PROSPECTS FOR CONSTRUCTION OF HOUSING IN THE USSR 1961-65

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A002000130002-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 38
• Document Creation Date: December 23, 2016
• Document Release Date: July 24, 2013
• Sequence Number: 2
• Publication Date: June 1, 1961
• Content Type: REPORT

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CONFIDENTIAL
Economic Intelligence Report
N? 95
PROSPECTS FOR CONSTRUCTION OF HOUSING
IN THE USSR
1961-65
CIA/RR ER 61-27
June 1961
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
CONFIDENTIAL
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CONFIDENTIAL
Economic Intelligence Report
PROSPECTS FOR CONSTRUCTION OF HOUSING
IN THE USSR
1961-65
CIA/RR ER 61-27
WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
CONFIDENTIAL
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CONTENTS
Summary and Conclusions
I. Introduction
A. Review of Policies on Construction of Housing,
1953-60
Page
1
5
5
1. Policies of Stalin and Malenkov
5
2. Khrushchev's Initial Policy
5
3. Decision of 1956-57
6
B. Accomplishments During 1957-60
6
II.
Goals for Urban Housing
7
A. Housing Goals of the Seven Year Plan (1959-65)
?
?
8
B. Improvement in Housing, 1959-65
8
III.
Program for Construction of Housing
9
A. Rates of Growth
9
B. Scheduling
10
C. Role of Private Construction
10
D. New Methods of Construction
10
IV.
Problems and Opportunities in Construction
of State Housing
11
A. Problems in Construction of State Housing
11
1. Major Problems
11
a. Changes in Methods of Construction . .
.
.
11
b. Quality of Construction
c. Supply of Construction Resources During
12
1961-65
13
d. Construction Costs
15
B. Significance of Problems
15
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V. Problems and Opportunities in Construction of Private
Page
Housing
16
A. Factors Influencing Construction of Private
Housing
17
1. Governmental Attitude
17
2. Demand for Private Housing
18
3. Resources
18
B. Potential of Construction of Private Housing ? ?
?
19
VI. Prospects for Construction of Housing in 1961-65 ? ?
19
A. Major Influences
20
B. Past Pledges and Commitments
20
C. Probable Volume of Housing
21
Appendixes
Appendix A. Statistical Tables
23
Tables
1. USSR: Estimated Share of Construction Resources
Required for Planned State Housing, 1958-60 Average
and 1965
2. USSR: Construction of Urban Housing, 1946-65 25
3. USSR: Expenditures on Construction of Urban Housing by
State and Cooperative Organizations and the Share of
Total Expenditures Devoted to Housing, 1946-65 . . . . 27
4. USSR: Cost Factors in Planned Construction of State
Housing, Selected Years, 1953-65 28
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Lllustrations
Figure 1. USSR: Actual and Estimated Volumes
of Construction of State and Private
Housing, 1956-65 (Chart)
Following Page
10
Figure 2. USSR: Construction of Housing by the
Large-Panel Method (Photographs) . . 10
Figure 3. USSR: Planned Shift in the Method
of Construction of State Housing,
1959-65 (Chart) 10
Figure 4. USSR: Steps in One Method of Assembly
of Large-Scale Apartment Houses
(Diagram) 12
Figure 5. USSR: Plants for Production of Large
Reinforced Concrete Panels for Con-
struction of Housing (Photographs) .
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PROSPECTS FOR CONSTRUCTION OF HOUSING IN THE USSR*
1961-65
Summary and Conclusions
The USSR has pledged to eliminate its persistent shortage of urban
housing some time between the end of 1967 and the end of 1969. It is
estimated that this long-term program will be fulfilled by the end of
1969 if the Soviet government elects to expand substantially the
planned volume of construction of housing during 1961-65 by supple-
menting the funds for planned construction and then continues this
high rate of growth through 1969. Expansion to obtain the required
amount of housing probably can be achieved without jeopardizing other
major goals for construction during 1961-65. The exceeding of the
general construction goal of the Seven Year Plan (1959-65) is expected
to provide the flexibility for this option.
The long-term program of the Khrushchev regime is the most binding
commitment on housing that any Soviet leader has ever made.** The
housing program, a keystone in Khrushchev's over-all program for the
consumer, was formulated between December 1956 and mid-1957 by planners
acting under urgent instructions to seek ways to increase the volume
of construction of housing. The first phase of the program, 1957
through 1960, was completed successfully as state housing, assigned
a high construction priority, exceeded its target and as private
builders nearly fulfilled a substantially increased quota for private
housing. The high priority for state housing caused excessively high
unit costs during this period and probably was indirectly responsible
for lags in other construction, including some projects for heavy in-
dustry. The success of the 4-year program was minimized, however, by
the failure to fulfill the 1960 plan. State housing was only slightly
* The estimates and conclusions in this report represent the best
judgment of this Office as of 15 May 1961.
** Soviet leaders apparently will consider their housing pledge ful-
filled when the average housing per capita reaches 9 square meters
(97 square feet) of living space, the minimum sanitary norm. Alterna-
tively the pledge may be considered fulfilled when each household has
a separate dwelling unit. This Objective could be reached somewhat
earlier because the government will be partly successful in its at-
tempts to minimize the size of the average apartment so that each
person will be allocated only 7 square meters (75 square feet) of
living space.
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below the 1960 target, but its growth dipped far below the rate of
preceding years. Private housing, affected by termination of state
loans during the second half of 1960, was underfulfilled by one-third.
The prospect for 1961-65 is that the planned volume of state and
private housing will be exceeded by about 25 percent, based on an
analysis of housing needs, capabilities for construction, and recent
government policies. Because the planned annual volume of construc-
tion of housing is to be held at the 1961 level and because increases
in urban population and the razing of large amounts of existing hous-
ing will offset much of the gain from new construction, the planned
5-year improvement in housing would not be adequate to keep the long-
term housing program on schedule. During this period the government,
however, will have the construction capacity to expand state housing
substantially, inasmuch as the requirements for the housing plan are
modest relative to the rapid !growth foreseen for the Soviet construc-
tion industry. Faced with urgent needs for housing in the past, post-
Stalin regimes have insured the fulfillment of their housing goals
while countenancing lags in industrial construction.
