Experts believe Moscow is highly uneven in terms of residents’ distribution, workplace concentration, and the distribution of social and commercial infrastructure. This means, the capital is not comfortable for living. The ‘Institute of City Economics’ Foundation, HSE Graduate School of Urban Studies and Planning, and Thomson Reuters Company identified the main inconsistencies of the city’s spatial economics and suggested a recipe for a more harmonic structure of Moscow. The paper ‘Balance in an Unbalanced City’s Economics’, which is part of the study ‘The Archaeology of Periphery’, commissioned by the Moscow Urban Forum, was presented by Tatiana Polidi, Executive Director of the ‘Institute of City Economics’ Foundation, Analyst at the HSE Laboratory of Industrial Market Studies, at the roundtable discussion ‘The Future of Cities: a Place for Human Self-realization or Consumption of Human Potential by the City Economy?’.
A deserted downtown and overcrowded suburbs – is one of the main disproportions of Moscow, which are an obstacle for its development, said Polidi. In developed economies, downtown, as the best organized area, is usually the most populated and intensely built-up with residential buildings. And, on the contrary, the population density decreases considerably towards the suburbs.
In Moscow the situation is quite the opposite: the suburbs are overpopulated and downtown is empty (Fig. 1). The blue parabola illustrates population density in an ‘average’ city of a typical country with a market economy, Paris for example. The red parabola reflects the situation in Moscow. And the urban centre here is the area within the Third Transport Ring.
Figure 1. Population density distribution
Source: Tatiana Polidi’s presentation
Fig. 2 clearly demonstrates the contrast between Moscow and Paris. In the French capital, the further you go from the centre (horizontal axis, in km), the lower population density. In Moscow the situation is different. Two reference points for studying the population density were selected in the study – 1989 and 2010 (Fig. 2 and 3). Polidi found that after twenty years of market economy the settlement imbalance has only increased. Population density in the Russian capital still grows from the centre to the suburbs (Fig. 3).
Figure 2. Population density (person/hectare) depending on the distance from the centre (km): Moscow and Paris
Figure 3. Population density (person/hectare) depending on the distance from the centre (km) in Moscow, 1989 and 2010
Source: authors’ calculations based on the Public Cadastral Map and http://www.wikimapia.org/
Tatiana Polidi says suburban settlement is growing because Moscow is experiencing serious problems with bringing parcels of land into usefor construction, while the demand for them has been increasing continually over the years of market economy. As a result of this situation, the city periphery has become built up with taller and taller buildings. In Western countries, on the contrary, suburbs are low-rise.
This disproportion, characteristic for the Russian capital, is illustrated on Fig. 4. The left column shows distribution of areas between the downtown, former industrial zones, and other territories. The right column shows the distribution of workplaces in these areas. The city centre occupies only 5% of the city’s square, but 37% of all workplaces are situated there, which leads to huge centripetal transport and passenger flows, the researcher emphasized. Only 9% of workplaces are concentrated in 16% of industrial areas, which, according to the expert, means that these spaces are used inefficiently.
Figure 4. Concentration of workplaces in various areas of Moscow
Source: authors’ calculations based on the data by Rosstat and the Strategy of Moscow Socio-Economic Development by 2025
Together with the disproportions in settlement and workplace concentration, another imbalance has evolved in Moscow – in the provision of commercial and social infrastructure (Fig. 5 and 6). Cafes, restaurants, dry-cleaners’, shops, as well as hospitals and clinics are maximally concentrated in the city centre (a bright-red spot on Fig. 5 shows over concentration of these objects). But, as we move from the centre, the provision of social and commercial infrastructure (within walking distance) decreases considerably. ‘As a result, we get monotonous residential blocks, which are not provided with consumer services’, Polidi explains.
Figure 5. Provision of commercial and social infrastructure
The blue column on Fig. 6 represents the Moscow city centre, the red – space between the Third Transport Ring (TTK) and the Moscow Ring Road (MKAD), the green – everything beyond MKAD. The Provision of infrastructure, related to household services, retail trade, pharmacies, cafes and restaurants, is 2-3 times higher in the centre as compared with the periphery, says Polidi .
Figure 6. Provision of social and commercial infrastructure in Moscow
Source: authors’ calculations based on data from http://moscow.gks.ru/
In terms of pricing on the housing market and the quality of the urban environment, Moscow is also rather different from global mega-cities, the researcher says.
Prices for real estate usually reflect not only location, but a list of other factors, which include availability of social and transportation infrastructure, quality of the outdoor areas, access to downtown and availability of workplaces. The more differentiated these factors are, the higher the difference in prices.
