Investigation

Is your apartment building about to be torn down?

If you live in one of the buildings pictured in this article, you might be in for an unpleasant surprise — new local government laws allow the city to destroy buildings that are deemed to be “unsafe.” If, like many foreigners, you have bought an apartment in the centre of Moscow, you might very well be in one of these buildings and not know about it. The laws say that you must be re-housed, in the same area, BUT it does not apply if you live in the centre; these residents will be offered a replacement apartment in the outskirts of Moscow, or, we now learn, a compensation package so small that it would not allow you to purchase a similar apartment in your area.

A number of foreigners have already found out that they are living in buildings slated for demolition. How they found out, and what has happened since, is not a happy story.

The Background to the New Law on Demolition

15/14 3rd Tverskaya-Yamskaya Ul., Bldg.1

City Law # 876 of 24.10.1995 initiated the process of demolishing old 5-storey buildings from the Brezhnev era in order to either thoroughly reconstruct them or replace them with new ones. This process has been accelerating since 2002 when new ordinances from Moscow city hall initiated two further programmes for much more demolition and reconstruction to be carried out by 2005 and 2010.

Nobody disagrees that there are many unsafe Soviet-era buildings that were thrown up in the ‘sleeping’ regions of Moscow. But the demolition of old buildings in the centre of Moscow is much more problematic. Are they really unsafe? Could it be that the pulling down of old buildings inside the Ring is connected with the rapidly increasing rise in the price of real estate in downtown Moscow?

The situation is confusing for Russians; for foreigners it is a jungle of conflicting opinions. There have been a number of laws and ordinances passed by the city council and the federal government which supposedly help ‘guarantee’ owners’ property rights, but buildings are still being demolished.

A new tax law also makes it more expensive to live in the centre, which no doubt will  help to convince even more babushkas and poor families that they are better off getting out of the centre as soon as they can. More than two thousand buildings have now been put on the list for demolition – not just buildings from the Stalin and Brezhnev era, but also nineteenth-century buildings. The ‘hit list’ now includes even landmark properties on Tverskaya.

The Decision-Making Process

A Moscow city commission determines the condition of each building. It gives its conclusions based on the findings of a technical evaluation. The commission looks at the  outside structure and geology, as well as the internal infrastructure (pipelines, lifts, etc). Based upon these criteria, the commission attributes a percentage rate to the condition of the building. If that percentage is above a certain figure, the building is deemed unsafe and unsuitable for living. This is a key point as the protection of landlords is dependent upon what is in the technical evaluation.

If the commission decides to destroy a building, then there are three options for you as a resident:

Your building has been condemned, what then?

Property 8 Sadovaya-Karetnaya Ul., Bldg.5

Option 1: You can be given an equivalent apartment in the same Район (neighborhood) as the one where you are living now, except that if you live in the Central District you will not be re-housed in the centre; you can be moved to a district anywhere within the Moscow city region.

Another key question is what constitutes an “equivalent” apartment; the determining parameters are not only location, but also amenities, the floor area, etc. For many Russian families who have been living for a long time in their building, the law might work to their advantage, as it determines the living and health standards in terms of the current minimum number of square meters per person and per family. These standards have been rising over the years; a married couple who used to live in a 31 square metre apartment will now be offered at least 42 square metres. Of course this might not work for a foreigner who has spent a fortune on repairing his apartment; the cost of these repairs is not included in the calculations.

Option 2: You may be offered monetary compensation. There have been many complaints in the press that the price offered for your apartment is ridiculous compared to the real value of the property. However, this situation has improved somewhat, now that  independent auditors have been brought in to the process. The city will suggest its own auditor, but you have the option to get a second opinion.

Option 3: You may re-invest the monetary compensation that you are being offered, back into the new building that is being built in the location of your old one. The point to note here is that if you are living in a two-room apartment and wish to purchase a three-room apartment, you will pay the difference in price not at market value but only at cost. This might be a good real estate investment.

29 Ulitsa Pokrovka

23/10 Ul. Petrovka, Bldg.4

I went out to investigate one of the buildings on the list of condemned properties. 29 Ulitsa Pokrovka is close to Metro Chistiye Prudy, a fashionable area. From the outside the building does not look at all bad, much like all the other buildings on the street. In the courtyard I counted three new Mercedes, a new BMW and a Land Cruiser. There were new window frames in most of these apartments. Why would the city commission want to condemn this particular building?

I knocked on some doors, and said that I was writing an article about condemned buildings. Some people just shut the door, others said that they didn’t know anything, but then I struck lucky, and an elderly couple said that I should try the lady upstairs who was running the Residents’ Association.

Valeria Gorbova opened the door, and when I explained that I was writing an article about dangerous buildings she immediately said “It’s not a dangerous building; that’s what they say, but it isn’t true. You’d better come in.” Over coffee and cakes, Valeria gave me as much detail as I needed.

Most people, she said, had found out only after one of the neighbours had told them. Valeria herself had found out by chance four years ago that she was to be relocated to another part of the city, when one of the other residents who works in Moscow City Hall, herself was told by a colleague about the list of condemned buildings.

“It was a secret. They didn’t want anybody to know. Can you imagine a similar situation in Madrid or Paris? Finding out only by chance and not even receiving an official letter from the city.”

I asked why was it such a secret?

Property 5 Maly Karetny Per., Bldg.1

“That isn’t a secret. The real estate developer who buys this building will replace it with a building fifteen or twenty stories high. That’s a lot more apartments selling at a lot more money. The city also gets its share of the pie, as the developers have to give back on average twenty to thirty percent of the apartments in the new building to the city. So the city gets more apartments than it had in the old building, and at a higher quality and with a much higher value.”

Perhaps your building really is in danger I asked?