Although clearly feasible, acceleration of construction of housing
nevertheless would again produce old problems stemming from the
government's paradoxical objective of building more and better quality
housing more quickly and more Cheaply. Difficulties in the supply of
materials and skilled labor will continue, improvement in the quality
and convenience of apartments will be difficult to effect, and unit
costs will be higher than planned. Each of these phenomena will add
to the planned cost of the program.
A noteworthy feature of construction during 1961-65 is the pro-
jected transition to the "large-panel" method of construction of hous-
ing,* a change that will introduce new problems. Although by early
1961 this method had not yet passed all tests of engineering and eco-
nomic feasibility, it is to account for almost two-thirds of construc-
tion of state housing during' 1965. Lags in the modest plans for large-
panel construction through 1960 have been caused by delays in develop-
ing standard types of panels and in the delivery and installation of
equipment at factories for their production, delays that probably will
persist. It is expected, however, that the deficiencies in large-panel
construction will be offset by the adequate supplies of brick, cur-
rently the predominant wall material for state housing.
Problems in private housing will continue to revolve around the
conflict between governmental aversion to private construction and
* This method involves the use of factory-produced story-height con-
crete panels in exterior and transverse walls. (See III, D, p. 10, below.)
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the strong popular demand for individual houses. The government's act
to halt loans to private builders in the fall of 1960 was a resumption
of former policies to hold down the volume of private construction.
The inability of the government to sustain its former policies and
the absence of any reference to the duration of the recent ban on
loans suggest that the question of reinstating governmental support
is still open. The eagerness of private builders and the annnal in-
creases in the availability of the needed materials, coupled with
pressures created by a continuing housing shortage, probably will
force the government to permit private construction to fill out that
part of the housing program which state construction will be unable
to carry out.
The longer term prospect for housing is that new problems may
emerge at the very time that the government claims to have eliminated
the housing shortage on the basis of current criteria. By that time,
ironically, Soviet citizens may well be more vocal in their dissatis-
faction with housing conditions than they are at present. The small
apartment units, the drab architecture, the high concentration of
population in the apartment developments, and the poor quality of con-
struction are now considered unattractive but economically necessary.
These conditions may be considered unacceptable by the new generation.
Mikoyan probably was right when he observed that as new housing be-
comes increasingly available, more demand for housing is stimulated
than is satisfied.
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I. Introduction
The major objective in studying Soviet housing is to determine the
prospects for the solution to the long-standing shortage of urban
housing* in the USSR. The focus of this report is on the problems
and prospects for new housing during 1961-65, and primary considera-
tion is therefore given to economic and technical aspects of such
construction. In order to evaluate these aspects better, however,
account also is taken of political influences, as reflected by the
fluctuations in Soviet governmental policies toward housing during
the past decade.
A. Review of Policies on Construction of Housing, 1953-60
1. Policies of Stalin and Malenkov
The policy of a low priority for housing during Stalin's
tenure gave way under Malenkov to a clear, public recognition of the
severe housing shortage and an effort to reduce the shortage by
sharply increasing allocations for construction of housing. In spite
of the achievement of modest increases in new housing during his ten-
ure, Malenkov was made the unnamed target of Khrushchev's speech at
the Builders' Conference in December 1954. In that speech, Khrushchev
thundered that construction -- and construction of housing in partic-
ular -- was being poorly managed.
2. Khrushchev's Initial Policy
Khrushdhev's views on how to deal with the housing pro-
gram differed significantly from the measures taken under Malenkov.
* This report deals only with construction of urban housing, the two
broad categories of which are state and private housing. About 90
percent of state housing is paid for out of budgeted funds and is
built by state contract construction organizations in accordance with
the state plan; the balance of state housing is paid for out of funds
belonging to factories and enterprises and is built by construction
forces subordinate to those organizations. Private housing generally
is built by future owners, about half of whom receive state loans for
the purchase of materials and the other half of whom use their own
savings.
Rural housing is viewed as a separate and subordinate problem by
the Soviet planners. Announcements of goals and plans for housing
in the USSR either exclude rural housing or give only bare details.
During the Seven Year Plan (1959-65), 7 million rural houses are to
be built, nearly one-third of the total number of new dwellings
planned during 1959-65. Rural housing is built privately and re-
quires a minimum of state-allocated resources.
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Instead of assigning more resources for more housing to be built ac-
cording to conventional design, Khrushchev recommended that methods
for construction of housing be revised radicsJly. He asserted that
"industrialized construction" was the answer to the problem of sharply
increasing the volume of housing with a reasonable increase in the
expenditure of manpower and scarce materials. This method relies on
extensive use of large factory-produced structural components and
suitable erection equipment for the mass construction of housing ac-
cording to standardized designs.*
Believing that industrialized construction would quickly
produce more housing more cheaply, Soviet planners in drawing up the
original Sixth Five Year Plan (1956-60) programed the construction
of virtually twice the volume of housing completed during the preced-
ing 5 years but increased allocations of funds for construction of
housing by only about 50 percent. Poor results in 1956 indicated that
the calculations underlying the planned program were erroneous and
that difficulties would mount in meeting goals for the volume of hous-
ing without substantial supplements to planned construction funds.
