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THE RESTORATION OF THE URBAN ELITE HOUSING IN THE MOSCOW AREA OSTOZHENKAстатья
- Авторы: Badyina A.V., Rukin M.D.
- Журнал: Klimate&Nature
- Номер: 1(3)
- Год издания: 2016
- Первая страница: 44
- Последняя страница: 62
- Аннотация: THE RESTORATION OF THE URBAN ELITE HOUSING IN THE MOSCOW AREA OSTOZHENKA Badyina A.V. , Rukin M.D. UDC 711.168 ISSN No.2408-9591 Abstract. Gentrification is a global urban strategy, deliberately pursued in different parts of the world, where it shares the features of the systematised large-scale rebuilding of inner-city dwellings, corporate-government partnerships and a repressive attitude towards native people. This article considers some aspects of this process in post-Soviet Moscow and presents a study of one of Moscow’s central districts – Ostozhenka – as a prominent example of a neighbourhood-scale transformation of a once-neglected residential area into the most exclusive quarter. Keywords: market, privatisation, regeneration, proletarisation, gentrification, occupational profile, the working, the institutional arena, the interplay, Post-Soviet Moscow, power and capital, change, ‘the Golden Mile’, legacies of plans, Ostozhenka, social displacement, quarter, conquering, capital. 1. Introduction Since the 1970s the institutional arena in cities throughout the globe has experienced similar tendencies often connected with the rise of neoliberal ideology and its influence on the political and economic landscape. The principles of the new political economy have been found in untrammelled market forces and non-interventionist government – in direct contradiction with the previous Fordist or Keynesian state. The implementation of the new liberal ideology has been through different channels: deregulation, commercialisation, privatisation, downsising government, flexible labour markets, free trade, public-private partnership – all of which give greater privilege to the private sector [1, 9, 10, 12]. The triumph of neoliberalism has been backed by the fall of the state socialisms in Eastern Europe. The very process of transition to the market may be regarded as a neoliberal politico-economic project [40]. As time passes, however, it is becoming evident that the neoliberal project does not have a single outcome. The reason is believed to rest with the path-dependent character of reforms and ‘contextual embeddedness’ of restructuring projects [11, 40]. Instead of the triumph of the faceless universal neoliberal capitalism with similar structures across all countries and ‘removed’ government, a great variety of local practices has arisen, sometimes the opposite of what was expected. Moreover, the neoliberal rhetoric often disguises proactive and even authoritarian government, which plays an enabling role for market forces and is often repressive in relation to the local population [38]. An example of the forces of neoliberal urbanism that have been manifested globally but have unfolded differently in different contexts is the modern phase of gentrification. CLIMATE&NATURE no. 1 (3), 2016 Gentrification has been a major theme in urban geography, attracting much academic debate *32, 33]. It is usually understood as a complex socio–spatial phenomenon, which involves the physical upgrading of low-status residential neighbourhoods in inner cities and large-scale displacement and replacement of their residents by wealthier newcomers who carry their own lifestyles into the renewed neighbourhoods [24, 45, 52; see 18 for a broad discussion of gentrification in geographic and historic perspective]. The recent accentuation of gentrification worldwide is often connected to the rise of a service-based economy changing the function and status of inner cities as well as a neoliberal approach to urban development. As Smith [45] argues, an initially marginal urban process first identified in the 1960s in a few major capitalist cities, gentrification has evolved into a global urban strategy, deliberately pursued in different parts of the world, where it shares the features of the systematised large-scale rebuilding of inner-city dwellings, corporate-government partnerships and a repressive attitude towards native people. Gentrification, thus, suggests particular power relationships and a struggle for urban space, which are in many respects similar to those of colonialism *4+. However, what fits together as a global process comes from diverse, even contrasting urban experiences. Moreover, a variety of manifestations may appear even within the same urban context. Bridge says ‚*g+entrification encompasses redevelopments that involve large-scale corporate investment as well as the more piecemeal sweat equity/small builder renovations of historical inner urban housing‛ [14, P. 2547]. The acknowledgement of this contextuality and diversity has resulted in a call to excavate the detailed ‚geography of gentrification‛ [31, 34]. This article considers some aspects of this process in post-Soviet Moscow. In central Moscow, gentrification has been remarkable since the introduction of the market economy in the early 1990s. However, there has been a lack of detailed documentation of this socio-political process. To fill this gap, we present a study of one of Moscow’s central districts – Ostozhenka – as a prominent example of a neighbourhood-scale transformation of a once-neglected residential area into the most exclusive quarter. Ostozhenka may not be the most typical experience for the city, but it carries so much symbolism that it may be regarded as a symbol for the new Moscow. An elegant story of successful regeneration for some and a disgraceful piece of urban tyranny for others, Ostozhenka richly portrays all the contradictions of urban change in post-socialist society. Although market forces drive the process, the Moscow government has actively facilitated gentrification in Ostozhenka. A kind of boosterism has played a very important role in the recent renovation of the city centre in sharp contrast with the late Soviet period, but ignoring the social costs involved is leading to growing economic segregation as well as to the partial degradation of Moscow’s historic value. 2. The study area: Luxury housing post-Soviet Moscow The discussion of gentrification in the context of post-socialist cities should take into account their only recent liberalisation. The logic of state-led urbanism produced a somewhat different type of the city from Western capitalism regimes [3, 6, 7, 20]. The noteworthy features of the ‘mature’ socialist city were a low degree of social segregation and polarisation, a moderate representation of the tertiary sector, and overall under-investment in the aesthetics of new housing estates – even in central, prestigious locations. The introduction of the market economy has unlocked the mismatch between the function and the morphology of the socialist cities and the logic of the market. A consequence has been the rush of new urban processes, which has rapidly changed the function and appearance of cities. However, the intensity of this flood has been asymmetric and asynchronic. Bigger cities and inner cities are, literally, first and foremost bear the signs of post-industrial transformation, tertiarisation and commercialisation [8]. The social