Skip to main content
BBC NEWS / THIS WORLD
Graphics VersionBBC Sport Home
This World | Contact Us | FAQs |
Monday, 18 July 2005, 10:15 GMT 11:15 UK

Moscow's property lawlessness

By Christopher Mitchell
Producer, Property To Die For

Imagine yourself sitting at home, unable to move because you are nursing a broken leg. Suddenly you hear a roar outside... and realise a bulldozer is attacking your front porch.

Alexei Syomov

This is what happened to Alexei Syomov, who thought he owned his home in Gavrikovo, just outside Moscow.

Speaking in front of the huge apartment block that now stands on the site of his wooden house, he says: "They took all of my furniture out. Then they began destroying the house. After a couple of minutes the place where it stood was flat."

By "they", he refers to bureaucrats who, he claims, stood to profit from developing the valuable land his house was standing on.

This is a side of the Moscow property market virtually unknown to the West.

Multi-billion-dollar housing scams have become big business in Russia.

And despite President Vladimir Putin's promise to institute a dictatorship of the rule of law, these scams are all too often shrugged off by the authorities.

Autocratic inheritance

After the Soviet Union collapsed in 1991, there followed the biggest smash-and-grab free-for-all in modern history.

"People have no confidence in private property rights because the enforcement of laws is weak"
Grigori Yavlinski, liberal reformer

Who owned everything up until then? The ministry buildings, the industries, mineral resources, hotels, palaces, sanitaria, the money?

The Soviet Union and the Communist Party did of course.

But they did not exist any more.

Everything that was not nailed down - and much of what was - was privatised; which usually meant stolen.

Only then were private rights extended to ordinary people, those who lived in apartments and dachas (summer cottages), which previously had been in the gift of the state.

The Tsar, or latterly the Communist Party, granted individuals the right to own private property, but these rights could easily be revoked and had few legal guarantees.

What is happening in Putin's Russia reflects this autocratic inheritance.

Paradox

"Property is theft," said Pierre-Joseph Proudhon, the 19th-Century French socialist. And many ordinary Russians would agree that theft is the fastest and cheapest way to get hold of property in Moscow today.

Vladamir Putin with business chiefs in March 2005

Grigori Yavlinski, a leading liberal reformer, told the BBC: "Still in Russia we have a system in which private property is conditional. People have no confidence in private property rights because the enforcement of laws is very weak."

But there is a paradox.

Putin's government is also promoting private property by land transfers and mortgages. And judging by Moscow's booming real-estate market, this policy is succeeding.

With the capital now a thriving oil and gas town - a sort of Houston on the Moskva river - and with people and businesses flocking in from all over the country, property values rose about 40% last year.

Rampant development

The rocketing real estate values, however, are also threatening Moscow's architectural heritage.

"We don't have laws in this country... it's lawless, a complete mess"
Rozalia

Old buildings in prime locations are attracting the developers' attention.

Stanislavski 2 is a small restaurant in a part of central Moscow that has been largely destroyed by rampant development under the direction of the city's mayor, Yuri Luzhkov.

The restaurant was Russia's first private restaurant and has now been operating for 17 years, run by Emilia Souptel and her mother Rozalia.

The two women are currently fighting a threatened takeover by a developer, whose office is in a building next door to the restaurant.

He refused to speak to the BBC, saying his business affairs were "too complicated" to discuss.

Emilia Souptel

But his method, say Emilia and Rozalia, is quite simple: he is trying to force them out by arguing that a new law has overridden the one under which they bought the property.

"I bought this restaurant legally," says Rozalia. "Today we have a new law cancelling the previous law. Tomorrow there will be yet another law cancelling the present one.

"We don't have laws in this country. It's lawless, it's a complete mess. There'll never be private property here, it's not possible."

The sheer scale of repossession of assets, carried out through seemingly simple mechanisms - and often oiled by the easily corruptible judicial system - raises the question of whether the Russian government is able, or indeed willing, to control this alarming trend.

The new insecurity of property is therefore at the very heart of Putin's much-vaunted reforms.

Property To Die For was broadcast on Tuesday 19 July 2005 at 2100 BST on BBC Two.



E-mail this to a friend
Related to this story:
Property To Die For (15 Jul 05 |  This World )
Read your comments (18 Jul 05 |  This World )
Putin 'halts' privatisation probe (24 Mar 05 |  Business )
Battle for the heart of Moscow (30 May 03 |  Europe )
Yukos unit fetches $9bn at sale (20 Dec 04 |  Business )

RELATED INTERNET LINKS:
Films of Record
The BBC is not responsible for the content of external internet sites



SEARCH BBC NEWS: 

This World | Contact Us | FAQs |

NewsWatch | Notes | Contact us | About BBC News | Profiles | History

^ Back to top | BBC Sport Home | BBC Homepage | Contact us | Help | ©