3. Decision of 1956-57
Dissatisfaction with the progress of construction of hous-
ing in 1956 was openly and widely expressed in the Soviet press. Toward
the end of the year, broad hints appeared in Pravda and outright state-
ments in Izvestiya that goals for construction of housing in 1957 and
later years would be raised sharply. A pledge to seek out ways to in-
crease housing was one of the main features of the report on the
Plenum of the Party's Central Committee that met in December 1956. In
August 1957 the Soviet government proclaimed its general objective of
the elimination of the housing shortage within 10 to 12 years, as well
as detailed plans for constlruetion of housing in 1957-60, the first
phase of this program. The key provisions of the plan for 1957-60
were (a) a substantial increase in funds for a virtually unchanged
volume of construction of state housing and (b) a one-third increase
in the expected volume of private housing. The policy adopted under
Khrushchev's administration was, in major respects, an extension of
the Malenkov policy.
B. Accomplishments During 1957-60
The planned volume of housing in the first phase of the new
program was achieved, with 'state housing exceeding the plan by 6 per-
cent and private housing falling short by 11 percent. In 1957 and
1958 the annual plans were substantially exceeded, as state housing
* See III, D, p. 10, below.
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received a high priority and private builders were strongly supported
and encouraged by the government. In 1959 the plan for state housing
was slightly exceeded and in 1960 was slightly underfulfilled, whereas
private housing was somewhat below plan in 1959 and one-third less
than planned in 1960. These recent shortfalls in private housing
probably reflect the gradual cooling of the government's attitude
toward private construction after 1958, culminating in the announced
termination of loans for private builders in the fall of 1960.
Going into the second phase of the housing program, 1961 to
1965, the Soviet government is guided by the goals of the Seven Year
Plan. It is the purpose of this report to examine how these goals
fit in with the long-term goal, the problems that might arise in con-
struction of housing, and the prospects for new housing during 1961-65.
II. Goals for Urban Housing
The long-term goal of the USSR is to eliminate the shortage of
urban housing some time between 1967 and 1969, but Soviet authori-
ties have not specified as yet what is meant by the elimination of
the housing shortage. At the maximum this goal would require attain-
ment of a level of housing at which urban residents will have an aver-
age of 9 square meters (sq m) of living space.* This space concept is
the standard sanitary norm for housing described in Soviet publications.**
Although the Seven Year Plan calls for an impressive volume of con-
struction of urban housing, the plan seems to fall far short of provid-
ing a rate of construction consistent with the needs of the above-
identified long-term goal. To meet the plan, it is estimated that about
20 percent more housing would have to be built during 1959-65 than is
called for in the Seven Year Plan. Otherwise the average of 9 sq in
would not be attained until well beyond 1970, unless a staggering
housing program were to be undertaken during 1966-69.
* Living space includes only living rooms and bedrooms. Living space
plus all other interior apartment space -- kitchen, bathroom, closets,
and hallways -- comprise total space. One square meter equals 10.8
square feet.
** Alternatively the housing shortage might be considered as elimi-
nated when each family in the USSR has its own separate quarters. Such
a goal could be achieved more easily than that of providing an average
of 9 sq in of living space per resident. The new one-family dwelling
units are designed with an average of about 7 sq m of living space
per person, but the actual average probably will be somewhat higher,
although not so high as 9 sq m.
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A. Housing Goals of the Seven Year Plan (1959-65)
The Seven Year Plan (1959-65) calls for construction of 15 mil-
lion urban dwelling units with a total floorspace of 650 million to
660 million sq m. 1/* Of these amounts, 10 million apartments with
a total floorspace of 424 million sq m are to be built by state or-
ganizations, 2/ and the balance of 5 million houses with a total space
of about 230 million sq m is expected to be built by private individ-
uals. Expenditures under the state plan are to amount to 323 billion
rubles. ** 3/
B. Improvement in Housing, 1959-65
The planned amount of new housing is to increase the stock of
urban housing by 60 percent during 1959-65. Li/ In terms of total
space this construction would yield a gain from about 780 million sq in
at the end of 1958 to about 1,250 million sq in at the end of 1965.***
When converted from total,space to living space and related to the
estimated urban population in both years, these amounts of housing
provide for an average per capita living space of 5.1 sq in at the end
of 1958 and 6.6 sq m at the end of 1965.t
Urban housing per capita, according to these estimates, will
increase by 29 percent during 1959-65, an average annual growth of 3.7
percent. The use of this irate of growth to extrapolate the 6.6 sq in
of urban living space at the end of 1965 indicates the virtual impos-
sibility of attaining an average of 9 sq m by the end of 1969. Thus
** Ruble values throughout this report are in constant 1955 rubles
(pre-1961 exchange rate). The ruble-dollar ratio for construction of
housing in 1955 was approximately 7 to 1.
*** These data imply a very high rate of withdrawal from the exist-
ing stock of housing. the
effect on housing conditions of the need to raze large amounts of
housing during 1961-65.
t These figures on urban living space in the USSR may be compared
with the following estimates for other countries:
Country
Year
Square Meters
US
1960
28
UK
1956
20 to 22.5
West Germany
1956
15
Czechoslovakia
1956
11
Because these estimates are based on incomplete data expressed in
varying units of measure, any comparison based on these figures is
necessarily a broad one.
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it seems valid to conclude that the rate of increase in the level of
urban housing implicit in the Seven Year Plan is not consonant with
the rate required for the attainment of the maximum long-term goal.
An adequate rate of improvement of housing would be difficult
to establish with precision because of the broad assumptions underly-
ing the above methodology. The magnitude by which the present plan
for construction of housing falls short of the needs for the long-
term goal, however, can be estimated broadly. By increasing construc-
tion of new urban housing to a volume 20 percent higher than called
for under the Seven Year Plan and continuing that higher rate of in-
crease through 1970, 9 sq m of living space per capita would be at-
tained by 1970.
III. Program for Construction of Housing
The program for construction of housing planned for 1961-65 dif-
fers from earlier housing programs in four important respects: the
rate of growth, the scheduling, the role of private construction, and
the methods of construction. In one respect -- the poorly planned
allocations of funds -- the program is similar to its predecessors.
