in Berlin where shared the charitable plans: business center construction at the corner of Pyatnitsky and Klimentovsky Lane, elite housing estates in Lazorevy str. and on Ostozhenka (the center of Moscow), construction of the whole residential district “Tver City” with hotels, houses, shops, supermarkets, reconstruction of the historical center in Vladimir. Expected income of investments is 40% annually.

“ C H URC H — TH E UN I QUE B US I N ESS WH I C H D URI N G BA D TI M ES E N D URES E N VI RON M E N T PE A K.” C H A R L ES A N G E L < Website of Orthodox realtor agency

Since terms «property of the liturgical purposes» and «the property of religious purpose», used in the texts of laws, not fully clarified, Church can represent under this term everything that will consider it necessary. A year ago at the arch of moral principles and rules in managing accepted by the Moscow patriarchy on the VIII World Russian national cathedral seventh of ten precepts of this document says: “Participation of business in

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near ten moscow temples shopping centers and shops will be erected. Investments: 25-30 mln.$

Business Center on Pyatnickaya str. offices, trading, exhibitions, hotels

Multifunctional complex

Housing elite estate

southwest of Moscow

Lazorev proezd

Business center at Spartacovscaja str.

Tver

Moscow region Sergiev Posad

Pereslavl-Zalessky Yaroslavl

Rostov

Kostroma Vladimir

Suzdal Ivanovo

Shopping mall+ Reconstraction offices “Tver City” of historical city center

Hotel complex

Network of hotel complexes in the cities of the "Golden Ring"

^ Church developments around Golden Ring of Russia

2 Another aspect of “corporeal part” is land. The federal law of the Russian Federation from November, 30th, 2010 N 327-FZ “About transfer to the religious organizations of property of the religious appointment which is in the state or municipal property” can turn Church into the largest owner in the country. “After all only Gazprom and Russian Railway can compete with Russian Orthodox Church. In Moscow average cost of 1 hectare of the earth is about 6-7 million dollars” — considers director for development of consulting company Prime City Properties Roman Cheptsov. Dmitry Shamin, head of Investment Center, in his turn noticed that “comparison with Catholic church not quite exact. ROC is just simply returns itself that it had till 1917”, that means that Church is only at the beginning of a big way: before revolution it was one of the largest land and property owner in Russia. To get property, religious organization must apply to the authorized body with the application which “proves their right to property”. Responsibilities of the religious organization also includes the maintenance of property for religious purposes in good condition, including implementation of current and capital repairs as well as bear all expenses on its maintenance. New owner has no right within ten years to change purpose of the returned property and to transfer it to the third parties. Legislators stipulated one more important condition: transfer of buildings and constructions of religious appointment is possible

Tver

Moscow region Sergiev Posad

Vladimir

Pereslavl-Zalessky Yaroslavl Rostov Kostroma Suzdal Ivanovo

“ NEW PA RTI CIPANT O F I N VESTME N T P R O CESS IN RUSS I A- RU SSIAN O RT HO D OX CHUR C H ” ^ Golden Ring Cities

LAND FRO M M UN I CI PA L A N D G OV E R N M E NTAL PROPERTY

VATI CAN <

TO RUSSIAN ORTHODOX CHURCH

TO THE MOSCOW DIOCESE

only after granting other rooms to the enterprises located there. Law stipulated that Church can’t receive in property valuable objects - monuments and ensembles included in the list of the world heritage of UNESCO. For example, Vasily Blazhenny cathedral or temple ensemble of the Moscow Kremlin. About twenty objects in total.

Russia. In Moscow about 67 thousand people came to Cathedral of Christ the Savior. The patriarch declared that Russian Orthodox Church is exposed recently to attacks of the persecutors, not comparable to that was in the past. Also with that he note “We threaten noone, we don’t show the force, but nobody can forbid us during the crucial moments of history - and today we endure such moment - to gather on prayful standing”.

Instead the state will get rid of need to contain temples and adjacent to them territories what is especially relevant in post-crisis conditions. “The state reports Churches property not so disinterestedly: the power that is now loosing trust

“ CH U RC H CAN B ECO ME A LARG EST OW NER IN T HE COUN TRY. AF T ER ALL O NLY GAZ P RO M A ND RUSSIAN RAILWAY CA N CO MPET E W ITH RUSS I A N O RT HO D OX CHUR CH ” of the people, decided to gain authority through Church, - consider deputy chairman of the Central Committee of the CPRF, Vladimir Kashin – He also notices that since now Church will wish to be engaged in commerce, to hand earth over in a tenancy “. By-turn if religious organizations own property they become independent from the state and power can lose pressure levers. Church is unique institution. When it has to pay taxes it acts as religion organization and getting benefits from the government but when it wants to earn money it becomes a business structure, forgetting about it supreme appointments. Nowdays ROC became too active in the political and economic field that increase frequency of displease and bewilderment from citizens. In the second week of Easter, in day of the apostle of Doubting Thomas, patriarch Kirill made a public prayer “In protection of the belief, the scolded shrines, Church and its reputation”. This action took place across all Russia and was the most large-scale of similar actions in the contemporary history of

amount of land that the church can receive in a property (around Russia; around Moscow)

N OON E CA N FORB I D US D URI N G TH E C RUC I A L M OM E N TS OF H I STORY-A N D TODAY WE E N D URE S UC H M OM E N TTO GATH E R ON PRAYF UL STA N D I N G < a public prayer “In protection of the belief, the scolded shrines, Church and its reputation”.

