Management of Our Land Resources Is A Loser Task

How can we even consider any land policy if since 2004 there has been no government body in this country whose functions included managing land resources?!
Since 1992, the Committee for Land Reform and Land Resource has changed both its name and functions seven times. In the course of one of the reorganizations in 2004, that particular function disappeared. From the point of view of managing the entire process, such an outcome has been quire predictable: who can actually do it if nobody is allotted that task? At present, the Federal Service for State Registration, Cadastre and Cartography (Rosreestr) is vested with a set of technical tasks, but is not endowed with the function of managing the available land resources. This situation manifests itself in the absence of a general land policy.

Much has been said to the effect that land ought to generate income and be utilized efficiently. However, everybody has their own ideas of land utilization efficiency. For the local government it may be feasible to let somebody farm on fertile land and receive in return Rb 50 per hectare for the local budget without any further headache. For somebody else it would be more feasible to disregard land fertility and to use the same plots for housing development projects, while getting some illegal incomes from the issuance of the relevant permits and at the same time generating large amounts of taxes for the local budget. What will be more cost-effective: to keep the resource for a long-terms perspective, or to irrevocably lose it for agriculture but to generate more taxes and to spend more money on creating normal living standards for rural communities?

It is necessary to elaborate distinct definitions of land utilization efficiency. If we speak of lands utilization for construction projects, then a well-defined territory development policy must be mapped out, aiming at preserving fertile lands for agriculture and allotting only the less valuable lands for housing construction projects. The authorities cannot be allowed to reduce their role only to allotting certain plots of lands to construction projects, and taking no further interest in them. In such a case it may happen so that an individual will build a house on a plot of land only to find out at a later stage that nobody was going to bother about building a road from the settlement to which that house belongs to the nearest hospital or school. The responsibility to further develop such territories lies with the local authorities. Consequently, when giving an approval to the construction of new settlements, it must be well understood that the authorities will thereby assume some long-term obligations: since residence registration is allowed in a new settlement, it must be provided with amenities, access to schools, hospital, post offices, etc.


And there is another point. A discussion is currently under way concerning the issue of a switchover from land categories to zoning. And I feel very uneasy because no funding is allocated to the procedure of territory zoning. However proper zoning will require years of meticulous work. This approach seems to totally disregard all state interests - to abolish land categories without envisaging any expenditures associated with zoning of the territories situated between settlements! So far, the attempts to abolish land categories - and primarily with regard to lands designated for agricultural uses - can be viewed as attempts to remove all the protective mechanisms designed to preserve arable lands.

One can incessantly hear one and the same phrase: ‘To ease access to land'. But the core point here is not access to land generally, but access of citizens to plots of land.

Now the procedure for obtaining the right to implement a construction project on a certain territory is administrative, free-of-charge, and corrupt. He who has ordered and paid for the coordination of a plan for the construction of a settlement, he will later on sell the relevant plots to citizens, shifting onto them all the costs involved in the construction of roads and all the necessary facilities. The better a municipally owned plot is prepared for housing construction (the future construction of the pipelines is already properly coordinated, or - better still - they are already there), the more money will go to the budget. The value of land proper by no means represents the bulk of construction costs: according to my estimations, it constitutes only 13% of the total costs. The cost of construction of a simplest house amounts to 56%, the rest is taken up by the cost of facilities. Thus, the citizens bear not only the costs of building gas pipes inside houses or gas pipelines from the trunk line to individual houses, but also the construction of a main pipeline to a settlement or across a settlement. Only to mark a line on a blueprint from the road along which the main pipeline runs to an individual house will cost Rb 60,000. The same is true for the supply of electricity. It is initially declared that it will cost only Rb 500 to provide a house with electricity, but in reality the cost will ne Rb 165,000-170,000 per house in a given settlement.


So, even if we create appropriate conditions for easy access to land, an immediate onset of large-scale construction of affordable housing can hardly be expected. Such prospects can only be real if state or municipal plots of land are sold already complete with the necessary facilities and infrastructure. Or at least with properly coordinated documentation for the construction of facilities. It is necessary to involve municipalities in this process, so that they could derive income from their lands.


Besides, their incomes must be linked with the possibility to sell the right to implement construction projects in accordance with the established rules for land use and construction on privately owned lands or municipal plots that are subject to established construction rules. It is clear that lands without facilities and roads will cost nothing, and so the budgets will receive no revenues. The difference between the price of arable land when it is used for agriculture and its price when it is used for the construction of cottages is 1000-fold. And this money can really end up in local budgets. But so far, municipalities have been doing nothing, and so that money went into the pockets of those people who were responsible to the adoption of the formally free-of-charge administrative decisions concerning the granting of construction permits.


If a municipality develops a scheme for preparing state-owned or municipal plots of land for sale, the benefit will be tremendous. But this can be possible only after zoning of the unpopulated territories, when appropriate territories for implementing construction projects on lands that are least valuable for agricultural uses are selected, and the possibility of selling the right for construction on private land plots in accordance with well-defined rules is established; or state-owned plots of land can be sold with designating the permitted land uses and construction rules.


N. I. Shagaida - Doctor of Economic Sciences, Head of the Agricultural Policy Department