topography of urban space has also changed. While housing privatisation has formed the supply end of the residential market, socio-economic stratification has created a differential demand for dwellings and ability to maintain the conditions of homes. This has resulted in growing socio-spatial fragmentation. Post-socialist transformations are especially visible in cities that are high in the urban hierarchy, such as Moscow. Soon after the dissolution of the Soviet Union in 1991, Moscow has undergone very rapid reconstruction. City policies and business interests have been inextricably interwoven in this process, which many link to the reestablishment of Moscow as a world/global city [13, 22, 28, 29]. The concentration of Russian financial wealth has led to the rapid growth of a post-industrial economy in Moscow, while mushrooming financial and business services have required the built environment to be renovated to suit the new socio-economic conditions. These changes are particularly noticeable in central Moscow. According to Kolossov and O’Loughlin *29, P. 424+, the historic centre, which accounts for 6.4% of the total city area and 8% of its population, has captured 40% of capital investment and construction. Along with retail and office developments, the inner city has also experienced rehabilitation and redevelopment of its housing. The concentration of the Russian financial sector and major headquarters in Moscow has resulted in a considerable segment of the very well off living in the city. Already at the beginning of the 1990s, affluent people were buying privatised apartments near the centre and renovating them to the highest standards. However, a central location and an expensive renovation of an apartment turned out to be not quite enough. A building constructed as luxurious from the very beginning and the ‘appropriate’ social milieu became increasingly important factors for so-called ‘elite housing’, which came to connote deluxe accommodation for the new rich. The evolution from apartment-by-apartment to house-by-house and then to block-by-block elite housing (re)construction signified the emergence of systematic gentrification in inner Moscow. The result has been not only changes in property, but also social change. The limited residential segregation of the Soviet-period Moscow that was based on non-economic factors [2, 7, 37] yielded to the pronounced socio-economic polarisation of Moscow’s space. The capital flows, which are directed to the city centre in general, intensify in particular locations, with the Ostozhenka residential neighbourhood having become one of the most attractive areas. This is in striking contrast with its history during the Soviet period, when the district stood out in central Moscow for its desperate state. For a long time, the district was zoned for rebuilding into administrative use, and even if this was never done, it remained without proper repair. After a long period of disinvestment, however, this neighbourhood has become the first area in close proximity to the Kremlin, with large rebuilding wholly changing its appearance. An official goal of redevelopment policy towards Ostozhenka has been the restoration of its historic value, but in reality its historic ambience has been destroyed and the area has been transformed into a new neighbourhood that celebrates its privilege and satisfies the tastes of the new upper class. The underlying mechanism of the post-socialist gentrification process may be explained by the ‚rent gap‛ [16, 17, 43, 45]. In the context of the capitalist city, disinvestment in the built environment is essential for the production of opportunities for capital accumulation in a later stage of reinvestment. These opportunities can materialise when the gap between the potential and actual ground rents grows ‚sufficiently large‛. Continuous shifts of investment and disinvestment in the built environment are considered as a repetitive cycle of capital flows. The post-socialist context is different in the sense that ‚the mobilization of urban real-estate markets as vehicles of capital accumulation‛ *45+ has appeared only recently, as has entrepreneurial capital accumulation. Nevertheless, the mechanism of the rent gap seems to be similar, as the emergence of a housing market has created the opportunity to make profit out of past under-investment under socialism [see 47 for post-socialist Prague+. The ‘meta-scale’ rent gap resultant from the macroeconomic shift from the socialist past to the capitalist present has further translated into neighbourhood-scale rent gaps depending on the local context. Ostozhenka has been prominent among other districts in Moscow because during the Soviet period it suffered from relatively poorer investment and was, thus, a victim of the ‘administratively led’ uneven development. Although the neighbourhood continued to suffer from economic deprivation in the aftermath of the collapse of the Soviet Union, in the subsequent stage of market mobilisation, the use of the rent gap of the neighbourhood became real. However, as Hamnett [23] notes, the existence of the rent gap is not a sufficient condition for gentrification to occur. The power of this theory is greatest when it attracts a wider politico-economic perspective in explaining the choreography of gentrification in a particular situation. As in many other capitalist cities, it is the interplay of power and capital, public policy and private interests, bureaucracy and the market that has deployed and shaped gentrification practice in Ostozhenka. For this reason, in this article we focus on the circumstances that have triggered and followed the use of the rent gap potential of the Ostozhenka area. The qualitative part of the data was gathered through in-depth interviews with representatives of Moscow’s real estate businesses, planning, architectural and local administrations as well as with residents. The professional experience of one of the authors in the Moscow development market also made it possible to benefit from ‘insiders’’ or ‘participants’’ views and observations. In addition, archive enquiries allowed earlier planning materials for Ostozhenka to be analysed. It is problematic to analyse quantitatively changes in the Ostozhenka area because there are no official statistics on the neighbourhood. Various public and private organisations hold relevant pieces of information which, even if accessible, are often of unsatisfactory quality. Therefore, in this study an effort was made to systematise available data and surveys were conducted to estimate changes in the neighbourhood. 