These features of the program, as shown in the chart, Figure l,* and
as outlined below, will be evaluated in the subsequent discussion of
problems and opportunities and the prospects for the housing program.
A. Rates of Growth
The most noteworthy feature of the housing program for 1961-65
is that the 5-year cumulative rate of growth is to be less than one-
half of the rate of growth achieved in the preceding 5 years. The
rate of growth in construction of state housing is to drop even more
abruptly, to 37 percent of the rate achieved during 1956-60, while
the rate for private housing is to drop to 45 percent. The percent-
age increase in construction of urban housing in one 5-year period
compared with that in the preceding 5-year period is shown in the fol-
lowing tabulation:
Percentage Increase
Period
Total
State
Private
1951-55 - 1956-60
117
101
164
1956-60 - 1961-65
57
37
74
* Following p. 10.
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B. Scheduling
As the current housing program is scheduled, the trend is
for construction to level off and form a plateau, thus differing
radically from the sharp upward trend between 1956 and 1961, as shown
in the chart, Figure 1.* This difference is illustrated by the fact
that in 1961 the volume of construction is planned to be 96.2 million
sq m of total floorspace, 2/ virtually the same as the annual average
of 97.8 million sq m planntd during 1961-65. During 1956-60, on the
other hand, the average annual volume of construction amounted to
61 percent more housing than was built in the first year of that
period.
C. Role of Private Construction
The importance of private construction in the housing program
is much greater than Soviet officials would like to admit, and accord-
ing to the current plan the role of private housing is to increase.
During 1961-65, private builders are to account for 36 percent of new
urban housing space. During 1956-60, private individuals completed
31 percent of the new urban housing built, but during 1951-55 the share
of private builders had been only 26 percent.
D. New Methods of Construction
A key feature of the program for state housing during 1961-65
is the planned shift in construction to the large-panel method and
away from brick construction. In the new method, exterior and trans-
verse walls of apartment houses are erected from story-height panels
of precast reinforced concrete 0.2 to 0.3 meter thick, as shown in
the photographs in Figure 2.* This material is to take the place of
brick, which has been used in walls averaging more than 0.6 meter
thick.
The extent of the planned shift to the large-panel method is
shown by the fact that 63 percent of state housing in 1965 is to be
built by the new method, compared with less than 3 percent in 1960,
and by the 50-fold increase envisioned for large-panel construction
between 1959 and 1964. g Brick construction, on the other hand, is
to decline to 10 percent of new state housing in 1965 compared with
a planned share of 55 percent in 1960, as shown in the chart, Fig-
ure 3.*
* Following p. 10.
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. A111.1ib-an Housing
Ho sing-rBuilt by State and
lairSeirtive Organizations
11.5
1957
1956
31652 5-61
1958
1959
1960
1961
1962
1963
Housing Built by
Private Individuals
1964
Estimated Yearly Volumes
According to Seven Year Plan
Figure I. USSR: Actual and Estimated Volumes of Construction of State and Private Housing, 1956-65
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.
Field-weld joining external and transverse panels.
31653 5-61
Large-scale experimental construction in Moscow.
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Units completed in 1960 in Moscow.
Figure 2. USSR: Construction of Housing by the Large-Panel Method
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100% 100% 100% 100% 100% 100% 100%
-
52%
3%
7%
????
I.
19%
rg/
35%
49%
57%
VI/
63%
31722 5-61
1959 1960 1961 1962 1963 1964 1965
Figure 3. USSR: Planned Shift in the Method of Construction of State Housing, 1959-65
WALL MATERIALS
ri Other
Brick
Wooden
riLarge concrete
panels
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IV. Problems and Opportunities in Construction of State Housing*
The realism of the current Soviet housing program depends both
on the conditions governing construction in general and on the spe-
cific problems affecting construction of housing. Within this frame-
work a problem is considered to be any factor which has a bearing
on the amount of housing that can be built during 1961-65.
A. Problems in Construction of State Housing
Most former problems in construction of state housing have
stemmed from the Soviet leaders' paradoxical dictum that more hous-
ing be built more quickly, more cheaply, and more durably. All evi-
dence points to the Soviet planners' adherence to that decision in
setting forth the state housing plan for 1961-65.
1. Major Problems
a. Changes in Methods of Construction
By programing the rapid and far-reaching transition
to large-panel housing (see the chart, Figure 3**), Soviet planners
have placed a heavy reliance on a construction method that Soviet
engineers have not yet developed to the point where it is technically
sound for economic mass-scale construction. If the method falls far
short of yielding either the expected high volume of construction or
the reductions in cost and time required for construction, important
revisions would have to be made in the housing program. Difficulties
in making the changeover to large-panel construction were experienced
in 1959 and 1960 and are expected to continue.
The basic reason for the early lags in large-panel
construction has been the slowness to develop and standardize suitable
products and erection techniques. As late as mid-1960, competing re-
search and development organizations were attempting to gain accept-
ance of their package proposals for the design of panels and manufac-
turing equipment. At that time, some of these proposals still re-
quired substantial engineering study. Several designs of apartment
houses calling for specific types of panels were accepted in 1960,
and one type (see the diagram, Figure )+***) was recommended late in
1960 for wide adoption. 1/ There is no indication, however, that a
* Because construction of housing by state contractors and private
individuals differs widely in many important respects, each form of
construction will.be discussed separately.
** Following p. 10, above.
*** Following p. 12.
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decision has been reached to settle on two or three basic methods so
that the manufacture and erection of large panels can be put on a
mass-production basis.
