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President of Russia Dmitry Medvedev: Mr Savchenko, we are meeting here, in the Belgorod Region, to discuss agricultural issues at a meeting of the State Council Presidium. Today, you and I saw some interesting places too, including a visit to a good, modern company – a company that is technologically advanced.

But at the beginning of our meeting, I would like to get back to the issue, which is probably the most urgent for all the people living in our nation, the issue we began discussing and implementing as one of our National Projects some time ago. Even before that, you have been quite successful with regard to low-rise housing. Judging from what I saw today from a helicopter and while driving in a car, looking at the way things are, I see that the Housing Development project continues to evolve with its own regional flair, and new houses are being built. There are many more of them around Belgorod. We have come here, to the rural town of Alekseyevka, and I can see that new single-family houses are being built here as well. These are normal, modern brick houses, as well as houses made of new materials. How is this programme being implemented? Has the crisis impeded it? What still remains to be done? It seems to me that your experience is important for many Russian regions.

Governor of Belgorod Region Yevgeny Savchenko: Mr President, in spite of the crisis, the volume of housing construction has not decreased in recent years; actually, it is going up. Only the type of housing is changing. The share of single-family housing has risen from 60 percent to the current 80 percent in the first half of this year.

Dmitry Medvedev: That is a very significant figure. In other words, 80 percent of what is being built is single-family housing?

Yevgeny Savchenko: Yes, single-family housing. I feel that we have been doing everything in the right way: we have transferred land allotted for single-family housing construction to regional ownership and today, we can give people land in the suburbs of Belgorod, Stary Oskol, Gubkin, virtually in any district or village; we give individual developers 1500 square meters of land (we do not allot smaller lots, but you can have a bigger one) almost for free, for 15 thousand rubles [about $490].

Dmitry Medvedev: That’s a very reasonable price; indeed, it is quite low.

Yevgeny Savchenko: It is basically the cost of registration, because we do not just give out the land, we provide it with a package of documents of entitlement for the land plot, giving the right to possess and own the lot.

Dmitry Medvedev: As far as I understand, basically this land has all the infrastructure. 

Yevgeny Savchenko: In addition, we undertake to hook the land lot to gas, water, and electricity supply, and water disposal lines in the first year, and construct a hard-surface road within five years. This gets people very interested. I make sure that there are no restrictions. Every week, I get information that some 100–120 people get land lots from us to build a house of their own.

Dmitry Medvedev: And what do people do after they receive land for a very low price of 15 thousand rubles?

Yevgeny Savchenko: That all depends on the people’s level of income.

Dmitry Medvedev: Let’s look at people with average income.

Yevgeny Savchenko: If they can afford to hire a contracting team, then their house is built by that team, a small business. We have hundreds, if not thousands, of small contracting businesses that provide construction services.

Dmitry Medvedev: What if they can’t afford a contractor?

Yevgeny Savchenko: Then they build the house themselves. We have many people who do that; according to my data, they make about half of the new homeowners. This is very inexpensive. Our calculations show that if a person is his or her own contractor, the expenses do not exceed 10 thousand rubles [$325] per square metre. If he or she hires someone, then it’s more expensive: for example, a house of 100–50 square metre would cost about 1–1.5 million rubles [$32,700 – 49,000].

Dmitry Medvedev: Are there any loan programmes available?

Yevgeny Savchenko: There are many. First of all, we have standard mortgage. In the last six months, more than a thousand people have applied for mortgage, most of them for single-family housing construction.

Dmitry Medvedev: What is the current average interest rate in Belgorod Region?

Yevgeny Savchenko: Thirteen to fourteen percent.

Dmitry Medvedev: So, it has not reached its pre-crisis level yet, but close to it.

Yevgeny Savchenko: The rate on loans refinanced by the Agency for Housing Mortgage Lending (AHML) is around 10 or 11 percent. We also set up various support funds, like the fund for single-family housing construction in rural areas. Anyone who is building a house is welcome: one million rubles for ten years at five percent per annum. We have been implementing this programme for 15 years now. We no longer use any budget funds to run this programme. Refinancing is provided from the fund’s own resources, and these funds are enough. According to our data, over 40 thousand people in villages have used the fund’s services. Plus, we have created a cooperative that uses a savings system, a standard scheme used by savings banks, where people come together, with our help of course, and we provide support.

Dmitry Medvedev: A mutual lending society.

Yevgeny Savchenko: Yes, exactly. They participate themselves, and we helped them at the initial stages. And in general, developers in those cooperatives have the right to obtain a loan for 10 years at 1 percent per annum. That’s a world practice; it is widespread throughout the entire world. And we are using this experience, as are other regions in the Russian Federation. Thus, the main trend, our main priority, is single-family housing construction. We will continue employing our maximum efforts in this area in the future.

Dmitry Medvedev: You know, I am happy to see all of this; I have said it many times in the past when working in the Cabinet, and I say it again now. In order for our nation to develop fully as the largest nation on the planet, we need to spread out throughout our entire territory. Thus, single-family housing construction is the best solution to our housing problem. I’m not even mentioning the fact that living in one’s own house is much more pleasant than living in an apartment.

Yevgeny Savchenko: That is absolutely true. Thank you for your support.

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