3. The phenomenon of Moscow's Ostozhenka district: Legacy of the old plan and the new experience The Ostozhenka neighbourhood is a ‘microdistrict’ in Moscow (c. 0.5 sq. km), which is located within the Garden Ring, only one kilometre to the southwest of the Kremlin. Today it is one of the most expensive districts in Moscow, which the estate agents metaphorically call ‘the Golden Mile’. Some of its apartments belong to the list of the most expensive in the world, while the neighbourhood is frequently listed among the world’s most expensive *51+. Depending on a micro-location, a specific project and stage of construction, the prices for flats in Ostozhenka varied in September 2011 from $19,781 per sq. m. to 48,092 per sq.m. for some penthouses (or between $1million and $11 million for a flat) with average being $18,000 per sq.m. [19, 42]). This was well above the average price for residential properties in the Central Administrative District (approximately $6,800) and Moscow as a whole (approximately $4,500) [27]. This is despite average prices having dropped from the peak in 2008 by almost a third in 2011. Obviously, the majority of the clients of Ostozhenka projects are people who had at least USD1million for an apartment. This money is normally paid as a cash lump sum, although the proportion of mortgage deals is also increasing. Against a background of lower incomes in Russia than in the West, it seems that the incomers to Ostozhenka are not the ‘new middle classes’ who were the classic gentrifiers in Western cities [15, 34], but their profile is more in line with the very well-off gentrifiers of the modern stage of high-end gentrification in major global cities, who Lees [31+ calls ‘financifiers’. The reason for the highest prestige of Ostozhenka is its proximity to the Kremlin, to the Christ the Saviour Cathedral and to the picturesque Moskva river embankment, but it is not only this that has made Ostozhenka stand out. It is the large scale of rebuilding that has created the Ostozhenka phenomenon. Ostozhenka is becoming the first neighbourhood in the heart of Moscow that will be totally rebuilt into a large agglomeration of wealthy properties. Existing houses dating from the nineteenth-early twentieth century give way to new exclusive condominiums as well as offices and restaurants. A precondition for the comprehensive reconstruction of the Ostozhenka neighbourhood lies in the fact that it was the only district so close to the Kremlin that had a large portion of prerevolutionary properties in very poor condition. After the 1917 October Revolution, this predominantly residential area of bourgeoisie and noblemen became housing for working-class people who moved into the spacious apartments of the former owners and split them into ‘communal apartments’ (kommunalki), where several families shared a bathroom and a kitchen. In contrast to other similar locations, this district was neither rebuilt nor considerably renovated in the Soviet era, since it happened to border the ill-fated Palace of the Soviets. The Palace was planned to be the tallest building in the world to be constructed on the place of the Christ the Saviour Cathedral, a monument to the Russian victory over Napoleon, which was dynamited in 1931. Soviet architects left Ostozhenka untouched in order to redevelop it in a single architectural ensemble with the proposed Palace. However, the problem with the foundation for the Palace and then the Second World War delayed implementation of the plan, which was finally abandoned in the 1950s, the area of the former Cathedral being transformed into the largest open-air swimming pool in Moscow. But even after giving up the idea of the ambitious Palace, Ostozhenka was considered as doomed for redevelopment. Lack of funding meant that these plans being delayed but never abolished, which resulted not only in new construction being limited in the area, but also in the neglect to maintain the existing housing stock – in the wait of the rebuilding such investments were considered a waste of public resources. It was not until the 1980s that the attention of conservationists was turned to Ostozhenka. The untouched neighbourhood seemed to preserve a prerevolutionary spirit of traditional Moscow. However, the physical condition of the neighbourhood was poor. In 1989 Soviet planners designed a programme for neighbourhood regeneration, which was approved in 1990 and upheld by the already post-Soviet Moscow administration in 1992. In contrast to the 1971 Moscow City General Plan, which envisaged the transformation of Ostozhenka for administrative use, the new programme sanctioned the maintenance of its residential function. The programme sought to establish harmony in the built environment through a ‘contextual’ approach, which meant comprehensive rehabilitation of the structural and aesthetic values of the territory as a whole and restoration of its historic ambience. The social aspect was also articulated, stressing that current residents were to remain in the district, but had to improve their housing conditions. Like its predecessors this programme has failed. The economic crisis of the early 1990s diverted the budget money from heritage restorations, while private capital had a somewhat different interest in Ostozhenka. Because the Ostozhenka plan was not legally binding, and was neither participatory nor externally controlled, the destiny of the district became the subject of closed negotiations between property developers and city administrators, the result of which was far from the intentions of the programme. The historic buildings have been swept away and often replaced with modern-style houses. Instead of following a single design, each plot was allocated its own architectural concept separate from its surroundings. Only some buildings on the outer edges of Ostozhenka have been restored or remain under protection, but even there the pressure to replace them has been intense. Although at first the Ostozhenka programme was ‘adjusted’ after each new project, it was simply abandoned at the end of the 1990s. 4. Step forward: from the proletarian to gentrification In the late imperial period, Ostozhenka was overall a residential area housing the bourgeoisie and the aristocracy. The 1917 Revolution shook up the district’s profile. Properties were nationalised and split up into kommunalki for families of the proletariat. However, as the Soviet social stratification developed as a result of new social engineering, Ostozhenka found itself socially mixed. Although residential areas near the centre were always favoured by Soviet political and professional elites, segregation based on special connections in the housing market was much patchier than is sometimes imagined. Different social groups typically found themselves living next door to each other in central Moscow. The social profile of Ostozhenka was even more diversified than in many other districts because of its generally lower quality. The district was lacking in interest to Muscovites, and since the state was improving their living standards, in-migrants from the provinces replaced them in shared kommunalki. At the time when the 1989 reconstruction programme for Ostozhenka was drafted, planners conducted a survey of the district’s social make-up. The registered population of the neighbourhood was 3,800,000 thousand. People born outside Moscow accounted for almost half of 50 the working-age population and around 60% of pensioners. Those without a higher degree dominated in the neighbourhood – almost 70% of the adult respondents. However, as may be seen from TABLE 1, the occupational structure was diverse. In a capitalist society, an occupational profile may also be discerned in the picture of social class and status. However, this would be difficult for the Soviet ‘classless’ society, where the interrelationship between occupations, earnings and social status was much more complex and indirect. As a general approximation persons classified as