“Nonsense! Look, I bought this apartment when there were seven families living in it. They moved out quite happily. They each bought private, separate apartments in the outskirts of Moscow, and said goodbye to communal life. I remodelled the apartment so that it looks very much like it did before the revolution. And I am not the only one in this building who did this; there are Italians, Canadians and French people also living in this building. And it’s the foreigners shouting the loudest.”

“But I don’t understand why it’s your building they want to knock down and not, say, the one next door?”

“Yes, that’s what we’d also like to know,” said Valeria. “At least four separate city bodies participate in the decision-making process. Only after all of these bodies have looked at the documents does the city government decide if a building is to be put on the demolition list. All of these stages can happen without the knowledge of the residents, even though this is against the law which is called, if I remember, “On the Protection of Citizens’ Rights for the Implementation of Urban Development Solutions in Moscow City”. We had to pay money to somebody in City Hall just to get a copy of the documents. When we read what was in them we couldn’t believe it. It was written that the engineers had dug into the foundations and judged them unsafe. Supposedly they had performed analysis in eight different spots of the building, which is a very loud process, but none of the residents ever heard or noticed anything. That was when we
organised ourselves into a Resident’s Association. We meet once a month, or as often as is necessary.”

16 Sadovaya-Triumfalnaya Ul., Bldg.2

It is this Resident’s Association that has been the key to the residents’ success in resisting expropriation for the last four years. The first thing that they did was to commission their own structural survey. The survey said that yes, the building is old and does need restoration work, but that it should be able to stand for at least another hundred years.

Armed with this survey, the residents are now suing the Moscow city government in the Court of Arbitration. The judge has already agreed to their request to get yet another independent survey.

So what is next for the residents of 29 Ulitsa Pokrovka? Besides awaiting the results of the new, second independent survey, a new federal law is working in their favour: it states that if fifty-one percent of apartment owners in one building are organised in an association, they have the right to own the land and the walls. This might sound unusual to a foreigner, but it will be a key point in the suit that the Pokrova residents are pursuing, because until now local city law stated that the private residents of a building only owned the “air” within their apartment, and not the walls or the land. In the meantime, however, the Prokrovka residents, just like everybody else whose building is on the condemned list, cannot sell or rent their apartments; each family is really living on standby.

This is what upsets Valeria Gorbova, and everybody else in her situation. Before she bought her apartment, Valeria received a document from the local council confirming that her building would not be destroyed in the foreseeable future. The new laws on demolition, however, override this confirmation document.

What should you do if your building has been condemned?

31-1 Gogolevsky Bulvar

We have gathered information from a lot of sources and the same answer came back over and over: the best thing to do is to fight back. And team up to fight! Most likely, if you organize yourselves in a group, the chances are the building won’t be torn down in the end, and the developers will look for another property, where the residents will be more easily convinced. If you are a property developer eyeing up a building, you will think very carefully about who is living in it; a building occupied by foreigners who might fight back is not as attractive a proposition as a building full of old people – a city official will  tell them that they have to move.

Do you need a lawyer?

If your building is on the demolition list, yes, you need a lawyer. Your legal counsel will know that there is a contradiction between article 239-AR of the Russian Federal Civil Code which protects owners’ property rights, and the recent local legislation. There have been a number of lawsuits on this issue and owners have been successful in some cases. In one instance, a judge ruled recently that the local government’s decision to tear down the building at 8, Piatniskaya Street, was not a good enough reason to expropriate and expel people from their apartment. Your lawyer will also check if the technical appraisal followed the appropriate procedure. There are cases, for example, where judges have refused city projects when the final purpose wasn’t for housing but for office space.

We think that in practice, most expulsions of residents happen because citizens are not informed enough and not organised in a group to fight for their rights. You can keep up to date with the list of the buildings that are marked for destruction simply by going to http://orsn.rambler.ru/content/info.

Some Good News

29 Ul. Pokrovka

The main thing to remember besides keeping yourself informed is that there is always hope for a positive outcome, as long as you fight for your rights and don’t take everything that is said to you at face value. A good example is what happened at 13, Ulitsa Kracina, in the Moscow centre. This building was marked for demolition in 2001, 2003 and 2004. It’s now 2005, the building is still standing, and it has been taken off both the 2005 and 2010 demolition lists! What happened? A group of residents got together and protested loudly about the compensation that was being offered to them. It helped that some of them were veterans, but the fact that people knew their rights was a key factor. The residents won their case because they were attentive to detail; in this case their building is a Brezhnev apartment block. These buildings have an “expiration date.” Regardless of its condition, a Brezhnev building has to be destroyed after twenty-five, thirty, or thirty-five years, depending on its type. The residents found out that somebody had altered the date of original construction; they went to a television station with their story, and that was the end of the matter.

A Last Ditch Stand

But what do you do if you are the only expat in your building, or the only one who does not want to move? The answer is sit tight. The building cannot be demolished if even only one apartment owner doesn’t agree. If you can stand the pressure, we think that in this case you will most likely be offered significantly more than what was offered to anyone else, because the developers want to go ahead with this project, and you are the last rock on their path. Even if they pay you more than they wanted, in overall terms it will still be a good business for them; try to make it a good business for you as well.

2/12 Krestovozdvizhensky Per., Bldg.4	18 Sadovaya-Triumfalnaya Ul., Bldg.4	Property 15 Degtyarny Per., Bldg.2
6/7 2nd Tverskaya-Yamskaya Ul., Bldg.4	11/17 Ul. Ostozhenka	13/12 Ul. Ostozhenka
8/13/5 Podkopaevsky Per.	25 4th Tverskaya-Yamskaya Ul.	Property 6 Bolshoy Karetny Per., Bldg.
6 Potapovsky Per., Bldg.1	5/1 Lyalin Per., Bldg.1	6 Barykovsky Per.