Factories to produce large panels have not been built
on schedule, and further difficulties in boosting production are ex-
pected. In 1959 and 1960, less than one-half of the planned capacity
was completed. Moreover, some of the
equipment delivered to the new factories is of poor quality and that
the capacity of completed factories has been overstated. A major
obstacle to the completion of the new factories has been uncertainty
about their equipment requirements. Another obstacle has been the
reportedly complete lack of coordination of the 60 plants collec-
tively engaged in the mass production of equipment for the new fac-
tories that will produce the large panels (for photographs of these
plants, see Figure 5*). ?/
In the light of these difficulties, it is not sur-
prising that construction of housing by the large-panel method has
fallen abort of expectations. In 1960, only 1.5 million sq m of
large-panel housing was built, out of a planned total of more than
4 million sq in. 2/ Construction by the large-panel method has been
of poorer quality and has cost more than was expected. lc/
The problems carried into 1961 appear to be so severe
that they probab1y will continue to limit large-panel construction
for at least a year. If vigorous corrective measures are not under-
taken soon, the longer term schedule for large-panel housing may be
jeopardized. It is possible that only as little as one-half of the
programed large-panel construction will be completed during 1961-65.
b. Quality of Construction
Needed improvements in the quality of new Soviet hous-
ing are expected to retard construction, raise labor requirements, and
increase construction costs. In four respects -- basic structure,
finishing work, equipment, and design --
their housing is of inadequate quality.
Improvements in the basic structure of Soviet apart-
ment houses can be made rapidly but will require greater care in
erection and, therefore, more time and labor per unit of construction.
Brick exterior walls, for example, generally are laid with poorly
pointed mortar joints that deteriorate from exposure to freeze and
thaw. This deterioration results in higher expenditures to face the
* Following p. 12.
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50X1
50X1
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Fr4
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o
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/.0 4.10/
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Figure 4. USSR: Steps in One Method of Assembly of Large-Panel Apartment Houses
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Experimental production of waffle slabs in horizontal molds
mounted on a conveyor system.
31724 5-61
Extraction of a panel from upright molds at a Moscow plant.
Production of panels by the use of upright molds.
?
Figure 5. USSR: Plants for Production of Large Reinforced Concrete Panels for Construction of Housing
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exterior wall with tiling or in higher maintenance costs if the brick
is left exposed. Similarly, greater care is needed in producing
panels for large-panel construction with a smoother surface and fewer
cracks. Moreover, the erection crews will have to strengthen the
welds tying the panels together and improve the caulking of the joints.
The long-criticized finishing work -- flooring, mill-
work, glazing, painting, tiling -- has continued to be poor not only
because of low-grade materials and a shortage of skilled workers but
also because of inadequate allocations of funds and pressures on
loo-1 officials to turn housing over for occupancy before the com-
pletion of construction. In order to improve the quality of new
housing as intended, the state's contractors will have to expend sub-
stantially more labor and time on the finishing of apartments.
Substantial increases in equipment and refinements
are programed for Soviet housing in 1961-65. More kitchen and bath-
room equipment and piping and duct work will be required for the
single-family apartments, and the trend toward a higher proportion
of masonry construction with plumbing and central heating facilities
will combine to generate upward pressure on construction costs.
New apartment houses and apartment units have been
designed for maximum economy, so that any changes in designs would
tend to slow construction and raise costs. The apartment houses
are drab, completely functional structures, and the units have been
designed extremely small in order to accommodate the maximum number
of families.* Architects and citizens have already raised complaints
about the new housing, and pressures may mount for more attractive
structures and more spacious apartments. 11/
c. Supply of Construction Resources During 1961-65
Problems in the supply of building materials and labor
will be difficult during the early part of the period but will ease
greatly during the later stages. This trend is accounted for by the
fact that more state housing is planned for 1961 than the average an-
nual volume planned for 1961-65 and that construction resources will
be increasing from year to year. The gradual easing of the supply
situation by 1965 is shown in Table 1.**
* The one-family apartment is a distinct improvement over the old-
style communal apartment that houses three or four families each in a
separate room and provides a common kitchen and bathroom. The very
small size of the new units, however, is an irritant which is aggra-
vated by the fact that the typically massive furniture preempts an
inordinate share of available living space.
** Table 1 follows on p. 14.
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Table 1
USSR: Estimated Share of Construction Resources
Required for Planned State Housing 2/
1958-60 Average and 1965
Percent
Re source
1958-60
Average
1965
Cement12/ 35 20 to 25
Precast concrete products 50 to 55 40
Steel 2./ 3 2
Workers 30 25
Monetary expenditures 30 to 33 20 to 25
a. The share of resources allocated to housing is to decline
roughly on a straight-line basis between 1960 and 1965 ac-
cording to the schedule implied by the Seven Year Plan.
b. This estimate takes into account the cement used in pre-
cast concrete products and in mortar as well as the cement
used in pouring concrete on site.
c. This estimate takes account of structural steel, pipe,
miscellaneous steel, and all reinforcing steel except the
amount used in precast concrete products.
The supply of cement and large concrete panels is ex-
pected to produce the most critical problems for housing, whereas
brick is expected to be in oversupply. Cement will be particularly
scarce in 1961 but gradually less so in subsequent years. The prob-
lems in supply of large concrete panels are expected to persist and
possibly to become worse during the entire 5-year period. Any short-
age in large panels could be made up by reverting to brick construc-
tion. Although brick was the predominant wall material in state
housing until 1961 and although steady gains have been made in pro-
duction, the use of brick is scheduled to be sharply curtailed, so
that state housing is to require by 1965 only about 20 percent of
the amount of brick required in 1960 and 1961.
Labor supply will constitute a problem during most
of 1961-65 but probably not a serious one. The scheduled reductions
in labor requirements per unit of state housing possibly will not be
realized if the new methods in construction are not adopted as rapidly
as planned. However, because the labor force had been built up during
the drive on housing in 1957-60, a pool of experienced workers will
be available should the need for them arise.
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(
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d. Construction Costs
Continued inability to reduce costs as planned is
expected to be an obstacle to construction of state housing during
1961-65. Past experience and anticipated conditions during these
years make it likely that expenditures per unit of housing will be
appreciably greater than planned.