intelligentsia, administration and professionals were roughly equal in number to those employed in occupations, such as sales, social services and security personnel, labourers and related occupations. The latter cohort was, however, more frequent among incomers to Moscow than among Muscovites – roughly 60% versus 40%. This is because during the Soviet period in-migration to Moscow was restricted and it was easier to obtain a Moscow resident permit when taking less prestigious jobs. Hence, even if similar in terms of ethnicity, education or skills, many economic migrants were lower status in the eyes of Muscovites. Overall, both the occupational profile and the background of the residents indicate that Ostozhenka was a neighbourhood with a truly mixed social composition, although it was less attractive than other areas in central Moscow for its poorer conditions. TABLE 1. Professional profile of the working population surveyed: 1989 (Percentage) [5] Occupations Muscovites In-migrants to Moscow Total Intelligentsia and administration 40 22 32 Professionals without higher education 20 19 19 Sale and social service personnel 18 26 21 Plant operators and laborers 10 8 9 Transport laborers 8 10 9 Construction laborers 4 7 5 Police and security personnel - 8 4 The largest proportion of the Ostozhenka population lived in shared kommunalki. According to material of the Ostozhenka General Directorate (ad hoc local administration), in 1992 as many as 70% of the total number of Ostozhenka apartments were ‘communal’ (519 out of 738 units). This was well above the average of 45% in central Moscow [49]. The kommunalki accommodated 80% of Ostozhenka’s population and 86% of Ostozhenka households. The low living standards may be partly evidenced by the fact that 40% of the population was acknowledged in various years after 1992 as living in poor housing conditions. The introduction of the market economy opened up opportunities for private investment in housing rehabilitation. By the 1990s, the major tenure form in Ostozhenka was ‘long-term use’ of CLIMATE&NATURE no. 1, 2016 51 municipal/state housing. This was a standard form for apartment buildings in Moscow (less common being tenant-owned ‘cooperative housing’). Since the start of housing privatisation in 1991, Moscow’s residents have been granted the right to privatise the dwellings, where they live permanently free of charge. By 1993 more than one-third of all apartments in Moscow had been privatised. This established the necessary precondition for the residential change in Moscow. Wealthy individuals, as well as real estate agencies, started buying privatised rooms in shared kommunalki and amalgamating them into spacious apartments and offices. This process in central Moscow is documented by Vendina [50, P. 358-359]: Mediating firms would select the options of resettling a communal flat and would find a buyer for it, paying for the operation. Separate apartments on the city periphery would be purchased for all the families leaving the centrally located communal flats < the profit was as high as 150-200%.<The fact that within 2 years *1992-1993+ the ratio of communal flats in the centre fell from 45% to 22% is a good illustration of the process intensity. In Ostozhenka, the conversion process was conducted mostly on the more prestigious northeastern edges – along Ostozhenka Street and closer to the Kremlin. But together with the city programmes for rehousing the kommunalki dwellers, it did affect the social structure of the neighbourhood and its total population decreased while the share of high-income people started to rise. The newcomers were a very heterogeneous group and attracted at that time a generic label of ‘the New Russians’– all those who succeeded in the early stage of economic transition. This ‘unmediated’ process of ‘buying into’ Ostozhenka was, in effect, the first phase of gentrification in the neighbourhood. It was not, however, until a critical moment when corporate capital came into the neighbourhood that most intensive redevelopment started. In the early 1990s corporate developers were reluctant to invest in the neighbourhood because they believed the high cost of restoring old buildings would not be met by the property prices in a low-quality district. The city administration even provided incentives for investors, but this was only partially successful. Prior to 1998, building activity in Ostozhenka was sluggish and three or four projects of residential and commercial use were being carried out concurrently. But already at that time Gdaniec [21] noted that the preservationist rhetoric of the Ostozhenka regeneration programme was forgotten in setting up these new projects. She noted the role of personal connections between developers and top administrative circles in the circumvention of planning and heritage control and changing priorities of the administration. These first projects created an adverse precedent for the heritage value of Ostozhenka. Towards 1997, the economic potential of the district attracted greater attention. Due to the lack of institutional capital developers set up forward funding investment schemes, in which they raised finance by pre-selling apartments in condominiums even before the start of the construction activity. The scheme was risky for the buyers, but provided them with a good saving, whereas developers had interest-free capital. Housing construction became very profitable and developers were looking for new markets. This became especially visible after the financial default in Russia in August 1998, when the speculative bubble of the state short-term bonds burst and more 52 investments were channelled into the real sectors of the economy. In the context of increasing scarcity of land in central locations and growing prestige of Ostozhenka’s areas, more developers found it worthwhile to work in the neighbourhood, where entire blocks of buildings could be rebuilt on the comparatively relaxed city’s conditions. Because of its entrepreneurial strategy *28, 39], the city administration was already ignoring the preservationist guidelines for Ostozhenka and allowing whole blocks to be demolished and rebuilt in order to create elitist environments. After a halt in the wake of the 1998 financial default, more and more comprehensive building projects – mostly homes but also offices – appeared in the district, at the same time as an aggressive marketing campaign was launched promoting the ultimately elitist environment of Ostozhenka. The rebuilding of the Cathedral of Christ the Saviour in 1994 to 2000, one of the most spectacular cathedrals in the world, was yet another attracting factor. Eventually a cumulative effect started to gather momentum-the greater the number of rich people came to Ostozhenka, the more prestigious it became. This more recent process may be seen as the second phase of gentrification in Ostozhenka, distinguishable from the first in many respects, but most visibly in the scale of construction. Ошибка! Источник ссылки не найден. shows the ‘cumulative total residential floorspace’ each year (brand new construction minus demolition plus rebuilding) and the consequent increase in the ‘aggregate residential space’. In 2011, the volume of residential space in Ostozhenka was estimated to be more than two and half