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< Map of existing churches, new planned, metro availability

^ photo of prefabricated church from field trip to concrete factory DSK-1

^ photo from the side, southern AR

“ P REFABRI CAT ED CH U RCH ” PH E N O M E N O N

New York – Hood – is the pastor’s last resort. He cannot go back to the businessmen to tell them that the basement will be completely occupied by piers instead of cars. Hood reassures him. “The trouble with Mr. Cram is that he has no faith in God. I will design a church for you that will be the greatest church in the world. It will include all the hotels, swimming tanks and candy stores you desire. Furthermore, in the basement will be the largest garage in Christendom because I will build your church on toothpicks and have faith enough in God to believe it will stand up!” For the first time Hood works on a multipurpose building. Indifferent to programmatic hierarchy, he simply assigns parts of the Mountain to the necessary functions. With barefaced literalness he projects two floors – the Cathedral and the Parking Garage, separated only by inches of concrete – that realize his boats to the pastor and represent the final implementation of the Great Lobotomy’s indispensable complement: the Vertical Schism, which creates the freedom to stack such disparate activities directly on top of each other without any concern for their symbolic compatibility. The church episode is emblematic of Hood’s, and his colleagues’, state of mind in the mid-twenties; they have developed a schizophrenia that allows them simultaneously to drive energy and inspiration from Manhattan as irrational fantasy and to establish its unprecedented theorems in a series of strictly rational steps.”

In conjunction with the acute shortage of orthodox churches in Moscow was developed plan about construction of 200 new temples step-by-step availability. For acceleration of this process was made a decision about “prefabricated churches”. Construction begun in September, 2011 and planned to finish in June, 2019. It’s a joint project of Church and government of Moscow that conducted only on donations. Responsibility of the state: allocation of the land lots, the solution of the questions connected with preparation of construction, receiving necessary coordination, and also the help in selection of investors and contractors of con¬struction. Mostly new objects would be allocated on the city periphery by virtue of the fact that mostly churches are located in the city center and low-mobile groups of the population that live in remote areas have no possibility to visit them. Some of new churches are planned to be build in green zone where construction is forbidden, that causes wide discontent of locals. For process acceleration churches will be “prefabricated”, developed several configurations dependent from the planned number of visitors. Also with that authorities consider that temple buildings would help to equip city space which surrounds Muscovites today in more reasonable way because often architectural dominant in new districts of Moscow is shopping or office center. But here we can notice contradiction, paradox due to the fact that near ten Moscow temples, on the earth belong¬ing to them, shopping centers and shops will be erected, Investments: 25-30 mln.$, each shopping center will have the area of 3-10 thousand m2.

SCHISM (Delirious New York, Rem Koolhaas, 171-173p.) “In the tradition of the dime novel, one day in the mid-twenties a pastor comes to see Hood in his office. He represents a congregation that wants to build the greatest church in the world. The congregation was one of businessmen and the site was an extremely valuable one… Therefore they wished not only to build the greatest church in the world, but to combine it with revenue producing enterprises including a hotel, a YMCA, an apartment house with a swimming pool, and so on. On the street level would be shops, to bring in high rentals, and in the basement, the largest garage in Columbus, Ohio. The garage was very important, because, in giving his congregation a place to park their cars on coming to work weekdays, the pastor would indeed make the church the center of their lives… The pastor had first gone to Ralph Adams Cram, a traditional church architect, who rejected him, especially indignant about the suggested garage. “There would be no room for cars because this noble structure would be constructed on tremendous granite piers…that would support it through all times as a monument to their faith.

Following this episode I realized the Horizontal Schism of the Church now days. In Russia this institution represents multifunctional, spatial structure. Which expands a range of the actions and territories, without concern about “hectare cost”. Church is not only about soft power but it’s also an independent developer that shapes the city by its own scenarios that known only by Patriarch and God…

ROC, Inc.

In today’s world, cities with a population of more than 10 million people are known as megacities, and often act as points of congestion: ever-growing, expanding, and looking for solutions to their main problems as a result. To some extent, these ‘meagcities’ have outgrown the definition of the city, but are still not as ‘powerful’ without the mandate of the state. Their economic, political and cultural influence extends far beyond their administrative boundaries, while these boundaries define the limits for the city administration. Nowadays there is no consensus on how the planning and development policy of megacities could overcome the contradictions arising at the borders. However, in case of Moscow, a radical political decision to expand the administrative boundaries of the city was adopted. For this reason, could Moscow be the perfect testing bed for the right solution of how to plan a megacity? With the fall of the Soviet Union in 1991 and the establishment of a new state regime in Russia, Moscow is experiencing dramatic changes.. As a state, the “new” Russia is trying to establish itself on the global political landscape through a policy of centralization. As a result, Moscow has been enhancing its power, pulling the economic resources from all over Russia. According to

experts , by 2025, 30 million Russians or about 20%will live in Moscow. The share of Moscow in Russia GDP will be around 30%. Thus, about third of entire economic and human potential of Russia will concentrated on its territory. Moscow in the near future is a unique global Megacity located between Europe and Asia, far away from other major cities.

T HE L I M I TS OF P LAN N IN G

Officially , 11.6 million people live in Moscow, which is 12,4% of Russian population. However, various estimates suggest that 14-15 million is the actual population of Moscow, which means Moscow features even higher on the list of Megacities . As might be expected, Moscow is not only the richest Russian city but one of the richest cities in the world:its GDP at PPP is 321 billion dollars, ranking 15th ranking place globally. The GDP of Moscow corresponds to the national

Population by Moscow districts and cities of Moscow Region

The city of Khimki on the border with Moscow sourse: Frost & Sullivan. Russia of the future, 31 May 2012

sourse: Rosstat, 2012

The Limits Of Planning

< 70

GDP per captia in 2008 ($K at PPP),

60 50

Source: Pricewaterhouse Coopers

40 30 20

10 0

New York London Chicago

Paris

Tokyo Osaka Moscow Buenos Mexico San Istanbul Rio de Shanghai Mumbai Aires City Paulo Janeiro

GDP per captia Russia (K$ in current prices) Source: Rosstat

GDP of countries such as United Arab Emirates (315$BN) and Argentina (326$BN).

