5 September 2024
The Arctic
is a region of strategic importance for Russia. However, it currently suffers
from an acute shortage of high-quality housing. Deteriorating infrastructure, underinvestment
in science, a lack of new technologies, and a shortage of organizations willing
to work in extreme conditions are all hindering housing construction. A
comprehensive set of support measures is needed to revive the construction
industry in the Arctic, and there also needs to be increased investment in
science and new construction technologies. That was the conclusion reached at a
session entitled Prospects for the Development of Housing Construction in the
Arctic, which took place as part of the Eastern Economic Forum (EEF).
KEY
CONCLUSIONS
The
Arctic is a strategic interest of the Russian state
“The
Arctic is a strategic interest of the Russian state. It is an economic issue of
security. To develop and maintain the Arctic, people are needed. <...>
And for people to come, the requisite conditions need to be put in place,”
Alexander Levintal, Managing Director for the Far East, DOM.RF.
“When
we talk about why we need the Arctic, the numbers speak for themselves: 1.5% of
Russia’s population [living in the Arctic – ed.] produce 10% of the
GDP,” Andrey Grachev, Vice President for Federal and Regional Programmes,
Norilsk Nickel.
To
develop the Arctic, improvements must be made to infrastructure and people’s
quality of life
“There
are several unresolved issues that have accumulated with regards the housing
that already exists, utilities, and so on. However..., step by step, we will
resolve them using funds from all levels of the budget, as well as from other
sources. <...> In addition, there are national project programmes in
place for improving public spaces, building a comfortable urban environment,
and modernizing utility infrastructure. That is because the main aspect is the
utility networks that need to be built. <...> The Ministry of Construction’s
priorities include attaining positive migration, improving people’s quality of
life, and attracting specialists by putting the necessary infrastructure in
place. This is all with the view to ensuring development in the Arctic,” Nikita
Stasishin, Deputy Minister of Construction, Housing and Utilities of the
Russian Federation.
New
construction technologies and state support for developers are needed to
address the housing issue
“Demand
for housing in the Arctic is growing. Therefore, new solutions, new
construction technologies, and state support for developers willing to work in
Arctic conditions are all required. In this regard, we are on the same page as
the government,” Andrey Grachev, Vice President for Federal and Regional
Programmes, Norilsk Nickel.
“The
key question I would raise is... whether we need to build everywhere... on a
scale we would like, and whether we can afford it. <...> I doubt we have
enough [resources – ed.] to be able to offer the same living standards
as in large cities. <...> We need to invest primarily in new technologies
and to increase these investments,” Pavel Volkov, State Secretary – Deputy
Minister for the Development of the Russian Far East and the Arctic.
PROBLEMS
A lack
of high-quality housing in the Arctic, including for young specialists
“If
we look at the Strategy for the Development of the Russian Arctic, we will see
that the low availability of decent housing is listed among the main threats to
national security in the Arctic,” Andrey Grachev, Vice President for Federal
and Regional Programmes, Norilsk Nickel.
“There
is enormous demand for higher-quality housing. People in Murmansk, for example,
earn money... but look south when buying property – to St. Petersburg or
Moscow, for example. They invest elsewhere because they cannot purchase
anything in Murmansk. <...> There is pent-up demand,
and for us, that is a challenge,” Aleksandr Prygunkov, Managing Partner,
Samolet Group of Companies.
“The
Arctic is now... a priority. We need to have young specialists moving there...
They should be offered high-quality services across all areas, including
high-quality housing,” Nikita Stasishin, Deputy Minister of Construction,
Housing and Utilities of the Russian Federation.
A
shortage of personnel and new technologies in residential construction
“When
virtually nothing is built for 30 years, the personnel are not there. That is a
fact. Therefore, any team we assemble there includes technical staff and
management personnel who are local. However, the workers will mostly be brought
in from outside,” Aleksandr Prygunkov, Managing Partner, Samolet Group of Companies.