times as high as it was at the beginning of the 1990s. FIGURE 1. The total living area of Ostozhenka (in thousands m2), the years 1994-2011. Source: Chart compiled by authors based on statistics provided by the General Directorate of the Moscow district Ostozhenka. Although some non-residential property and public space has been recycled for the new projects in Ostozhenka, the change has been conducted largely at the expense of existing residential buildings. Already in 2006 only seventeen houses remained standing of the fifty-one existing at the beginning of the 1990s, while the 1989 programme envisaged that forty-four houses would be 050100150200250300350400450500199419951996199719981999200020012002200320042005200620072008200920102011Thousand sq.m. CLIMATE&NATURE no. 1, 2016 53 saved and only those without historic or architectural value replaced. Even if the new projects in Ostozhenka have been officially described as ‘reconstruction’, they are so in a sense of demolition of old buildings and replacing them with new buildings of a modern design. In some cases the original façades of demolished buildings were saved (or rebuilt), but genuine restoration became very limited after 1998. Today, few high value historical monuments have been preserved in Ostozhenka including the eighteenth century Church of Elias the Prophet and the thirteenth century Zachatyevsky Convent, which along with the Cathedral of Christ the Saviour represent attractive features of the Ostozhenka built environment. The cost of restoration is three times the cost of brand new construction, while underground car-parking, which is extremely profitable, cannot be achieved without demolition. In the meantime, the city government was neither strict enough to protect the historic heritage, nor prepared to subsidise developers for its preservation. Quite the contrary, the government itself enabled the downgrading of listed buildings ‘by reason of a state of disrepair’ as well as their ‘reconstruction via demolition’, while the Russian monument preservation law, one of the most advanced in the world, was ignored. Such a trend is not unique to Ostozhenka, since the destruction of historic buildings and monuments has become a plague in the new Moscow. In this way, Moscow shares the experience of other economically successful Eastern European cities – as, for instance, the case of Prague demonstrates: ‚as available sites in the centre are now almost exhausted, the pressure to demolish and replace is increasing for prestigious developments, with conflicts over monument preservation and with local citizenry‛ [35, P. 210]. 5. Actions of the city authorities in the distribution of cash subsidies for the development of the "Golden Mile" The interplay of the market and public forces in the redevelopment of Ostozhenka has been significantly determined by the specifics of Moscow city where property ownership is divided between the ownership of land and ownership of buildings. Land within the city has largely stayed in city ownership and may only be leased, while constructions may be privately owned. The concentration of landownership, alongside centralisation of power in the City Hall, removes external control over Moscow’s planning and land allocation decisions. The advantageous position of the city also enables it to capture its monopolistic rent. The system in the 2000s worked in the following fashion. To be able to build housing in Moscow, developers have to conclude ‘an investment contract’ with the city administration. This is in the form of a public-private partnership agreement in which developers take financial responsibilities in exchange for their land leasehold, building rights and access to the city infrastructure. Since the post-1998 market stabilisation, the investment contracts for house building in central Moscow required investors to transfer as much as 50% of the construction-ready ouput to the city. If previously developers were able to compensate the city ‘in-kind’, with equivalent building space or social infrastructure elsewhere in Moscow, more recently the city has demanded only cash for the market value of its share. As mentioned above, at the beginning of the 1990s, interest in Ostozhenka was low and a strategy of the Moscow government was to attract corporate investors. Prior to the 1998 financial default 54 this strategy did not succeed, but as soon as the residential market intensified in Ostozhenka, the city support became much in demand. With the government’s proactive help, the process of acquiring a site for redevelopment became straightforward. The Moscow government’s entrepreneurial strategy and its own share interest in all new developments allowed developers to enjoy relaxed preservation regimes and even to circumvent the city’s own planning. Many historic buildings were, thus, classified as in disrepair and in need of rebuilding – although not always legitimately. The architectural organisations responsible would find ‘evidence’ of their physical obsolescence and, if necessary, the Moscow Administration for the Preservation of Monuments would validate their conversion from the heritage protection list [e.g.51], while others would put forward economic, ecological and social justifications for rebuilding. The painful procedure of rehousing existing residents or compensation for expropriated owners was executed in an authoritarian manner (see the next section). This support was never free from the benefaction of privileged developers and as soon as the district became prestigious it became particularly difficult to penetrate the successful pool of Ostozhenka’s developers. The relationships between the authorities and investors took on an intimate character, involving a complex web of personal relationships. Developers who possessed the necessary connections with the city administrative elite got through the land allocation process much easier than those who did not have this ‘administrative resource’. Although the investment contracts to access land have to be concluded through competition, non-transparent ‘closed competition’ has often been used for choosing particular developers. More transparent schemes have involved ‘open competitions’ and ‘auctions’ for the investment contracts. A few projects in Ostozhenka were allocated in this way. The procedures here are guided by the city development plans and other publicly stated obligations. It is often the case that the Moscow government’s building organisations, which have many properties under supervision, are in need of outside support. The Moscow government owns a number of such organisations that have the right to build using the city budget and have access to land without investment contract competitions. One example is the Department for Investment Programmes in Building, which is the ‘general investor’ for house-building in central Moscow. Such quasi-public organisations have played a major role in the Moscow development market and kept the monopoly on the most required areas. They can initiate an open competition to find a sub-investor. In general, however, open competitions have not been particularly popular among Moscow developers. It has often been the case that the projects that are sold at these competitions have involved a lot of problems at the post-competition