2001

2002

2003 Russia (average)

2004

2005 Moscow Region

2006

2007 Moscow

2008

2009

Naturally, the economic influence of Moscow spreads beyond the city’s administrative borders well into the territory of Moscow Oblast . This is even more force migration from Russia and CIS countries to the Moscow Metropolitan Area, as well as local labor migration from Oblast to Moscow. According to the chairman the Moscow City Duma Vladimir Platonov , the number of illegal immigrants in Moscow is close to3 million. In addition, about 1.6 million people commute every day by train and near 1 million by their own car from Oblast into the city. Strong spatial, economical and cultural links will enhance the mutual dependence of Moscow and Moscow Oblast, perhaps even to the point that the two entities could become a single integrated region Moscow Megacity.

“..IN FACT, MOSCOW I T I S N OT J UST A C I TY, I T I S REG I ON OF RUSS I A . . .” Moscow is a region of Russia on the same level as Moscow Region, consisting of municipal entities. If you look on Moscow from this point of view, it is made up of 125 “cities” with population of up to 243 thousand people, which also corresponds to the size of cities in Moscow region. There are historical reasons for this; in place of the current Moscow districts, previously were located towns and villages of Moscow Region, which after were taken by Moscow. Therefore we can conclude that Moscow is already polycentric

As far as Moscow is becoming such a Megacity, the questions arise: how to manage it, how to solve specific problems of the big cities as a housing, transport, waste disposal etc.? In Russian tradition the management of the capital of Russia is a political subject rather than a practical subject. The decision about Moscow’s expansion to 2.5 times its current size, adopted in 2011 by President Medvedev, reflects the government’s continued desire to impose their opinions and directions onto Moscow’s future development.

D EV E LO PMENT Since Soviet times residential development in Moscow carried out by means of mass housing construction or “microrayons.” They were built on the free areas, usually near the borders of the city, which was Moscow Ring Road (MKAD). Gradually the density and altitude of microrayons increased, reaching values 25-30 thousands sqm/ha. Eventually, the majority of the population has accumulated on the outskirts; so, there was a reversal the city. If we have a look to the density map of Moscow we will see the most populated areas are in proximity to the MKAD and relatively low in the city center. By the end of the 20th century economic environment has changed. Moscow has experienced an economic boom especially in the field of real estate development. Due to demand construction and development become the most profitable business. Since 1991, the average price of apartments in Moscow has increased 78 times , from 5 000 to 390 000$. The most dramatic rise in prices was recorded in 1996 and 2000, when the value of square meter of apartment has increased by about 150 percent per year.

“ . ..SIN C E 19 9 1, T HE AV ERAG E PRIC E OF A PART MENTS IN MOSCOW HAS INCREASED 78 TIMES....” Finally, real estate market faced with two issues: no more free land for development within the boundaries of Moscow; high price threshold forced demand of housing outside of Moscow. Despite Moscow’s GRP per capita and average income about 3 times higher than the average in Russia and comparable with Western cities such as Barselona ($32 300), the provision of living area per person is one of the lowest in Russia – 18,7 sqm/person. It is on the same level as poorest regions such as Buratya (19,2) or Karachaevo-Cherkesiya (18,8). In addition to a physical shortage of land, Moscow investment climate in Moscow is worse than in the Moscow Oblast. The reasons for that: the high price of land, high wages to employees, high risks of management, as well as administrative barriers, which includes long negotiations with the Moscow administration and high rates of corruption. According to “Rating of investment attractiveness of Russian regions” for 2011 made by Russian rating agency “Expert” , to Moscow Region assigned the highest investment grade (1A) versus relatively risky Moscow (1B) . The high risk of doing business in Moscow illustrates the fact of the freezing of construction contracts after Sobyanin came. Shortly after Sergei Sobyanin headed to Moscow in 2011, he canceled about 200 investment projects with total area of 7 sqm, in the amount of $ 35 billion . As the same time he said: “We have decided to prohibit construction in the center of Moscow“ and called the “Moscow City” business center as an “urban planning mistake”. The Association of Russian Builders calculated the average cost of construction and sale of one square meter in Moscow and the Moscow Oblast. The greatest difference between the cost of construction of houses and prices in the primary housing market recorded in Moscow : 66 thousand rubles construction, 138 thousand rubles sales, versus Moscow Oblast: 55 thousand and 61 rubles respectively. More than double difference in the price of construction and selling of living area of mass housing in practice means 10-30% revenue of developer . The rest of the sum is administrative costs, especially in the allocation of land in Moscow (the high price of apartments is usually laid at the stage of the auction for the land), including the corruption component that estimates 10-30% of entire budget. Risks of corruption and opacity of the Moscow real estate market dramatically reduce the level of its development and the advent of global investments. Here is how the analyst of the center “Real Estate Market Indicators” IRN Oleg Repchenko commented on the situation : “In housing construction the main problem - corruption. Foreigners for the most part do not understand and do not like things like transfer money in a suitcase in a steam bath with the head of the administration. In their understanding, it is corruption and political risks, they prefer it not to get involved”.

