Land in transition

04.06.2013 — Analysis

On May 18, 2013 in Ekaterinburg, quietly and almost unnoticed, a revolution came to an end.

For the first time in many years, the regional Ministry of State Property Management assumed responsibility for allocating land in the city for construction on unlocated lots. The mayor's office, which had previously distributed the land among developers, is not happy about this and continues to threaten an apocalypse.

The roots of the conflict

Unlocated territories are those to which ownership rights have not been issued either to private individuals or to state organizations. Forty percent of the land in Ekaterinburg falls under this category! Under federal law, these plots of land are under the domain of regional authorities. But an agreement concluded between the mayor's office and the regional authorities on May 17, 2005 handed over that control to the administrative authorities of the capital of the Urals. Since then, the "gray house" has accepted applications and issued the packages of necessary documents, which are then passed on for approval to the Sverdlovsk Regional Ministry of State Property Management (MUGISO). Regional officials verify that the papers are in compliance with legal regulations and give the "green light" if everything is in order.

It was originally assumed that this method would simplify the procedure, because the same official in the mayor's office could simultaneously both approve the plot of land itself as well as issue the relevant construction permits. But in fact, the ministry claims that this scheme resulted in many rejects in the documents being prepared at the mayor's office. Due to various inaccuracies and legal errors (one wonders if those were accidental or intentional) up to 40% of applications had to be given back to be completed, which dragged out the approval process for many months.

"The last straw" for the regional government came over the allocation of land for the construction of housing for large families. This is part of a federal program announced by Russian President Vladimir Putin and its implementation is being closely watched by the Kremlin. And a problem arose in Ekaterinburg

"Of the more than 13,000 potential beneficiaries who have submitted applications in the last two years or so, only about three hundred have received land ... Can that be considered normal? Probably not ..." claimed Alexsei Pyankov, the head of MUGISO, in one of his interviews. In addition, he particularly emphasized the fact that since early 2013, such plots of land had not been allocated at all by the mayor's office and there weren't even any plans to do so!

The columnist for RusBusinessNews has discovered that MUGISO got into a lot of trouble with Moscow at the beginning of the year over this issue - the city's sabotage of the federal program to develop social programs. After that, the regional government decided to once again take over control of the land.

Floors of reconstruction

The news was announced back in April that MUGISO was refusing to renew the land agreement as planned. And this immediately provoked a strong backlash from the city's administrators. All at once everything was in motion - from the frenzied release of a flood of panicky statements and press releases to every conceivable type of PR event. Ekaterinburg was introduced to the concept of the "land pie", which was concocted by unidentified supporters of the city's administrators as a sign of protest against the intentions of the regional officials. Another example was seen when retirees marched to the "white house" with their buckets, confident that the governor wanted to take away their garden plots. They had been sent out to protest in the rain without being given a clear explanation of what they supposed to be opposing.

The mayor's office even managed to meddle in the work of the Sverdlovsk region's Legislative Assembly. At their regular meeting on April 23, the deputies were supposed to accept the amendments to the law returning unlocated lands to MUGISO's jurisdiction. But thanks to the efforts of the "city's" lawmakers, the relevant committee was simply unable to consider them and the question was postponed for a month. As a result, there arose a threat that in two weeks' time the disputed territories might be left abandoned. But this was avoided when the regional government issued a decree that made it possible to evade the crisis.

"According to the federal law, the highest executive body of a constituent entity holds the authority to manage unlocated land, which, in this case is the government of the Sverdlovsk region unless otherwise specified. We have not specified otherwise, and thus all legal authority on this issue has at present been given to the government. We have delegated it to MUGISO. No law is needed here and all the issues have already been resolved," commented the regional prime minister, Denis Pasler, speaking to the press about the decision.

And on May 16 the heads of several major construction companies, including RENOVA-Stroy-Group, Atomstroykompleks, and UMMC-Holding, stabbed the mayor's office in the back, claiming that this change in the rules in the market for land would make it possible to undo years of corrupt practices in Ekaterinburg that were largely responsible for the high cost of housing.

The last day of the eight-year-old agreement's validity was marked by the opening of the first of MUGISO's seven planned front offices, located across from the city administration building, and it is now these offices and not city hall that will accept applications from the public regarding the allocation of land. They didn’t pull any punches when choosing the premises, ensuring that at any time the number of employees working there can be increased from five to ten.

Finally, last week a number of agreements were concluded between MUGISO and the various departments, which now make it possible for the procedure of registering land plots to be shortened and simplified. One day soon it will be possible to go to the state services website and get a copy of a statement issued from the real-estate registry and unified state registry – the whole procedure will soon take only a few minutes, not five days, as before.

A farewell to arms?

MUGISO assured RusBusinessNews that work will continue to optimize and improve the transparency of the procedure. Previously, these matters were under the jurisdiction of the mayor's office, which was in no rush to work more efficiently. Now the ministry has been given a free hand.

But the administrators of Ekaterinburg have not yet "laid down their arms". They are still responsible for issuing on-site construction permits and for approving the projects themselves. Which means that opportunities for sabotage remain.

"We cannot answer for the work of our colleagues at the city," stated Alexsei Pyankov when the front office opened. But he promised that his department would closely monitor all such cases.

Those wishing to obtain land had previously encountered all kinds of confusion in the work of the city administrators. In particular, the high percentage of rejects that occurred when officials issued paperwork has already been mentioned. But if previously the applicants had found themselves going it alone against the "gray house" in these situations, now MUGISO is committed to protecting their interests - not least because the department has to prove its ability to cope with the land mess after being assailed with a whirlwind of criticism from the trenches of the mayor's office.

Igor Chukreev