stage. Moreover, it has happened that legitimate rivals are avoided in the stage of the ‘qualification selection’. ‘The administrative resource’ was also a valuable asset for developers who wanted to ‘resettle’ a public organisation or a residential house from Ostozhenka taking its site for redevelopment. Officially, out-of-competition projects may only be for those who build using the city’s budgetary funds. However, developers may apply to the Moscow Mayor with an offer to assist a public organisation (such as cultural, scientific, sporting or educational) to improve the quality of its premises through its reallocation to another area. In exchange, the developer is allowed to take the CLIMATE&NATURE no. 1, 2016 55 land that the organisation has used. Developers could also gain access to a land plot in Ostozhenka by buying the majority of apartments in a house or through a buyout of a company that is situated in the area and owned constructions. According to Federal legislation, the owner of a building has a preferential right to the site on which the building is situated. However, the ability to retain this right out of the investment contracts competition depended on whether the developer had enough support at the city’s top level. As practice shows, in the rush for the ‘Golden Mile’ of Ostozhenka, less transparent (often semi-and extra-legal) ways of getting land and building permits have been more popular than open and democratic ways. The prodevelopment ‘closed schemes’ helped builders to avoid barriers associated with the potential conflicts between the public and private interests in the built environment and the necessity of carrying out democratic procedures. Developers took an active role in the processes, and their success largely depended on their personal connections with the city administration elite and their abilities to ‘induce’ this elite. The open strategies are more complicated and, therefore, more costly. The most lucrative sites did not show up at the ‘open investment competitions’, while the official arrangements took a long time, understandably, due to the complicated system of public sanctions and regulations. The existence of a specific pattern of interaction between possessors of power and owners of capital is, of course, by no means unique to Ostozhenka, to Moscow or even to a post-socialist city. When the most desired urban sites are at stake, the relationship between developers and public officers is far from being transparent even in the most developed countries – from the USA to even Sweden [16, 46]. 6. Social movements and changes: in the fourth quarter? The social structure of Ostozhenka has undergone change following the physical renovations in the area. Displacement of Ostozhenka’s native residents happens either through purchase/exchange of their rooms by developers and estate agents or through the government’s ‘resettlement schemes’. The latter case has been less beneficial for the residents but cheaper for developers because it takes place outside of the market and allows them to economise on time and money. Each year, the city assigns residential buildings for demolition due to their ‘state of disrepair’ and, consequently, the households for resettlement. Legislation requires the dwellers to move from such buildings at the expense of the city budget. The city has either to rehouse the tenants in non-privatised (and, therefore, municipal) rooms in other apartments in accordance with the established norm of space per inhabitant, or, in case of privatised dwellings, to compensate the owners in-kind or in-cash. This resettlement mechanism has turned out to be an ‘effective’ tool in authorising an immediate displacement of a large number of residents. As the old housing stock in Ostozhenka remained highly depreciated, it was easy to recognise which buildings were in need of reconstruction (in effect, demolition and rebuild) and, subsequently, which inhabitants were in need of resettlement. In general, the former tenants improve their living conditions by being rehoused, but the location, the quality and consequently the value of their new dwellings depend greatly on their bargaining power. Although people are not resettled within the Ostozhenka district, because of its close vicinity to other expensive areas the location can be as different as the least prestigious outskirts of Moscow or more central areas. The bargaining 56 position of the residents depends on their ownership status. If resettled, the owners of privatised dwellings can claim greater compensation for their expropriated property than can municipal tenants. Although in-cash compensation for owners has been calculated in accordance with the city inventory valuation and is well below the market value, in-kind compensation in the form of a new apartment is negotiable. However, the residents are not allowed to privatise ‘their’ units if the building has been already classified as in need of reconstruction. Authorities can, therefore, deliberately delay privatisation in the lucrative areas. As a result, privatisation in Ostozhenka has been patchy. If resettled, the municipal tenants are usually compensated with properties on the Moscow outskirts, where massive house-building is being undertaken. The compulsory resettlement became especially popular in the late 1990s, when it became supported by private capital. During the early 1990s, the residents in Ostozhenka were mostly resettled by small developers, who consequently amalgamated and rehabilitated kommunalki. However, as soon as the corporate interest was established in the neighbourhood, developers started to contribute to public compulsory rehousing through public-private partnerships where in they paid for the cost of resettlement but gained the right to access the sites. According to the Ostozhenka General Directorate, in 1992 there were 3725 people/1620 families permanently registered as tenants in the district. Between 1992 and early 2004, the government in partnership with developers carried out compulsory resettlement of 1263 people/627 families (with at least 70% of them rehoused after 1998). Yet, 1584 people/891 families were rehoused through the quasi-voluntary ‘secondary market’, i.e. they swapped their rooms for apartments in other places through privately arranged negotiations with developers or agencies. If we add to this the number of Ostozhenka’s native residents who have rented out or sold their (privatised) rooms and moved without being formally counted as ‘rehoused’ and those who have passed away, we may conclude that it is a very limited number of the 1992 residents and their families who remained in Ostozhenka already by the mid-2000s and even more so by today. As might be expected, the replacement of the original population has not always occurred smoothly. The violence involved in the process reveals the nature of displacement – reminiscence of Smith’s *46+ ‚revanchist city‛ applied by him to US. Most of the resettled residents had attachments to Ostozhenka and wished to remain there. They felt that their property rights or rights to housing were being abused by the joint actions of the Moscow administration and the development business. To attract broader attention to the conflicts, the Ostozhenka native residents organised