As the same time due to lower cost threshold and less strict bureaucracy the Moscow Oblast becomes more attractive, especially in the complex development; the investment potential has been accumulating near to the borders of Moscow. As a result, Moscow Oblast is an absolute leader in new residential construction and living area per person and; the gap between other regions is gradually increasing every year. Five cities near Moscow, the leaders in residential construction: Odintsovo, Balashikha, Lybertsy, Poldsk, Krasnogorsk, with total population 1,7 million of people, together bring 2.8 million sqm per year of new housing. It is more than 1 million sqm than in whole Moscow. These cities are located in different directions around Moscow. There was a full merge of housing markets in Moscow and Moscow region, where the regional market is a continuation of Moscow. This supports the logical process of growth of the periphery of Moscow Megacity, which represented by development of cities of Podmoskovye. Ironically, housing within the MKAD jumped to the price category of “business class” which is actually the same generic microrayons, and push people with low incomes outside MKAD into Oblast. This is a long-term trend that will only increase. According to the Ministry of Construction of Moscow region, in the region up to 2016 is planned to implement 90 projects with a total area of 35.8 million sqm of housing . In the late 2000s before the crisis of 2008, in development a new phenomenon appeared called “Megaprojects”. There was no clear definition of what it is, however, it can be considered as development projects with more than 1 billon of dollars of investments with gross area more than 1 million square meters. In the wake of the euphoria of rising real estate market and overall economic growth in the Moscow region was announced about a dozen such projects. Usually they were large residential complexes, considered as new “cities”, at a distance of 10-25 km from MKAD. The most significant in scale were the projects “A101” on the 350 000 and the “Great Domodedovo” on 450 000 people. However, after 2008 with the beginning of the economic crisis, the development of Megaprojects have been declining dramatically; many private developers have begun to sell off their assets. In particular, the project “RublevoArkhangelskoye” near Moscow, conceived as the “city for billionaires”, in the end went to the state “Sberbank”. Interestingly, the lands intended of implementation for these projects, were purchased by private business from the former kolkhozes, mostly in the South and the South-West part of Moscow region, traditionally agriculture part of Moscow Oblast. Thus, we can say that these projects have created the preconditions for the emergence of the expansion project of Moscow. This is confirmed by the fact that megaprojects “A101” , “Rublevo-Arkhangelskoye” and “Skolkovo” have become cores of Moscow expansion.

The Limits Of Planning

thousands of people/sq. km

8 7

mln. sqm per year

6 5 4 3 2 1 0 Moscow oblast

Krasnodar kray

St. Peterburg

Tatarstan

Bashkortostan

Rostov oblast

Sverdlov oblast

Moscow

30,0 - 27,5 27,5 - 25,0 25,0 - 22,5 22,5 - 20,0 20,0 - 17,5 17,5 - 15,0 15,0 - 12,5 12,5 - 10,0 10,0 - 7,5 7,5 - 5,0 5,0 - 2,5 2,5 - 0,0

sqm per person

2000

2001

2002

2003

Russia (average)

2004

2005

2006

Moscow Region

2007

2008

2009

2010

Moscow

Top Left: Amount of new housing construction in 2011, mln. sqm per year. Right: Density, thousands of people per sq. km., 2011. Bottom Left: Living area, sqm per person. Sourse: Rosstat.

K$/sqm 9 500 9 000 8 500 8 000 7 500 7 000 6 500 6 000 5 500 5 000 4 500 4 000 3 000 2 500 2 000

Left: A typical advertisement for the sale of new apartments is cities of Moscow Region. Right: apartment price, K$ per sqm in 2011, source: IRN.ru.

BO R D E R CONDI T I ON S

17th Century - Historic core 1917 - Railway Ring 1935 1960 - MKAD

before 2012

proposed after July 2012

Since the early 20th century, after the October Revolution of 1917 until the early 21th century, Moscow has increased its area from 203 sq km (border of Moscow rail ring) up to 1091 square kilometers, or by 5,4 times; moreover, at the same period the population grew from 1 million to 11,5 million of people. During the growth a lot of settlement and villages were absorbed by Moscow, their names stored in Rayon’s names. The major increase in the 20th century occurred in 1960 when the Moscow’s boundaries were extended to the Moscow Ring Road (MKAD). The present expansion of the boundaries is 2.5 times, committed on the instructions of President Medvedev, makes the area of Moscow equal to Luxembourg. In Soviet times, Moscow’s expansion of the boundaries was approved by Supreme Soviet of the RSFSR . In fact, in August 18, 1960 followed by a decree of the Presidium of the Supreme Soviet of the RSFSR “On the extension of city limits, changing the administrative-territorial division of Moscow and the transfer of administrative and economic subordination to the Moscow City Soviet of People’s Deputies of protective forest-park zone”, by which the jurisdiction of Moscow went beyond the MKAD and seized the forest belt along with the major cities of Moscow region: Krasnogorsk, Balashikha, Lyubertsy and Mytischi . However, by November 1961, these cities

had returned back to the Oblast. Subsequently, ambiguous decisions of Supreme Soviet of RSFSR resulted in a series of conflict on the borders between Moscow and Moscow region after the fall of the Soviet Union. Since the Soviet Union all the land belonged only to the state, the administrative transfer of lands from one to another state entity had no any problems. With the emergence of the Russian Federation in 1991, the attitude to the territory is fundamentally changed. There was an understanding that some areas are particularly important as economic resources. Such problems was mostly acute for Moscow, where the ground suddenly turned into a treasure. In addition, since Moscow began extend beyond MKAD, it borders began to take bizarre forms subsequently became the causes of serious conflicts and numerous of territorial claims. Let us examine main ones.

10 km

The growth of the territory of Moscow

The Limits Of Planning

< MKAD Ring Road source: http://igor113.livejournal.com

> The conflict in Scherbinka source: “Russia” Television

M KA D MKAD has long been the boundary between Moscow and Moscow region. However, the question remained of what distance from the outer side of the road Moscow ends and starts Oblast. It was the major dispute, because a lot of restaurants, shopping centers, gas stations and advertisement billboards were built there. During this period, in the 1990s and 2000s MKAD changed its meaning from bypass road to the busy main road, a link between Moscow and the Oblast. Moscow demanded 45-meter zone outside of the ring, claiming that these areas since the Soviet times Moscow were allocated for the maintenance of the road. Oblast insisted only for 1 meter. Despite extremely small length, from it depended on substantial tax revenues to the budget especially of Moscow Oblast. In order to resolve the dispute was a commission consisting of Moscow and the Regional deputies, but the decision has not been found over the years.