Past trends show that Soviet plsnners unrealisticarly
estimate the cost of construction of housing not only for long periods
but even for the following year. During 1956-60, for example, unit
costs averaged at least 25 percent greater than planned. During both
1958 and 1959, unit costs exceeded planned costs by 8 percent. 12/
Conditions during 1961-65 are expected, on balance,
to keep costs higher than planned. As discussed above, upward pres-
sures are to result from the trends toward a better quality of con-
struction, from difficulties in effecting the program for large-panel
construction, and from the fact that apartment house developments will
be located at increasing distances from central sources of supply. The
accelerated formation of housebuilding combines* and tighter financial
controls are operating to reduce costs, but it is believed that plan-
ning officials have given unwarranted weight to the latter factors and
have tended to ignore those factors that will keep costs high.
Although it seems clear that actual costs will exceed
planned costs, the degree of excess is difficult to estimate. The
anticipated conditions, viewed in the perspective of results during
the past 5 years, make possible the judgment that housing costs during
1961-65 will be about 10 percent higher than planned.
B. Significance of Problems
The major problems discussed above are not serious enough to
impede the fulfillment of the relatively easy goal for state housing
during 1961-65, but they will force the Soviet government to use
greater amounts of labor and materials than planned. The need to ex-
pend more resources per unit of new housing, moreover, will impose
limitations on the amount by which Soviet leaders could reasonably
choose to increase the planned volume of housing.
* Better coordination of construction is expected from the house-
building combines that produce, transport, and erect precast concrete
components. These functions formerly were divided among a number of
organizations, none of which had full responsibility for the cost and
quality of the housing built.
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There appear to be three alternative levels of construction
of state housing from which the Soviet leaders may choose, as follows:
1. The volume of housing called for under the Seven
Year Plan.
Construction during 1959-65 is to amount to
424 million sq m of housing, 313 million sq m of which would be built
during 1961-65. The annual average volume would remain unchanged from
the volume planned for 1961. Estimated funds expended during 1959-65
would be 30 percent of the funds allocated for construction during the
Seven Year Plan and would exceed the planned expenditures by 10 percent.
2. A volume of housing 25 percent greater than that
called for under the Seven Year Plan.
Construction during 1959-65 would amount to
530 million sq m of housing, about 420 million sq m of which would
be built during 1961-65. The volume of construction would grow 12
percent per year starting in 1961. Estimated funds expended during
1959-65 would be 35 percent of the funds allocated for construction
under the Seven Year Plan and would exceed the planned expenditures
on housing by 30 to 35 percent.
3. A volume of housing substantially higher than called
for under the Seven Year Plan.
For each increase of 20 million sq m above the
25-percent increase, the expenditures would increase by 18 billion
to 20 billion rubles, and the share of the funds allocated for con-
struction under the Seven Year Plan would increase by about 2 percent.
The choice of the Soviet leaders of one of these alternatives
will be influenced by the considerations of cost outlined above. Other
factors, including requirements for construction in other sectors and the
role of private construction, also will have to be taken into account.
V. Problems and Opportunities in Construction of Private Housing*
The abrupt termination of governmental loans for private construc-
tion in the latter half of 1960 promoted the problem of private housing
* Private housing is built in spare time by individuals, half of
whom use their own savings and half of whom receive financial aid from
state banks or enterprises. The loans are in amounts up to 10,000
rubles, repayable over 7 years at 2-percent interest. The loan may
not exceed 50 percent of the cost of footnote continued on p.
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to one of the critical questions concerning the housing program dur-
ing 1961-65. This policy, if continued, could have the effect of
canceling 15 to 20 percent of the urban housing scheduled to be built
during those years. Most past problems associated with private hous-
ing have stemmed from the state's repugnance to the anomaly of private
construction in a Communist-oriented society, while other problems
have resulted from the scarcity of resources.
The role of private housing has varied in accordance with economic
and political pressures. For example, in 1956, Soviet officials out-
lined to US housing delegates their government's plans to reduce the
share of private housing from about 30 percent of construction of urban
housing in 1955 to 15 percent in 1960. The Soviet decision in 1957 to
permit 40 percent of the peak construction of housing in 1960 to be
produced under the auspices of private housing illustrates both the
urgency of the housing program and the state's inability to meet it
with only state resources. A similar reversal could be made during
1962-65, When pressures on the housing program are expected to mount.
A. Factors Influencing Construction of Private Housing
Calculations of the potential construction of private housing
must take into account the limits of demand and resources and the ef-
fect on state construction projects. It is impossible to estimate how
much private housing will be built, however, without being able to pre-
dict the government's decisions on private construction. Some insight
into possible decisions is gained from manifestations of the govern-
mental attitude.
1. Governmental Attitude
After supporting and encouraging private builders in 1957
and 1958, when the goal for private housing was substantially exceeded,
the government gradually cooled toward private construction. In 1960*
the government's attitude grew increasingly antagonistic, and in the
fall of that year the Communist Party press launched bitter attacks on
the house. Minimum control over private construction is exercised by
the local soviets, banks, and the individual's enterprise. The enter-
prise, in addition, offers technical advice and helps deliver materials
to the site. Private houses can be sold or rented, and they can be
willed to descendants. The land, however, remains the property of the
state, to which the individual pays a nominal rent.
* It should be noted again that in 1960 the goal for private housing
was underfulfilled by one-third.
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private housing, striking hardest at the development of "a private-
property psychology ... deeply hostile to socialism." 131
Specific points of criticism included speculative build-
ing, corrupt acts of officials, pilferage of materials, diversion of
public funds for the rental of private property, and "parasitism."
"Parasites" were the worst offenders because they received income
without working and thus lived in opposition to Communist precepts.
