Homeownership in Russia Gets an American-Style Boost

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If imitation is the sincerest form of flattery, the Russian government is showing the U.S. some love by selling the "Russian Dream" to its citizens: homeownership. Sound familiar?

Buying up 2.5 million acres (almost half the size of New Jersey), the Medvedev government is working to encourage Russians to change their way of living and move from traditional high-rise apartment buildings to single-family homes.

But in a country without a strong history of encouraging individual dreams and keeping up with the Joneses, selling this dream of owning a home promotes unique challenges.

How do you change a people's way of thinking?
Over 77 percent of Russians live in apartments, a holdover from the old ways. Russian President Dmitry Medvedev aims to change this living arrangement and create a segment of society relatively unknown in Russia -- the middle class.

Alexander Braverman heads up the property fund created by Medvedev in 2008 to create the single-style house areas. Talking to Bloomberg News, Braverman said, "For a long time our people were trained to live in high-rise apartment buildings, and we have to admit openly that this habit remains. We'll have to create a program to stimulate demand, and we'll begin this work in the near future. Call it the Russian dream. I think we can make this dream come true."

The government believes that by having affordable loans (people don't earn much) and thus having their own home will inspire a different kind of citizen, a different Russian. "We think that people who have their own homes, driveways and careers are fundamentally different than those who don't have these things," Braverman said. "The person who has something to defend is a different kind of person."

Russia will have a full-on ad campaign to spark a desire in the people to have a home. But as one writer notes in "Russia Behind the Headlines," a project by a major newspaper there, "The majority of population and the establishment as a whole are oriented toward adaptation. Adaptation is based not on freedom and individualism, but on submission and humility. For Russians, individualism is concentrated on a person's inner world, not the outer one." Indeed the government has its work cut out.

There is a lot of money to be made if this housing is created, and that can foster greed. Hopefully the Russians are paying attention to the problems this caused in the U.S. housing market. That kink in the American Dream they can surely leave out.
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