SCHERBINKA Podolsky District of Moscow Region In 2006 Moscow authorities and the Moscow construction company “SU155” started to build social housing for moscovites on disputed territories 3000 ha in another city Scherbinka near Moscow’s border, relied on the decision of the CC CPSU and USSR Council of Ministers of April 17, 1987. According it, the part of the farm “Lenin’s Way” is passed to Moscow for the construction residential area for MVTU University, which was never built. Authorities of Scherbinka did not recognize that decision and regarded such activity as seizure its territory by Moscow with armed troops of the Moscow police and private security guards. In this way, between Moscow and the neighboring town had occurred a local armed conflict. Here is the comment beginning of construction an eyewitness, the deputy of the

“ . ..O N FRIDAY MO R NING, T H E MOSCOW POLICE SEIZED A HECTA RE OF LAND NEAR T HE TOWN OF SCHERBINKA...”

KH I M KI N S KY FOREST

Moscow Regional Duma, Nikolai Cherkasov : “On Friday morning, the Moscow police seized a hectare of land near the town of Scherbinka, Podolsky District of Moscow Region. More than a hundred police officers and private security have taken down the fence, installed by us, and in its place erected new one. Moscow police strengthened its forces in the area. Their staff is sitting on the building blocks of every meter.”

“...SCHERBINKA - NECESSARY LAND RESOURCE FOR MOSCOW, WH IC H I S ESSENT IAL FO R THE PROVISION OF SOCIAL HOUSING FOR MOSCOVITES...”

Khimki has become known due to scandalous story of the lining of the federal highway Moscow - St. Petersburg through forest (Khimkinsky les) near Sheremetyevo Airport, which was widely publicized in the press. In order to lay the road it took to cut down a significant amount of protected forest, cutting it in half. To the defense forests has raised active social movement “Defenders of Khimki Forest” together with “Greenpeace” and WWF, which organized the camps and hindered deforestation. Environmentalists insist on alternatives routes around the Khimki forest. Both alternative ways are partially passed through the territory of Moscow, Molzhaninovsky rayon. It should be emphasized that Luzhkov had a personal

As the same Deputy Mayor of Moscow Vladimir Resin said: “Scherbinka - necessary land resource for Moscow, which is essential for the timely provision of social housing for Moscovites”. In 2007 the authorities of the Moscow region were asked for help President Putin and made lawsuit to the Constitutional Court in 2008. Finally the authorities in Moscow and Moscow region have agreed to the withdrawal of the mutual claims against each other and end litigation over the disputed territory. The conflict in Shcherbinka example of the aggressive policy of the Moscow authorities, when the territory of a neighboring city is viewed solely as a resource for the growth of Moscow. Subsequently Shcherbinka will be absorbed during the expansion of Moscow.

The City of Khimki the second largest in the Moscow Region with 215 000 inhabitance has become painful point, where the clash of interests of different levels of power: Moscow, Regional and Federal. If we look to the borders of Khimki we will see how are they are ridiculous and self evident: like a “puzzle” Moscow invaded into the city with their districts and Molzhaninovo and Kurkino, almost dividing Khimki into two parts. These districts were joined Moscow in 1984 by the decision of Soviet of the RSFSR. In addition it is the least populated areas of Moscow, e.g. in Molzhaninovo live only 3.5 thousand of people.

The general plan of the city of Khimki

S HE R E M E T Y EVO A I R P O RT

MOSCOW

K HIMK I

KHI M KI NS KY FO R EST

KH I M KI

The Limits Of Planning

A P P ROV E D WAY

K HIMK I NS KY FOR EST R EJ ECTED WAYS

MOSCOW

MOSCOW KH I M KI

Variants of the federal road Moscow - St. Petersburg. Options passing through the territory of Moscow were rejected. Approved the variant passing through the Khimkinsky forest.

interest in the Molzhaninovo, because in 2004, the construction company of Luzhkov’s wife “Inteko” got right to the construction of two land plots with total area of 225 hectares in Molzhaninovo, and was planned to build about one million square meters of housing . So these alternatives were rejected by the Mayor of Moscow Luzhkov, as he openly spoke as in his article, where he expressed as a proponent of building the road through the forest. Luzhkov said the following: “lining the road through Molzhaninovka, we throw out 200,000 square meters of housing, preparing for construction. 3-4 thousand families remain for a long time without improvement of housing conditions”.

“ L IN I N G TH E R OAD T HR O U G H MOL ZH A N INOV KA, W E T HR OW OUT 200,000 SQUARE METERS OF H OU SI N G, PR EPAR ING FO R CON STRU CTIO N...” Moratorium adopted by the President of Russia, did not affect the implementation of the project, which followed the original plan. Thus, the border of Moscow and interests of the Moscow Mayor became the determining factor lining road through the forest. An example of the conflict in the Khimki forest shows how inadequate planning policy due to the presence of oddshaped boundaries, as well as self-interest the mayor of Moscow leads to social protests and provocations. The culmination of the conflict has become a neoNazi attack to the mayor’s office of Khimki, attended by about 700 people, which took place 28 of July, 2010.