Other more practical reasons underlie the government's
repugnance toward private housing. First, it is more difficult to
schedule, manage, and control a massive program for construction of
private housing, both at the national and at the regional level, be-
cause home-builders working in their spare time are not subject to
the plan. Second, Soviet ideas on city planning are contradicted by
private housing. The plotted pattern of development in a city is
frequently broken by clusters or blocks of one-family dwellings that
are not in keeping with the architecture and long-term plans for state
housing and civic buildings. Third, the state will have to make higher
expenditures over the long term for utilities and communal facilities
in sections of private housing. Finally, the state's control and in-
fluence over the populace are loosened in the sections of private
housing, making mass communication more difficult, the marketing prob-
lem more complex, and such programs as civil defense less manageable.
2. Demand for Private Housing
The effective demand for private housing, although not
limitless, appears to be strong enough to support the scheduled volume
of construction during 1961-65. Personal funds continued to accumulate
in savings banks during recent years when private housing was increas-
ing most rapidly. Funds in savings banks alone at the end of 1960 are
estimated roughly to be seven to eight times the amount required for an
average year's construction scheduled duping 1961-65. The other ingre-
dient of effective demand -- the will of the individual -- also appears
to be easily adequate for the amount of scheduled private construction.*
3. Resources
The basic resources required for construction of private
housing -- materials, labor, and land -- will he available in adequate
* Westerners have wondered at the display of zeal shown by private
builders in the USSR, who apparently are motivated by other than eco-
nomic considerations. The average cost of a private house is esti-
mated to be the equal of more than 60 years' rent for an apartment of
the size of the average unit to be built by the state during the
Seven Year Plan.
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amounts on a national basis. Because the receipt of materials at
construction sites and the allocation of building lots depend largely
on the benevolence of the government, problems in supply could severely
hinder private construction during 1961-65.
The major materials used in private housing are lumber,
stone, and brick, all of which could be supplied in amounts needed
for the construction scheduled or even for an expanded program. The
requirements for private housing, not ordinarily in conflict with
those for construction of state housing, will be progressively easier
to supply during the next 5 years as the state program reduces radi-
cally its use of lumber and brick at the same time that production
of those materials is to increase modestly.
The problem of acquiring a plot of land will continue to
Impede the private builder. Choice real estate will grow scarcer
owing to the spreading of construction of state housing to suburban
locations. Furthermore, local officials probably will exercise more
stringent control over private builders, who in the past have asserted
squatters' rights on land intended for the future construction of
state housing. 11.1/
B. Potential of Construction of Private Housing
The lower limit to the range of possible construction of pri-
vate housing during 1961-65 is the minimum volume to which the govern-
ment can confidently restrict such construction in the light of the
continuing severe housing Shortage. The upper limit is equally dif-
ficult to state. It is believed, however, that 200 million sq in, or
an average annual volume of 4o million sq m, of private housing could
be maintained during the coming 5 years if the government so desired.
This average is the amount that the government set for private housing
In 1960, presumably on reasonable expectations founded on calculations
of a smaller resource base than will exist during 1961-65.
VI. Prospects for Construction of Housing in 1961-65
The Soviet government will have a range of choice between the
achievement of the volume of construction of housing planned for
1961-65 and the achievement of a substantially greater volume. Major
influences on the government's choice will be the demand and capa-
bilities for construction of housing and the competing economic re-
quirements. Past decisions on housing appear to be the most valid
guide to the government's probable choice.
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A. Major Influences
Demand for housing in 1961-65, as implied by the government's
long-term housing goal, will total 600 million to 650 million sq m,
about 25 percent more than planned during this period. A profUsion
of eye-witness reports by Western travelers to the USSR and state-
ments by Soviet citizens attest to the need and demand for more hous-
ing. In a 1960 poll that ampled the opinions of a large number of
railroad passengers living,in all areas of the USSR, the Soviet press
found that more than one-half of those questioned identified housing
as their primary problem. 'Putting their feelings less objectively,
some Soviet citizens have i)ointed out grudgingly that there is a con-
tradiction between the government's ability to produce fine rockets
and its failure to providelthem with decent housing.
Potentially the current housing program could be expanded
rapidly by supplementing the planned resources for construction of
housing and raising its priority relative to other construction. A
25-percent expansion in accordance with the implied demand of the
long-term goal, for example, would raise outlays for construction of
housing to about 35 percent of that for state construction under the
Seven Year Plan and would involve the ideological cost of permitting
private housing to exceed ,the planned volume by 10 to 15 percent.*
The hypothetical 50-percent expansion would be within the limits of
the resources at the command of the Soviet government, but the cost
of such an expansion would mean an increase for this sector to 40 to
45 percent of the total outlays for state construction under the Seven
Year Plan and would result in a need to permit construction of private
housing to increase by one-third.
If either of these alternatives were adopted, the economic ef-
fect would be softened by the favorable performance expected from the
Soviet construction industry, for it is probable that the over-all
goal for construction in the Seven Year Plan will be exceeded by 10 to
15 percent. Moreover, there apparently are no urgent needs to supple-
ment planned construction in other sectors. Even the added costs of
the hypothetical 50-percent expansion could be covered by a 15-percent
increase in the total outlays for state construction. An expansion of
this magnitude, however, would decrease markedly the flexibility of
the Soviet planners in coping with unforeseen problems and opportuni-
ties in construction of industrial and transportation facilities.
B. Past Pledges and Commitments
During the 8 years since Stalin died, Soviet leaders, some-
times vying with one another, have pledged to improve the level of
* See IV, B, p. 15, above, and V, B, p. 19, above.
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urban housing and have termed this end a "major politico-economic task
in the building of Communism." Toward that end the government has con-
sistently fulfilled its goals for construction of housing, even during
periods when other construction goals lagged. In 1953-55, for example,
the government supplemented planned funds for construction of housing
to overcome earlier lags in the housing program of the Fifth Five Year
Plan (1951-55), and many of the new installations planned for heavy
industry were not completed on time. When the original Sixth Five
Year Plan (1956-60) was revised, housing funds were increased substan-
tially, whereas the general scheme to develop industry in the eastern
areas was severely curtailed. In 1957 and 1958, when goals for hous-
ing were materially exceeded, some lags in construction for heavy in-
dustry were noted.
