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Spatial Equilibrium? The Difference of Real Income, Housing Markets, and Migration Flows between Russian Cities

  • URBAN STUDIES
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Abstract—

The objective of the study is to assess, based on a case study of large Russian cities, the proximity of the country’s economic space to the conditions of spatial equilibrium, which is formed as a result of large-scale migration flows between cities and regions of Russia. To solve this problem, we assessed the real incomes of households of various composition with or without their own housing by Russian cities of different size. When calculating real income, nominal wages, the cost of the consumer basket and purchase or rental of real estate were taken into account. Low real incomes of households in cities with populations of up to 500 000 people incentivize migration to the Moscow agglomeration and other major Russian cities. Spatial differentiation of real incomes and, as a result, migration incentives increase sharply for young families with children, as well as for families without personal housing in their cities of origin. Migration to major urban agglomerations provides an increase in real household incomes that exceeds the growth in housing prices. Consequently, high household income level in the largest cities are complemented by higher housing affordability, which amplifies intercity disparities. The Moscow agglomeration is the most attractive to migrants, in particular, Moscow oblast, where two factors are combined: relatively inexpensive housing and the availability of the capital labor market. This encourages migrants to choose the “I live in Moscow oblast, but work in Moscow” lifestyle. At the same time, real household incomes increase sharply, and Moscow oblast is Russia’s main spatial imbalance zone. In addition, large-scale and stable migration flows do not lead to equalization of the real incomes of residents of cities of various size ranks, which indicates not a static, but dynamic spatial balance in the country.

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Notes

  1. https://www.habitat.org/sites/default/files/documents/SDG%20Progress%20Report_0.pdf.

  2. This paper does not consider the option of purchasing an apartment without a mortgage. At the same time, it should be noted that when purchasing a home without a mortgage, regular (in a first approximation, monthly) withdrawal of part of income for accumulation of the required amount is required. In this case, the real income is calculated similarly to the case of a mortgage based on analysis of monthly nominal income and expenses.

  3. The cost of the consumer basket includes rent.

  4. For four types of households (one or two adults without children, two adults with one or two children), rental costs are assumed in a ratio of 1 : 1 : 1.25 : 1.5 (average monthly costs for renting a one-room apartment are taken at 1, costs for servicing a mortgage are taken at 0.8 : 0.8 : 1 : 1.2 (the average monthly HML payment is taken at 1) .

  5. https://www.raiffeisen.ru/about/press/releases/184520/.

  6. Including the regional capitals of Birobidzhan and Gorno-Altaisk with populations of less than 100 000 people.

  7. Cities of Khanty-Mansi Autonomous Okrug, Yamalo-Nenets Autonomous Okrug, Chukotka Autonomous Okrug, Nenets Autonomous Okrug, the Sakha Republic (Yakutia), Sakhalin and Magadan oblasts, city of Norilsk, Krasnoyarsk krai, including five cities with populations of less than 100 000 people.

  8. Rosstat data on the cost of renting apartments from individuals and cost per square meter of housing is supplemented by data from real estate market aggregators.

  9. https://cbr.ru/statistics/bank_sector/mortgage/.

  10. Housing in the city of origin may be illiquid for various reasons: relatives may be staying there (family circumstances most often prevent the sale of housing, it can be municipal or emergency), low demand on the local housing market does not allow it to be sold or rented out, etc. In this case, households will not be able to receive additional income from the possible sale or rental of their housing in the city of origin. More than half of nonresident home buyers in the Moscow agglomeration are residents of cities with populations of up to 500 00 people (Kurichev and Kuricheva, 2019). Many of these cities (especially cities with populations less than 250 000 people) have a low-liquid housing market.

  11. Buyers who use savings rather than a mortgage to purchase a home still incur comparable costs (in a first approximation, monthly), taking into account refusal to use these funds for current consumption, as well as taking into account the lost profit from possible investment of savings in various financial instruments.

  12. Housing may be unavailable for young people and young couples separated from their parents, people who have worked in other territory and returned, who have returned from military service, etc.

  13. Undoubtedly, households have other ways to use the proceeds from the sale of an apartment: e.g., partial repayment of HMLs.

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Funding

The article was prepared at the Institute of Geography, Russian Academy of Sciences, as part of research on the topic “Problems and Prospects of the Territorial Development of Russia in Conditions of Its Irregularity and Global Instability,” state task no. AAAA-A19-119022190170-1 (FMGE-2019-0008).

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  1. Institute of Geography, Russian Academy of Sciences, Moscow, Russia

    N. K. Kurichev

  2. HSE University, Moscow, Russia

    N. K. Kurichev

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Kurichev, N.K. Spatial Equilibrium? The Difference of Real Income, Housing Markets, and Migration Flows between Russian Cities. Reg. Res. Russ. 12, 215–226 (2022). https://doi.org/10.1134/S2079970522020162

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