President Vladimir Putin announced the launch of a national drive to provide the population with affordable housing in September 2005. The initiative was launched against a backdrop of unprecedented growth in real estate prices and a general housing shortage.
Young families in particular, deemed essential by the government to solving a demographic decline of about 1% a year, have been hard pressed to secure affordable homes.
"On the one hand, we are facing a shortage of cement, and on the other hand, monopolists are obstructing the building program by raising cement prices," Yegor Stroyev, governor of the Orel Region, said during a meeting with President Putin. "Steelmakers also seem to have lost their minds."
Stroyev, who was speaker of the Federation Council, Russia's upper house of parliament, in 1996-2001, said that in an attempt to solve the problem he had closed a deal with a Ukrainian company.
Under the agreement, a plant will be built to produce 140 million ceramic bricks a year, which can be fitted together without cement.
He said construction would be completed in 20 months, and added that new technologies were being developed to make cement out of sand and clay.
Stroyev highlighted the importance of the building project for his region, where he said housing prices were among the lowest in the country. With the price of a square meter at 15,000 rubles ($560), capital investment in housing construction has grown 25% in a year.
The governor also gave an account of the assistance provided to young families acquiring homes. "We [regional authorities] compensate 30% of the price a young family pays, grant them an extra room for a second child, and a flat for a third child, free of charge."
Stroyev also said a sanatorium for war veterans has been built in the region.