Attack of radicals against the Khimki mayor’s office, 28.07.2010

G OV E R NA NCE “ PLAN S A RE NOT HING, PL ANN I N G I S EV ERY T HING.” Dwight D. Eisenhower The decision about expansion was done without any announcements or public discussions; the whole country was just placed before the fact. The General Plan of Moscow, which is intended to determine the plan of development of the city till 2025, had not mentioned the dramatic annexation of the territory. This political ad hoc solution totally neglect the planning, shows the worthless of the General Plan, its limits and inadequacy. Moscow is an example where the policy actually is planning. With the Moscow’s expansion to the borders of Kaluga region, Moscow constitutes “independence” from Moscow Oblast by forming the “Capital federal okrug” and ceased to be an enclave. As the same time, Moscow region becomes “cut” by another region of Russia. The idea of “agglomeration”, which means first of all socio-economic convergence and joint development together with neighboring cities was refuted. Instead, the project of “extending the boundaries” was proposed. In other words, set a course for the further disintegration of the region along the border: “Moscow - not Moscow”. In regard with the decision of expansion, which means the complete reconfiguration Moscow and Oblast, the natural question arise is how to govern such Megacity. As we have observed from previous chapters, the opposition and development of one region over another, especially establishment of the boundaries, inevitably leads to disintegration and conflicts in the future. The existing administrative system of governance of Moscow, inherited from the Soviet times and which incorporates the features of capitalism, is not capable to effectively develop the territory otherwise than on the colonial principle. Such administrative-command mode will spread into new territory. Mayors of towns and heads of settlements will lose much of its authority due to fall under the law of Moscow “about local government”, and will be built into the system of executive power of Moscow. Despite the declaration to preserve certain rights to municipalities, Moscow authorities proclaimed the monopoly of the disposal of lands of new territories in favor of mayor and city government. Deputy of the Moscow City Duma Anatoly Petrov said to take away the rights to dispose of land from municipalities on the annexed territories and to give it to the City. Although, the city of Moscow is the subject of Russian Federation, therefore Moscow’s mayor like any other governor is responsible only for regional duties, such as planning and maintenance of regional objects (facilities of transportation, energy, etc). The issues of local importance, including city planning, development of the territory addressed at the municipal level mayors of cities and settlements. At the highest state level, Russia recognizes the need for the development of municipalities. In March 20, 1998 the State Duma ratified the European Charter of Local Self-Government . Then, based on the statements of the Charter, in 2002 came the Federal law 131 guarantees the rights of local selfgovernments throughout territory of the Russian Federation. According to the law, the range of local responsibilities includes: establishment, modification and cancellation of local taxes and duties of the municipal district; possession, use and disposal of property in the municipal ownership of the municipal district; maintenance and construction of public roads between settlements, organization and implementation of environmental management of industrial and social facilities in the municipal area recycling of household and industrial waste; urban design, environmental improvements and protection of urban forests located within the municipal district; planning, zoning of city areas, establishment of the Rules of land use; the removal of land within the urban county for municipal purposes, including through the purchase, implementation of land control of land use urban district, cadastre and land management planning documentation.

So the main question arises how to provide a coherent planning policy to ensure the common interests regardless of administrative frontiers. The story of the General Plan shows that the plan itself does not really matter, because the reality will require us to change course during their implementation. Thus, the main thing is the planning framework, ensuring the implementation of policy objectives and flexible enough to allows changes.

“ . . .TH E STORY OF TH E G E N E RA L PL A N S H OWS TH AT TH E PL A N I TS E L F D OES N OT RE A L LY M ATTE R. M A I N TH I N G I S TH E PL A N N I N G F RA M EWORK. . .” Despite the different interests, at the regional level between Moscow and Moscow region there is some positive changes. First, is to create a “Joint Board of the executive bodies of state power of Moscow and Moscow Region”. This commission is a consultative body, and its decision has recommendatory character. It is clear that such body is able to deal with general issues of regional importance, at the strategic level. However for specific issues it is necessary to involve the selfgovernment entity at municipal level, which is under the control of inhabitants, how is written in the Constitution. Otherwise, in a situation where senior government officials as the mayor of Moscow or Moscow Region Governor, impose its decisions on the basis of personal interests, there are violent conflicts affecting the entire region, as happened in the history of the Khimki Forest. The Federal law allows to municipalities can work jointly to defend the common interests and develop its territory. So, for municipal entities available: to create Municipal councils and association to create multi municipal commercial (like Joint Stock Company) organizations or noncommercial organizations to enter into contracts and agreements on joint activity Moreover, various municipalities, such as municipalities of Moscow and the cities of Moscow Region may organize joint ventures, which take over certain functions in the development of common area (such as the construction and service of local roads, parks etc.). In fact, these enterprises will be the PPP, in which business may join, and share responsibilities.

The Limits Of Planning

Map of municipal entities on the territory of Moscow and Moscow Region. Color indicates a possible area of the Moscow metropolitan area.

THE ME TRO PO LITAN CO UNCI L Proposal With the growth of the city and the distance from the centre, the hierarchical relationships of administrative controls will inevitably weaken. Ultimately, to provide effective policy framework they should be replaced by cooperation and agglomeration ties based on the principle of federalism and intercommunality, in which are participating numerous of urban entities across the entire region. Summing up, in Moscow and Moscow region have already established the prerequisites for creating a full-fledged Metropolis based on partnership and shared interests. Despite there is no legal definition of “Metropolitan area” or “agglomeration” in Russian legislation, there is certain legal basis that allows to build it up in case of Moscow: 1) Joint Board of the executive bodies of state power of Moscow and Moscow Region – on regional level; 2) Federal law “about local self-governments” providing intercommunality. Hence, on the territory of the Moscow Megacity regional and municipal entities can create a joint body called “Metropolitan Council”. It consists of two levels: 1) Regional Council - consisting of the same composition as the “Joint Board of the executive bodies of state power of Moscow and Moscow Region”, implementing joint policies on a regional level;

2) Municipal Council - consisting of municipalities of Moscow and Moscow region, i.e. mayors of cities and heads of settlements, implementing governance on the municipal territories. Municipalities from the Moscow and Moscow Oblast join together on a voluntary basis for the conduct of joint activities and issues of local significance, co-manage services and to implement joint economic activities on the territory which forms the Metropolitan area. Financing the budget of the Metropolitan Council comes from municipal and regional budgets, also transferred part of the local and regional taxes. Municipalities with the approval of Regional Council can provide common planning policy, services and collect of local taxes on the territory of Metropolitan area. The main advantage of the Metropolitan Council is that it removes the contradiction on the borders between two different subjects of the Russian Federation. So, it is possible to create a joint government system, that allows solving problems of development, attracting investment without violating the interests of the residents and avoiding such conflicts, as occurred in Shcherbinka, and especially in the Khimki forest.