In cities where residents can choose between districts differentiated in quality and price, which means that there are offers for any requirements, price differentiation will be higher – given that there is a balance between demand and supply. ‘In Moscow we have a supply market, and the prices there are formed not by a competitive system, but by the developers’, says Polidi.
Fig. 7 shows average price differentiation by districts in some cities in Russia and other countries. In mega-cities (New York, Los Angeles) average price differentiation is about 70%. Price differentiation is lower in London and Paris. The blue line on Fig. 7 shows differentiation between all districts, including downtown. The red line excludes downtown.
Figure 7. Pricing on the housing market and the quality of the urban environment
Sources: authors’ calculations based on data from: New York and Los Angeles – Hedonic versus repeat-sales housing price indexes for measuring the recent boom-bust cycle, 2010 (Dorsey, Hua, Mayer, Wang),Residential data report of The Real Estate Board of New York; Paris – http://www.french-property.com/; Moscow – Real Estate Market Monitoring, https://rosreestr.ru/wps/portal/; St. Petersburg – Bekar Real Estate Agency, http://www.becar.ru/district_stat2.php; Yekaterinburg – Urals Chamber of Real Estate Regional Association, http://upn.ru/analytics/1793/2013/5/14135.htm; Perm – KD Consulting Analytical Centre, http://analitika.kamdolina.ru/
Moscow, as the most developed among Russian cities, has the highest price differentiation on the housing market (by the way, Yekaterinburg is in a similar situation). In other cities the prices are almost flat,and indifferent districts housing costs are almost the same (Fig. 7). ‘This reflects the lack of variety from one districts to another and the monotony of the urban environment’, Polidi remarks.
Fig. 8 provides details on the situation in Moscow – average prices for housing depending on the distance from the centre (horizontal axis – distance from the centre in km). The red line reflects the level of price differentiation. The figure demonstrates that ‘price differentiation, which means differentiation of offers of housing of various quality, in different environments, etc, positively correlates with the level of prices’, Polidi explains. This means that in the areas with high prices – and this is usually downtown – the variety of offers turns out to be wider. But further from the centre the variety of market offers decreases, and housing becomes more monotonous.
Figure 8. Pricing on the housing market and the quality of the urban environment
Source: authors’ calculations based on data from Housing Market Monitoring and the Public Cadastral Map, Rosreestr
The authors of the research concluded that ‘in Moscow’s spatial logics’ they ‘see a cyclic mechanism of degradation in the urban environment’.
Figure 9. Cyclic mechanism of degradation in the urban environment
The high density of construction means residential districts are poorly provided with social and commercial infrastructure, since ‘all the space is taken up with apartments’. This leads to price tolerance for apartments to quality characteristics (prices are mainly flat). And this leads to lack of competition between developers in terms of quality. There is no advantage for them to invest more and compete in quality, when prices don’t depend on it. As a result, the developers create the same thing over and over again. This only worsens the monotony of residential blocks, and the circle closes (Fig. 9).
Tatiana Polidi suggested an algorithm which could make the Russian capital more comfortable and harmonious.
First, it would make sense to increase the density of residential blocks and concentration of population in the city centre (Fig. 10, left side; dotted line shows the opportunity). Ideally, it would be better to stop building new apartments between the Third Transport Ring (TTK) and Moscow Ring Road (MKAD) – the situation is already critical here, says Polidi. According to her analysis, apartments shouldn’t be built in former industrial zones. Finally, beyond MKAD it would be good to move to low-rise, nice looking and high-quality suburbanization.
Figure 10. Suggested scenario for Moscow spatial economic development
Another essential thing Polidi emphasizes is that the city needs a growing social and commercial infrastructure,. And this is mainly about the space between TTK and MKAD.
Speaking about housing prices, monotonous residential blocks should become the ‘bottom of the market’. Apartments there should cost less than in the ‘new city centre’, which will develop beyond MKAD, Polidi believes. This requires huge effort, organizational, administrative, political, as well as the creation of a transport infrastructure, which would connect the ‘new centre’ with the ‘old one’, she explains.
It also makes sense to reduce the disproportion in the distribution of workplaces in the city. Former industrial areas should be used more effectively for this purpose. For example, multi-functional innovation and creative clusters can be established there.
This will allow, at least partially, to re-direct the transport flows, which are going to the city centre in the morning. And, ideally, some part of the radial flows will be replaced by circular ones. That will considerably decrease the problem of traffic jams.