Novgorod Regional Investment Initiative: Land and Real Estate Reform Sector

NOVGOROD REGIONALINVESTMENT INITIATIVELAND AND REAL ESTATEREFORM SECTORFINAL REPORTPrepared forHousing Sector Reform Project IIProject 110-0008U.S. Agency for International Development,USAID/MoscowContract No. EPE-0008-Q-00-5120-00, TaskOrder No. 4Prepared byMartin Richard MillerChief-of-PartyPeter HartSteven ButlerNERAPADCOTHE URBAN INSTITUTE2100 M Street, NWWashington, DC 20037(202) 833-7200www.urban.orgSeptember 1998UI Project 06612-004 FINAL REPORTNovgorod Regional Investment InitiativeLand Reform SectorTable of ContentsPageExecutive Summary AI. Introduction: 1A. Land and Real Estate Reform within the Regional Investment Initiative 2B. Project Organization 4C. Recommendations on Program Continuation 4 II. Component A. Novgorod Oblast 7 Task 1: Improve the Tax Structure for Investment 7 Task 2: Establishment of the Legal and Regulatory 12 FrameworkTask 3. Land Reform and Market Stimulation 16 III. Component B. Velikii Novgorod (City) 27 Task 1: Establish the Legal and Regulatory Framework 27Task 2: Land Use Regulation 29IV. Component C. Coordination and Priority Sub-tasks 31A. Coordination and Priority Sub-tasks in Oblast 31B. Priority Sub-tasks in Velikii Novgorod (municipality) 36C. University Partnership 41V. Satisfaction of Performance Indicator Objectives 42VI. Index of Papers and Materials 44VII. Appendix Materials (separate volume; contents on following page) iiiVII. Appendix Materials (separate volume)I. Property Tax ProgramA. Working Agreements with oblast raionsB. “Information on Property Rights in Property Taxation System”C. “Requirements for the Automated Management System for Managing Real Estate Taxation (AMSRE)”II. Legal Framework in Oblast and CityA. Proposal for Action Plan for Conversion of Residential Land Rights: “SYSTEMATIC REGISTRATION”B. Municipal Land Ownership Correspondence with Novgorod Oblast Land CommitteeC. Land Use Regulation Memorandum: Structure of Land Use Regulations in Novgorodskii RaionD. Resolution of City Duma authorizing the land auction and proposing amendments to Oblast Law “On Allocation of Land Plots...”E. Legislative Proposal to Re-codify Novgorod Oblast Land LawsF. Comments of Proposed Novgorod Oblast Ordinance “On Regulation of Land Relationships within the Territory of the Novgorod Oblast to Re-codify Land LawsIII. Stimulating Land MarketsA. Registration and market stimulation materials: Attachments A-GB. Draft of Oblast Raion-municipality land auction preparation processC. Recommendations by PADCOIV. Priority Sub-tasksA. “Special District” description1.Introduction paper2.Description of Velikii Novgorod “Special District”3.Outline of publication describing “Special Districts”B. “Pro-active land privatization” Marketing OptionsC. City land auction preparation processD. City land auction materials checklistsE. Recommendations on auction preparations by City AEXECUTIVE SUMMARYIn 1997, the Novgorod Regional Investment Initiative was organized to moreeffectively accelerate economic transition at the local level, foster U.S.-Russianeconomic and community-based linkages, and spur increased trade and investment.Five broad themes formed the pillars of the RII in Novgorod; four of these (acceleratedevelopment of a land market, improve institutional capabilities in real estate, marketNovgorod opportunities for investment, and foster U.S. trade) were supportedthrough activities of the “Land and Real Estate Reform” sector.Development of land as an efficient means of production is a key component to long-term economic reform and growth. Transferring control, preferably in ownership, ofland from public to private possession is an obvious step to make land moreproductive and useful. Several activities were undertaken in 1997-98, including: (1)helping find ways to convey land from local government into private ownership inwhich title to and use of land is transparent, stable, and assured; (2) educatingofficials in a basic understanding of simplified property tax system principles whichwill ultimately replace the present three-part structure; (3) helping organizeinstitutions which can ethically administer a system of property title registration; and(4) assisting local governments in “packaging” land so that it can better be disposedof in favor of private investment toward economic development.The land reform project was organized after taking into account the statedpreferences of local officials. These interests resulted in a clearcut division of activitybetween the oblast and the city.Work in Novgorod OblastIn the Oblast, three task areas were undertaken by the Urban Institute, NERA andPADCO.• improve the tax structure for investment;• establish a legal and regulatory framework for rights and use of land• help stimulate a real estate market to which prope