Welcome to Moscow The mid-day ride from the airport is long, Moscow’s infamous traffic jams trapping us in a spiral crawl towards the center. The small taxi carries me and Carlos, Dan, our enthusiastic local guide, the portly driver, almost toothless, looking a decade older than his likely middle age and as much luggage as our flight from New York would allow. As we slide into the side streets of the city center leading to our new home, our car confronts a larger, sleeker black vehicle, approaching from the opposite direction. There is some confusion about who has the right of way in the narrow street. The cars cannot pass each other, and yet the larger car continues to approach, rain trickling down its tinted windshield. Our driver stops with a shrug, refusing to budge. Three men exit the car approaching our taxi in ‘>’ formation. They have wide faces, laced with menace of a natural kind—a set of jaw and brow impossible to gain without a deep experience of violence. The leader, dressed all in black walks to our driver’s window. He is holding a large gun, a sawed-off shotgun, butt-end up, with the barrel partly covered in a black fabric sheath. A few quiet words are exchanged, and our car begins to back slowly out of the block, followed closely on foot by one of the gunman’s colleagues who locks eyes with our driver, waving us back with languid flicks of his wrist. In this moment I am very quiet. Dan is quiet and as Carlos moves to speak, Oh my God, did you see--, I silence him. There is nothing to say.

Krizis Lunch in the mezzanine gallery of a bar long past its prime, free to rest in its memories of the wild nineteen nighties: Rubenâ&#x20AC;&#x2122;s hand elegantly holding a cigarette, his upturned chin pointing away from the table to exhale, as he speaks to us out of the side of his mouth. He tells the story of a scar on his leg, a mark of an attack only narrowly survived. At fifteen this architectâ&#x20AC;&#x2122;s son is beaten and stabbed on a walk with a friend through his own neighborhood by two men: one recently released from prison and the other, a veteran of the Chechen war. The men do not rob the boys, and only this small indentation in his leg remains. It is hard to see this scar, so I look at the smoke escaping his lips, as he smoothes his impeccable sweater. Life in Moscow is fragile, I say in my imitation Russian accent: I feel myself here very close to death. Ruben laughs and nods.

We Were There Walking with Kiril through the backyards and side streets of the center city. We slip into cuts in the pavement, through arches and tunnels, and we are momentarily shrouded in darkness. All we can hear are our own footfalls. In the light again there are children in playgrounds, teenagers laughing and flirting, motionless cats occupying the pathways between patches of garden grass and dilapidated garages, a sympathetic traffic of people and animals rarely found in the big avenues and boulevards of this megalomaniacal city. Kiril shows me shortcuts and secret passageways. He is teaching me to walk through walls, a skill true Muscovites use to keep from being swallowed by the endless expanses of the main roads. In our simple movements we are opening another city, The city’s true face, Kiril says. The city’s true face is modest, full of crags and dimples, inexplicable scars. The city’s true face ages gracefully, is soft and yielding, in contrast with the hard shoulder presented by its impassive boulevards. At times we meet dead ends, arbitrary gates and fences, blocking free passage, asserting a dubious ownership of the yards and paths Kiril has walked his entire life.

The Architecture of My Soul My friend Denis walks with a slouch in Old Arbat. After a night of dancing & drinking, the dawn has come and gone & our shadows stretch out before us in the quiet street. He points out the site of the hospital where he was born, now a restaurant, the side street filled with graffiti honoring Viktor Tsoi, a perestroika rock legend who died in the early 1990s. We pass a small square where 5 or 6 people have set up camp at the base of a monument. Ah, our Occupy Moscow, Denis says with a chuckle. They are protesting Putin. After a brief stop for ice cream & coffee at the 24hour McDonaldâ&#x20AC;&#x2122;s, we enter the wide boulevard called the Golden Ring. Denis points up the ring to the curve in the road. I shade my eyes from the sun. He remembers the wild procession, which filled the boulevard in 1991. Denis was 16 or 17 years old, flinging rocks at the tanks trying to retake the countryâ&#x20AC;&#x2122;s democracy. It is the last time he can recall this street filled with people on foot, moving together. At his home he shows me pictures of a young child sitting on a sandy beach, squinting up into the camera. Angola, he says. I grew up in Angola, Congo, Sao Tome & Principe. He tells stories of Soviet soldiers and African revolutionaries in former Portuguese colonies, of speaking unwritten languages he has since forgotten. I urge him to write his stories. You have to make something. Denis looks confused and a bit irritated. But I am telling you, and you understand me and that is enough. This is the architecture of my soul.

An Ordinary Fear The line stretches from the gates of the Pushkin Museum down Prechistenka Street through small mountain ranges of snow, the peaks darkened with garbage and car exhaust. It is one hour before the museum opens and Taras and I are waiting to see a special exhibit of Caravaggio’s paintings. We are flanked by elderly women, babushkas whose wrapped heads & stoic faces display an intimate knowledge of unfulfilled expectation. I shudder with the icy wind and Taras asks one of the women to hold our place in line. We cross the road to wait out the hour in a cafe. Wild curls fly around Taras’ face when he takes off his cap. To meet me this morning, he traveled for an hour and a half from his home in a small settlement on the edge of a forest at the northern border of Moscow. The settlement is built around a reservoir that pipes fresh water through the forest into the city center. He lives with his mother, father & sister in the cottagestyle home where he was raised and his mother grew up. The family has lived in this home since the end of World War 11. Cupping his tea in his hands, Taras tells me about a recent meeting of the local homeowner’s association. Rumors are circulating that the municipality plans to appropriate the settlement’s land to construct new urban developments in the dreaded microrayon style. Taras is discouraged about the possibility of preventing the destruction of his house. People want to save their homes but government never thinks about us, just their aims. We need to be more organized, more concentrated on our own aim. This is very difficult for Russian people. We feel barriers to being together in society. When you speak with somebody, you feel he understands you and you, him. But when there is a group more than 3, no one agrees. Taras stops here, taps the table. Let me show you, he says, taking my pen and notebook. He draws a map of his small settlement, the railroad tracks leading from the center of the city form a border between the town and the forest. On the other side of the settlement is the big highway that circles the city and forms the border between Moscow and the surrounding region. To the north of the town, Taras draws a fence, indicating the restricted zone of the reservoir and water treatment plant that is the settlement’s main employer & raison d’etre. Fenced on three sides, the settlement faces the looming towers of expanding Moscow. Of course the city will eat our homes, he says. There is nowhere else to go.