protest rallies and sent petitions to both the Moscow and Federal authorities. Many have brought their cases to court. However, these protests were rather fragmented, which left them weak vis-à-vis the more powerful interests, and eventually these residents were persuaded to move in one way or another. The more resistant residents experienced some form of violence, such as the cut-off of public utilities. It is quite common for ‘problem’ individuals (e.g. street people of no fixed abode or ex-prisoners) to be deliberately housed in vacated rooms in kommunalki to ‘induce’ the remaining neighbours to accept the city’s or developers’ conditions. There were also incidents, such as the one in which the foundation and bearing walls of a house with ‘uncooperative’ inhabitants were ‘accidentally’ damaged by builders with the result that the CLIMATE&NATURE no. 1, 2016 57 residents were placed at risk and forced to evacuate. The Federal Housing Code effective in 2005 has secured the right of associations of owners to the land under multi-dwelling houses. The association members will have the right to remain in the same area even if the city permits the reconstruction of their house. The new mechanisms will, however, only protect property owners, since the new Housing Code actually restrains the rights of tenants in the now articulated category of ‘social rental housing’, which is to be formed out of the non-privatised dwellings. Until now, the ability to remain in Ostozhenka has only depended on residents’ financial strength. Poorer households, even having privatised their apartments, cannot afford to maintain the physical condition of their properties and, especially, the shared space of their buildings. In contrast, wealthier residents can pool their resources and employ private services to maintain the highest standard of the building. This contrast is visible in the fact that the houses in which the majority of apartments were restored already during the first phase of gentrification are not attractive to developers. It is very expensive to reach agreement with each of the established owners. In addition, the city does not dare classify these properties as in need of reconstruction. Alternatively, poorer houses are considered to be ‘good prospects’. As a result, the wealthy residents are also among the winners from further future gentrification. As soon as the second-phase gentrification made Ostozhenka the ‘Golden Mile’ of Moscow, property prices skyrocketed there. Now, these pioneers of the new wealthy urban frontier [44] are pushed by the market to sell their apartments to even wealthier people. Social change is also followed by the ‘value’ change expressed in the philosophy of the new architecture. The promoters of Ostozhenka like refer to what they call ‘Europeanization’ of the neighbourhood. By ‘Europeanisation’ they imagine the ultimate manifestation of prosperity combined with a sort of disparagement of the rest of the Russian society [41, translated from Russian]: [New buildings] seem to be located not here, but sometimes in France, sometimes in Switzerland, more often in Finland. They have the elements unimaginable for Russian homes – well-groomed yards, elegant lawns, carefully paved paths, underground parking, impossible for Russia, luxurious terraces and lobbies. It is not the Moscow quality of life, it is rather a very prestigious, very bourgeois neighbour hood of top-managers in an old European capital city. The bearers of this ‘Europeanised’ – and, essentially, ‘globalised’ – lifestyle are those who [31] may be called ‘financifiers’ of the second gentrification phase in Ostozhenka. These are owners and CEOs of Russian large- and medium-sized businesses, representing a variety of industries and financial groups plus well-to-do artistic and media elites. A large share of properties in Ostozhenka is purchased not for owner occupation but as capital investment, often for rent. The owners of these apartments often come from extractive industries and do not live permanently in Moscow. Their tenants are also affluent families who, however, prefer to rent an apartment. There are also foreign business people and diplomats working in Moscow, and top managers of branches of international companies in Russia. In many respects this cohort shares its identity with the new upper classes colonising the ‘elite’ districts in the major world cities *cf. 16+. Some business 58 executives buy apartments in Ostozhenka simply for representative purposes. For many, the apartments in Ostozhenka are not the only properties they own, and they do not have strong ties to the neighbourhood [cf. 31, P. 402]. This second wave of gentrification in Ostozhenka is in philosophical conflict both with the original population and the gentrifiers of the first wave. Even the ‘transitional group’ between the two waves is distinct. It includes, for example, the residents of the complex of buildings of the ‘Opera House’, the first comprehensive residential project in Ostozhenka built for the Opera Art School of Vishnevskaya on the site of a public park. Revzin [40], expressing his admiration for the architecture of the second wave, criticises the architectural manifestation of the lifestyle, of this ‘transitional’ group. He calls the ‘Opera House’ a ‚densely populated henhouse‛ built for people who lack an understanding of what luxurious life is. The cultural clash between these groups is complicated by the reestablished Zachatyevsky Convent in the central part of the neighbourhood, an autonomous community in its own right. In this way, Ostozhenka is a mosaic micro-space itself. The outer parts of the district containing the restored properties of the first wave, which used to be most prestigious, are now less expensive than some quieter inner areas. The latter are vigilantly controlled by hundreds of CCTVs and scores of armed guards. Thus, even the remaining public space is undermined there, in the sense that the casual passers-by feel themselves watched and unwelcome. Even if these areas are still mixed with the islands of kommunalki and busy construction sites, the latter are continuously dissolving into the space of prosperity. There are occasional speculations as to whether the whole of the Ostozhenka district is to become gated. According to some journalists, it is the Moscow government that opposes the proposals to fence the district from the outer world. Many enclaves in the neighbourhood have already been converted into closed communities with all the necessary infrastructures inplace, while fences have become a hallmark of Ostozhenka. However, the closure of the whole district in the very heart of Moscow would be unprecedented for the post-socialist metropolis and would signify a new phase of socio-urban development. Along with islands of smaller gated communities as in Ostozhenka, larger pockets of gated quarters have emerged with the transition and so already exist in and around Moscow. However, these are mostly cottage areas outside the city or hidden among large green areas in the middle or peripheral city. They were created on undeveloped land and did not involve social transformation of existing urban quarters and so may be distinguished from the processes in Ostozhenka. 