The past pledges have been extended by Khrushchev's widely
publicized goal of the elimination of the housing shortage by 1970.
In spite of the ambiguity of its wording, this goal is the most bind-
ing commitment on housing that any Soviet leader has ever made.
C. Probable Volume of Housing
All the above considerations indicate that the Soviet govern-
ment has built as much housing as it set out to do in the past and
that it will be able to build enough housing during 1961-65 to keep
pace with the needs of its long-term goal. On the above basis and
on the assumption that no major economic disruptions will take place,
it is estimated that the Soviet government will exploit its capa-
bility by adding 600 million to 650 million sq m of new housing dur-
ing this period.
The division of this total floorspace between state and pri-
vate construction will be influenced partly by political developments
but more importantly by the capability of the state construction indus-
try. It is estimated that the volume of state housing will reflect
the maximum share of state construction resources which Soviet plan-
ners feel that they can afford to allocate to housing without jeopar-
dizing other goals. This estimated volume ranges from 400 million to
450 million sq m.* It is estimated that private individuals will
build the balance of about 200 million sq m, a compromise between a
lower volume desired by the state and a higher volume that private
builders would build if permitted.
* In March 1956 a Soviet construction official stated that the USSR
would build 400 million sq m of housing between 1961 and 1965 accord-
ing to plan. 12/ For this figure to be compatible with the estimated
total outlay for state plan and other state housing, the figure stated
in 1956 would have to be increased by 5 to 10 percent.
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Beyond 1965, there appears to be no reason to doubt the
achievement of the long-term goal by 1970. Ironically, by the time
this goal is achieved, Soviet citizens may well be more vocal in
their dissatisfaction with housing conditions than they are at pres-
ent. For, as Mikoyan has recognized, when new housing becomes in-
creasingly available, more demand for housing is stimulated than is
satisfied.
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APPENDDC A
STATISTICAL TABLES
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Table 2
USSR: Construction of Urban Housing a/*
1946-65
Year
Million Square Meters 12/
Private Construction
as a Percent of
Total Construction
Total 2/
State and Cooperative
Construction
Private
Construction
1946-50
102.8
72.4
30.4
30
1951
27.6
20.3
7.3
26
1952
27.4
20.0
7.4
27
1953
30.8
23.2
7.6
25
1954
32.5
24.4
8.1
25
1955
33.4
25.0
8.4
25
1956
41.0 1/
29.5
11.5 1/
28
1957
52.0
38.5
13.5
26
1958
71.2
46.7
24.5
34
1959
80.4
53.2
27.2
34
1960 2/
85.0
58.0
27.0
32
1961 sy
96.2
63.8
32.4
34
1962 El
95.0
62.0
33.0
35
1963 e
97.0
62.0
35.0
36
1964 B/
99.0
62.0
37.0
37
1965 E/
102.0
63.0
39.0
38
* Footnotes for Table 2 follow on p. 26.
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Table 2
USSR: Construction of Urban Housing 2/
1946-65
(Continued)
b. One square meter equals 10.8 square feet.
c. Total space comprises all the interior space of dwelling units (bedrooms, living rooms, kitchens, bath-
rooms, corridors, closets). This measurement of construction of housing is used in announcements of plans and
plan fulfillment. A source of frequent confusion is the term living space, which is restricted to about
65 percent of the total space, as it includes only living rooms and bedrooms. Living space is the basis for
rental payments -- 1.32 rubles per sq m of living space per month -- and for calculating the cost and alloca-
tions to construction of housing.
d. In the data on 1956 and subsequent years the total of urban housing includes housing built by private
individuals at state farms, machine tractor stations, tractor-repair stations, and timber enterprises. In
order to make the series comparable, the annual volumes of private housing built in 1951-55 would have to be
augmented by an estimated average of 2 million sq m per year.
e. 12/
f. Planned for 1961. lY
g. The total volume of construction of housing during 1962-65 is derived by reducing the goals of the Seven
Year Plan (1959-65) by the amounts of housing built and planned during 1959-61. Planned annual volumes of
state housing are estimated at the average of the 4 remaining years. It is estimated that the volume of con-
struction of private housing is planned to rise gradually between 1961 and 1965.
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Table 3
USSR: Expenditures on Construction of Urban Housing
by State.and Cooperative Organizations
and the Share of Total Expenditures Devoted to Housing 2/
1946-65
Housing as a Percent
Expenditures of Total State
Year (Billion 1955 Rubles) Construction
1946-50 44.0 20
1951-55 104.5 25
1956
29.5
26
1957
41.7
32
1958
48.8
33
1959
52.7
31
1960 12/
56.0
N.A.
1961 2/
55.7
N.A.
1959-65 Plan I/
323.0
27
b. Estimated.
C. Plan. 22/
d. 21/
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Table 4
USSR: Cost Factors in Planned Construction of State Housing a/
'Selected Years
1953-65
Average Cost Per Square Meter
of Living Space
(Rubles)
Year Planned
1953 N.A.
1956 N.A.
1957 N.A.
1958 1,351 2/
1959 1,298
1960 1,310 12/
1961 1,317 1/
1965 1,173 ,1/
Actual
Index of Average
Actual Costs
(1956 = 100)
N.A. 76 12/
1,429 E/ 100
1,486 2/ 104
1,454 1/ 102
1,400 12/ N.A. 11/
N.A. N.A.
N.A. N.A.
N.A.
N.A.
a. Planned state housing comprises about 90 percent of all con-
struction of state housing. The balance, noncentralized state hous-
ing, costs 10 to 15 percent more per sq m of living space.
50X1
c. d. If/
e. 25/
f. 2_/
g. 22/
h. At/. The figure for actual cost in 1959 is preliminary and
therefore is not used in
the index of costs.
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