Stas’ Apartment Moscow is a tentacular city. Spreading out from the Kremlin in rings which have gobbled up the surrounding countryside for hundred of years, the city reaches in all directions to form a vaguely circular mass. On paper, it resembles a large potato, its surface complete with small dents and dubious protrusions. One such pocket in the city’s Northeast district is home to my friend Stas. To get to Stas I take a zigzagging route from the center of the city. I travel by metro, changing twice, then by taxi or electrichka (suburban train) or mashrutka (semi-legal minibus). The trip takes between 1.5 and 2 hours each way. Luckily for Stas, he works as a physical education teacher in the local school and, unlike many who live in this district, is spared from making the daily commute to the center. Stas lives in a microrayon. Microrayons are giant semipublic housing projects that weave through Moscow, in which most of the city’s residents live. The clusters are remnants of the Soviet era, cheaply built, each a micro-city all its own, made to house 10-16,000 people at once. The buildings are large and, to outsiders, seem impersonal and impenetrable. Common areas appear barely used, quiet even on temperate afternoons. The hallways tend to be poorly maintained, often smelling of garbage or urine. Despite impersonal and neglected surroundings, the apartments’ interiors are often well-appointed, lovingly decorated by residents to reflect the individuality of each family. Stas lives with his wife Natasha and his childhood friend, Bush. Bush is a painter and has decorated his bedroom, which also serves as the living room and Stas’ music studio, in a style reminiscent of both an Indian temple and the chillout tent at a 1990s outdoor rave. The space is psychedelic and warm, a riot of deep colors, punctuated by reflecting surfaces created by gluing compact discs to the walls and ceilings, and coins to the cabinets. The room’s effect, of perpetual sunrise after a night of partying in Goa, denies the uniformity of the massive beige towers lining the grey skies of the microrayon, all that is visible through the open windows.

The Lighthouse Cindy is a New Yorker. Tenacious and fearless, she travels the new republics of the former Soviet Union searching for traces of the empire that is no more. She is here in Moscow to cover this year’s election and the unprecedented “meetings” that surround it. Never before in the era of Vladimir Putin have these many citizens entered the streets to demand change in their government. We are having wine at Mayak. Decorated like a cross between a Parisian cafe and a 19th century aristocrat’s home library, this is a popular destination for expats and Russian intelligentsia alike. Cindy rubs the place on her arm that is bruised from yesterday’s encounter with the Moscow police force near the Kremlin. I was with the other members of the press in a cordoned-off area in front of the fountain. All of a sudden I felt everyone moving back. I had my camera out in front of me and behind me was a five or six foot drop into the bottom of the fountain. I tried to get out of there, but the police had us surrounded on all sides. They were hitting us, and I bent over to protect my camera. Next thing you know I’m on the ground. There’s a big boot on my leg, crushing it, crushing my shin, my knee. I start to beg, and speak loudly in English. Please let me go, please let me go. They’re throwing the others into the back of the police van. I think they figured me for an American, which is not always the case here. Cindy smiles, and takes a sip of her wine before continuing. Usually they think I’m a migrant, someone from Siberia maybe.

Fucking Nigger Walking at sunset along the bustling avenue, I hear it: FUCKING NIGGER! FUCKING NIGGER sails up above the sinewy beats pumping into my ears through my headphones. I take a few steps forward, stop and turn around. A young couple passes me head-on and continues walking. The young man wears sweatpants and trainers, his companion in tight jeans and colorful windbreaker, her blond hair pulled into a tight ponytail. I take my headphones off. Iâ&#x20AC;&#x2122;m sorry did you say something to me? Yes, she said, You are a fucking nigger. She is smiling and facing me. Her friend chuckles, resting his arm on her shoulder. Why would you say that, I ask, mirroring her smile. Now I am more curious than shocked. Because: You. Are. A. Fuck-ing. Nigger. The clarity of her enunciation, the unusual confidence of her Russian-accented English, the irony of these dreaded American words floating down a Russian street, headed right for me, set me laughing. This is somehow more absurd than the usual sidewalk taunts, monkey noises, jungle sounds as I pass in the street. Catching my breath, through giggles comes my retort: Well, then, that settles it. You. Are. A. Fuck-ing. Bitch. I turn and, with a wave, continue on down the street. The young man restrains her. Over my shoulder I glimpse her face as she lunges.

The first man who, having fenced in a piece of land, said “This is mine,” and found people naive enough to believe him, that man was the true founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody. --Jean-Jacques Rousseau Discourse on Inequality, 1754

Keyword #0: COMMUNITY This word has no easy and accurate translation in colloquial Russian. In English, community has several meanings. At the root of these interpretations are shared places & interests, history & heritage, fellowship and amity. The community is that civic body to which all potentially belong. It is a common quality or state-—life lived in association with others-—of being tied to a group of people, for better or worse. These ties give one the right to use the land or waters of another. With the community come “the commons,” a sense of freedom attached to responsibility, each one for the other. The community is both an ideal and a daily practice. In successful movements to change cities by the residents, there is always the presence of a strong sense of community: people recognize that they are connected, sharing spaces and histories and come together on that basis, not just in response to threat from outside. In other words, people know their neighbors and engage in ordinary daily actions, recognizing that they are together, attached to each other in this particular time and place.

Институт медиa, aрхитектуры и дизaйнa «Стрелкa» Берсеневскaя нaб., 14, стр. 5А Москвa, 119072, Россия www.strelka.com

Strelka Institute for Media, Architecture and Design 14, bldg. 5A, Bersenevskaya Emb. Moscow, 119072, Russia www.strelka.com