Since the housing stock in Russia is still predominately State-owned, reform of the State rental sector is fundamental to the transformation of the housing sector in general. Officials in the city of Moscow recognized this and, in March 1992, signed an agreement with the U.S. Agency for International Development for a demonstration project for private maintenance of municipal units as part of a larger reform program. In March 1993, 2000 municipal units in packages of about 650 units were placed under contracts for maintenance with three private firms. Another 5000 units were placed under contract in September 1993. This paper presents the results of the evaluation of the effectiveness of this program. Results from the "before and after" analysis show a substantial, overall improvement in maintenance. Also, the private firms generally did a better job in setting a concrete time for making repairs than the State firms (REUs), and they did a better job of keeping their promises. Finally, our analysis shows that the private firms are not costing the city more than the REU would cost to handle equivalent tasks. On the other hand, the demonstration has had problems of poor performance monitoring and late payments by the municipal agencies who have these responsibilities. These problems could threaten the program's success.
"Private Maintenance for Moscow's Housing Stock: Does it Work?" by Karen Angelici, Raymond J. Struyk, Maria V. Tikhomarova, from Journal of Housing Economics, Volume 4, 50-70, copyright 1995, Elsevier Science (USA).
Abstract printed with permission.
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