Institutional analysis of housing in Russia

Abstract

The article deals with the role of the housing owned by the Russian households. Perception of housing by the individuals from social, historical, psychological and law perspectives are analyzed. The role of housing and its influence on the households’ economy is underestimated. The choice of housing for a household is featured by a specific rationality, namely, associated with the social and psychological factors, rather than exclusively by financial ones. The authors trace the origins of the Soviet institutional model and its effects on the modern households. The paper provides evidence on the ownership of housing in Russia and on the lack of a developed residential property market. Differences and similarities of real estate owning for households and firms are identified. The research findings allow to conclude that it is not typical for the Russian mentality to use life lease housing, due to the Russians’ historical memory, as well as underdeveloped long-term rental housing market in Russia. This behavioral model distinguishes Russian households from the Western ones. The underlying motives and interests of households related to the real estate are analyzed. The authors suggest an unconventional approach to study the real estate market through the prism of the internal and external institutional environment.