“We
really did once have the best institutes for urban planning, construction
technologies, and research in humanitarian areas such as human health and other
aspects. <...> These need to be revived. We must piece things back
together from what remains,” Natalya Trunova, Auditor, Accounts Chamber of the
Russian Federation.
“Our
investment in science is non-existent. <...> We are now reaping the
consequences of having virtually nothing new in this environment. That’s why we still [build – ed.]
concrete apartment buildings there,” Pavel Volkov, State Secretary – Deputy
Minister for the Development of the Russian Far East and the Arctic.
The
expense and difficulty involved in housing construction due to challenging
climatic and geographic conditions
“The
challenges surrounding construction are well-known. These primarily relate to
technological aspects, limited timeframes for delivering building materials...
and the need for significant financial investment. <...> There is a
shortage of construction companies capable of working in the harsh conditions
of the Arctic, and there are difficulties in conducting tenders, as well as
challenges in meeting construction requirements. On top of this, there are the
weather conditions... Contractors lose an average of 20% of time due to
blizzards and snowdrifts,” Andrey Grachev, Vice President for Federal and
Regional Programmes, Norilsk Nickel.
SOLUTIONS
Investing
in modernizing the utilities infrastructure
“Consider
the city of Murmansk. <...> It was very difficult to attract developers
to enter its market and build housing not as part of programmes for relocating
people from dilapidated housing or... providing housing for certain categories
of citizens, but as an investment in and of itself. Finally, a developer has
emerged thanks to the allocation of funds for modernizing the utilities
infrastructure and building social facilities in these regions,” Nikita
Stasishin, Deputy Minister of Construction, Housing and Utilities of the
Russian Federation.
Leveraging
the Arctic mortgage programme to drive demand for housing and stimulate the
market
“Housing
construction has started to revive, particularly since the end of 2023 and into
2024... The number of apartment buildings under construction increased by
30%... compared to the first seven months of last year, with new project
launches up by around 25%. <...> The Arctic mortgage programme was
launched at the end of 2023... and it is acting as an excellent driver for new
projects. <...> Demand is picking up, and the supply will follow,”
Alexander Levintal, Managing Director for the Far East, DOM.RF.
“Arctic
mortgages have now entered the lexicon, and are known for offering the best
terms. They offer a huge incentive to invest in housing. Currently, there are
3,800 mortgages worth over RUB 120 billion. We also have the Far Eastern
Arctic Quarter in places with advanced special economic zones. This is an
initiative aiming to facilitate the construction of supply infrastructure.
<...> And of course, rental housing is another tool to boost housing
construction,” Pavel Volkov, State Secretary – Deputy Minister for the
Development of the Russian Far East and the Arctic.
Developing
human resources for the construction industry
“We
have taken on Murmansk Construction College, and invested in refurbishing the
facilities to make it a better place for young people to study. That is because
we appreciate that unless we have a new generation coming through in the
construction sector, things will be quite difficult, and in any case, we must
foster the growth of the sector,” Aleksandr Prygunkov, Managing Partner,
Samolet Group of Companies.
Making
greater use of infrastructure bonds
“Infrastructure
bonds are... a very effective [tool – ed.] in the Infrastructure Menu.
[…] In the Arctic, only one region is currently using them. This is not
remotely sufficient. They offer an option when there is a budget deficit –
infrastructure bonds can be used to address issues,” Alexander Levintal,
Managing Director for the Far East, DOM.RF.
Monitoring
the thawing of permafrost and conducting checks on the condition of buildings
and structures
“The
Arctic is warming three times faster than the rest of the continent. Permafrost
thaw can lead to incidents… Therefore, at present, about 1,000 buildings and
structures in the region are being fully monitored by the company’s system… and
we will very soon extend monitoring to 1,500 sites, including residential
buildings and structures. We have established a rapid response system, and have
learned how to strengthen the foundations of buildings,” Andrey Grachev, Vice
President for Federal and Regional Programmes, Norilsk Nickel.
* This is a
translation of material that was originally generated in Russian using
artificial intelligence.
For more
information, visit the Roscongress Foundation’s Information and Analytical
System at roscongress.org/en