7. Discussion and conclusion Since the beginning of the economic transition, the centre of Moscow has witnessed an upsurge of building activity – not only to meet the demand of growing retail and office commercialisation but also in housing. As land is limited in the city centre, many old buildings have been either renovated or demolished to make room for luxury condominiums. Some central neighbourhoods that had once experienced physical decay started to attract capital. The example discussed here is the Ostozhenka neighbourhood, not so long ago among the least attractive areas in the centre disregarded by investors. But changes were afoot. Recent years have seen massive redevelopment CLIMATE&NATURE no. 1, 2016 59 of the district that has allowed the ‘critical scale’ of wealthy properties to be agglomerated, creating one of the most expensive areas of Moscow. In the inner areas of Moscow, land recycling is a major way for new developments to take place. In this context, the city government has considered eradication of urban decay to be among its major priorities. Gentrification, which goes parallel with regeneration, is assumed to be a by-product of the penetration of the market economy, which has little to do with government. But, as we see, the role of the Moscow administration has been paramount. First, the large scale of the Ostozhenka redevelopment started after an ad hoc programme for neighbourhood regeneration, which, even if it failed in content, created prerequisites for neighbourhood renewal. Second, the Moscow government’s entrepreneurial strategy and the city’s own financial interest in new developments, allowed developers to enjoy relaxed preservation and planning regimes. Third, it was a proactive governmental role that made the large-scale displacement of old inhabitants possible by delegating administrative tools to developers and empowering them vis-à-vis the residents. Finally, the Ostozhenka developers often avoided free market competition because the market prohibited those who were not able to achieve the necessary connections with City Hall leaders. This means that the current situation contrasts with what might be expected if there were no ‘facilitation’ of gentrification. The pro-development role of the city administration has reduced developers’ ‘transaction costs’. If the historic and other regulations had been kept strong and developers had to consult the local population on their projects as well as to bargain with every household on taking over its rooms, there would have been much less interest in Ostozhenka. It may be argued that it was the deliberate choice of a revolutionary neoliberal rebuilding of Ostozhenka instead of gradual penetration of capital and evolutionary rehabilitation. Among many truths, the winners of the Ostozhenka gentrification processes are not only the new rich residents enjoying their luxurious life in the heart of the Russian capital and developers calculating their profits, but also the original residents of kommunalki who, even having being displaced, have improved their living standards; the city economy that has had another injection from the high-profile property market; and the city, in general, that has received a renovated piece of the built environment. Yet, there is the other side of the coin associated with the loss of historic value and architectural integrity, privatisation of public space, growing social polarisation and undermining of the social mix and equality achieved under Soviet socialism. The latter presents a particular danger for longer sustainability of a society known for its egalitarian ideals and strong belief in social justice. In addition, and importantly, there has been a lack of democratic procedures in the redevelopment process in Ostozhenka with the consequent undermining of ‘urban democratic memory’, a continuous accumulation of which is, arguably, of no less importance in the post-socialist city than the accumulation of capital. In principle, much of what was happening in Moscow during the 1990s involved a lot of controversy, which would normally be contested. To understand why this was not the case, one should remember that the period in the aftermath of the demise of the Soviet Union saw the outbreak of a wide variety of severe social problems, all of which had to be solved in a limited space of time. Kommunalki, ramshackle properties, deprivation of municipal and social 60 infrastructure, the legacy of industrial areas, inadequate legislation and numerous negative processes resulting from the economic transition posed serious challenges for the then Mayor Yuri Luzhkov. Luzhkov’s ‘authoritarian neoliberalism’ successfully mobilised the property market, delivered large-scale city renovation and perked up the look and order of his ‘city empire’. However, Moscow’s success has been very much dependent on its unique economic and political role in Russia and its critical position in the network of global linkages. Two phases of gentrification in Ostozhenka have been distinguished – the spontaneous individual-driven process of housing rehabilitation before 1998 and the ‘systematic’ property-led gentrification thereafter. Both have parallels with the processes in the largest cities of the world. The processes in Moscow are also in line with the neoliberal phase of urbanism observed in the West [12]. Political regimes liberalise urban space in the sense that private interests win a privileged position in their contest with public interests. Like the case elsewhere, we see unwillingness of the Moscow government to tackle growing socio-spatial polarisation. On the contrary, the city itself plays a major proactive role, pushing forward with a strategy similar to what Harvey *24+ termed ‚urban entrepreneurialism‛ in his seminal paper. As a result, central areas are becoming living space for the upper classes, while original residents are squeezed out elsewhere. Although Moscow has not yet experienced the ‘outcast’ neighbourhoods as have, say, London or New York, some argue that their development is well underway [e.g. 28]. The similarities in form and differences in style are an exciting illustration of the global/local dualism of gentrification. The recognition of this dualism has been a rationale behind greater attention to the ‚geography of gentrification‛ *31+. This chapter contributes to this field with an account based on the experience of one of the largest post-socialist metropolis. The difference of the post-socialist context is that urban space has been only recently (neo)liberalised and a neighbourhood-scale gentrification is the latest phenomenon. However, because the mismatch between the market and the socialist reality was unlocked instantaneously, the arrival of gentrification in many post-socialist cities has been swift and spectacular. Yet, it would be pointless to establish a unitary pattern of gentrification across all post-socialist cities – even the major metropolises. It seems doubtful that Moscow’s features of gentrification bear any greater similarity to Hanoi, Tashkent or Shanghai than to Vancouver, São Paulo or Seoul – they are all different. This is not to deny the utility of a ‘post-socialist city’ label altogether. There do exist many phenomena that make the ‘post-socialist cities’ stand out as a class. 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