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- Major reboot: regions will receive subsidies for the completion of unfinished buildings
Major reboot: regions will receive subsidies for the completion of unfinished buildings
The authorities will deal with the issue of unfinished capital construction projects. To solve this problem, the regions will be provided with subsidies from the federal budget. Acceptance of applications for funds has already started. The initiative will allow for the return to circulation of facilities in which significant budgetary funds have already been invested, experts say. However, the state will need to develop measures to prevent the occurrence of unfinished buildings in the future. How the new norm will work is in the Izvestia article.
Coming back to life
The Russian Ministry of Construction has begun accepting applications for subsidies to co-finance the completion of capital construction projects included in the federal register. The goal is to put them into operation.
The funds will be provided within the framework of the state program "Providing affordable and comfortable housing and communal services to citizens of the Russian Federation." Applications will be accepted until June 18, 2025. Subsidies will be issued in 2026.
Applications will be selected based on the relevant rules for the provision and distribution of subsidies from the federal budget.
The issue of unfinished construction in Russia is under the control of the authorities. Since 2022, the Ministry of Construction has been carrying out comprehensive work to reduce the number of such houses. In particular, a federal register of construction-in-progress has been created. It currently houses 773 buildings. The board has already made decisions on 696 of them — 155 facilities will be demolished, 216 will be privatized, 4 will be transferred, and 321 will be completed.
The criterion for selecting houses is their presence in the federal register of unfinished capital construction projects, the press service of the Ministry of Construction told Izvestia. The decision to complete the construction is made by the relevant headquarters.
In order to receive a subsidy, the region must provide supporting documents. This includes the conclusion of the state expert examination of the project documentation, issued no earlier than three years before the year of submission of the application, and an extract from the Unified State Register of Legal Entities confirming the ownership of the unfinished object. The funds will be distributed among the regions based on a rating, according to which subsidies will be provided "from lower to higher", taking into account the need to complete the facility.
"Thus, the less funds a region needs to complete an unfinished construction project and the greater the degree of its readiness, the higher the facility will be in the rating when allocating subsidies," the ministry explained.
A coordinated approach
The problem of unfinished construction in Russia remains relevant, but in recent years there has been a positive trend, said Sean Betrozov, a practicing lawyer at the Moscow Chamber of Lawyers and a member of the Russian Bar Association. Thanks to the work of the government commission and the Ministry of Construction, decisions were made on more than 650 sites in two years. Some of them have already been completed and put into operation.
— This applies, in particular, to social facilities: schools, hospitals, sports complexes, as well as individual residential buildings. The program not only solves the problem of unfinished buildings, but also returns to circulation objects in which large funds have already been invested," the Izvestia interlocutor emphasizes.
The federal register of unfinished capital construction projects created by the Ministry of Construction has become a tool for their accounting and inventory, says Ilya Rusyaev, managing partner of Rusyaev and Partners, lawyer.
"It is this registry that becomes the starting point: it contains information about the status of an object, the legal grounds for recognizing it as incomplete, and scenarios for further actions," the expert explains.
For the implementation of one of them — the completion of construction — the state will allocate subsidies. The government has already created a regulatory framework for a new state support mechanism, Betrozov recalls. The developed rules determine the selection procedure, application requirements and conditions for providing financial support.
The recipients of the subsidies are Russian regions with unfinished capital construction projects. Public authorities of the subjects will have access to funds, not private companies.
To receive state support, a regional regulatory act with an approved list of measures will be required, including reconstruction or completion of construction, Rusyaev clarifies.
In addition, the application must be accompanied by a technical and economic justification of the project, updated design estimates with a positive conclusion of the state expertise, as well as documents confirming ownership of the facility.
If everything is in order, the subject of the Russian Federation and the Ministry of Construction will conclude an agreement fixing the amount of financing, the completion dates, the obligations of the parties and the parameters for monitoring the intended use of funds.
At the same time, it is important that the region allocate its own funds for the completion of the house, since the program is based on a co-financing mechanism.
"This model eliminates the passive expectation of funds from above and requires regions to initiate management and budget decisions in advance,— Ilya Rusyaev is convinced.
In this case, the Ministry of Construction is assigned the function of coordinator and controller: applications submitted to the federal body are checked for compliance with the criteria and only after that they are transferred to the presidium of the government commission, which makes the final decision.
The launch of the subsidy system starting in 2026 should accelerate the completion of work on most of the remaining facilities, especially those whose completion is technically possible and economically justified, Betrozov expects.
Reaching a new level
The effectiveness of the program will be ensured by several factors, Ilya Rusyaev believes. In particular, co—financing with the state will help to remove one of the main obstacles - the lack of funds, which caused a significant part of the unfinished buildings.
However, for the successful completion of the facilities, not only money is needed, but also resources, such as building materials, Dmitry Zhuravlev, scientific director of the Institute of Regional Problems, draws attention.
— It is important that they are always available. Because it's not enough just to allocate money, you also need to be able to purchase goods with it," the expert warns.
Another advantage of the initiative is the orderly nature of the selection and mandatory reporting, adds Rusyaev. They reduce the risks of budget spending. It is extremely important that subsidies are approved only for those buildings that can actually be completed, Zhuravlev agrees.
— It is necessary to avoid attempts to restore all unfinished buildings with the help of the initiative, without taking into account the resources that are required for this. The program will be successful if the subsidies are allocated exactly for the amount of resources that are available. Then it will be possible to complete the facilities in a relatively short time," he is convinced.
However, the authorities do not plan to complete all the facilities with the help of co-financing, says Elena Zubeeva, Candidate of Economics, Associate Professor of the Department of Economics and Management at the Institute of Economics, Management and Law of the Moscow State Pedagogical University. Some unfinished buildings will eventually be demolished, some will be privatized, and only a part will be completed.
Measures will also be required to prevent the occurrence of unfinished objects in the future, Rusyaev notes. Among them, he highlights stricter criteria for admission to construction, monitoring the implementation of contracts and assessing the financial stability of developers.
By the way, the authorities have already taken care of the issue of preventing the appearance of new unfinished buildings, says Sean Betrozov. In particular, amendments to the legislation are being discussed, according to which the developer, who has not completed the facility on time, will be obliged to dismantle it and restore the site to its original condition at his own expense.
This suggests that the state policy in the field of unfinished facilities is reaching a new level — from point solutions to a systemic mechanism, Betrozov believes. Subsidies from the federal budget are becoming a key element of this work, making it possible to complete the most significant projects.
— If the declared model works consistently and transparently, then in the coming years the scale of the problem of unfinished construction will be minimized, — the expert is sure.
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