**A NEW HOUSING STRATEGY**

**for the**

**EARTHQUAKE ZONE**

**The Republic of Armenia**

**Prepared For:**

**The Armenia Municipal Development Project**

**Contract MDP / Hs.c.sr/ 98-2**

##### Final report: December 21, 1998

**By:**

**The Urban Institute**

**Washington D.C.**

**In Association with:**

**The Center for Policy Analysis at**

**The American University of Armenia**

**Yerevan**

**And The Institute for Urban Economics**

**Moscow**

December 18, 1998

Mr. Varazdat Avoyan, Director

Armenian Municipal Development Project

Project Coordination Unit

K. Ulnetsi 31

Yerevan, 375037, Armenia

Re: Housing Strategy in the Earthquake Zone

Contract MDP/Hs.c.sr/98-2

Dear Mr. Avoyan:

I am pleased to submit our Final Report: *A New Housing Strategy for the
Earthquake Zone: the Republic of Armenia* in accordance with our
agreement referenced above. I believe this represents a high level of
expert analyses with concrete recommendations by a highly qualified
team.

The Strategy articulates solutions which allow the Government to
maintain fundamental obligations to the earthquake victims *and* to
increase the efficiency by which the Government can deliver on these
obligations while providing it with the flexibility needed in light of
uncertain financial resources.

I am hopeful that this Report will provide the platform to commence
dialogue among all stakeholders who will play a role in the Strategy's
implementation. We also believe that elements of the Strategy document
may serve as an effective *tool* for the Government to use in
discussions with the international donor community.

This Strategy is a result of significant input by the Ministry of Urban
Development, the Ministry of Statistics, Analysis and Registration, the
Ministry of Social Protection and other ministries; and the cooperation
of the local governments of Gyumri, Vanadzor and Spitak. I also want to
thank you and your competent staff for the support which you have
provided us through this very intensive period. I look forward to our
continuing collaboration.

Sincerely,

Steven J. Anlian

Team Leader

**[TABLE OF CONTENTS]{.underline}**

[Page \#]{.underline}

List of Maps, Tables, and Figures

List of Team Members

Executive Summary i

Chapter 1. PLANNING STUDY: PHYSICAL INVENTORY

AND ANALYSIS 1

Background 2

City Plans and Descriptions:

Gyumri 5

Vanadzor 20

Spitak 35

1.3 Discrepancy in Numbers 50

Chapter 2. HOUSING DATA 54

Current Housing Conditions and Attitudes of the Domic

Population 54

Domic Population Survey Tables 62

Characteristics of Beneficiaries of the EQZ Housing

Projects 76

Beneficiary Population Survey Tables 83

Chapter 3. ECONOMIC ISSUES 93

Housing Description and Analysis of Changes 93

Residential Real Estate Market Evaluation 105

Chapter 4. PHYSICAL PLANNING STRATEGY 116

4.1 Urban Planning Considerations and Recommendations 116

4.2. Construction Industry Recommendations 131

Chapter 5. SOCIAL PLANNING STRATEGY

COMPONENTS: 134

5.1 Analysis of and Recommendations for Housing Allocation

Procedures and Waiting Lists 134

5.2 Case Studies 155

Chapter 6. FINANCIAL PLANNING STRATEGY

COMPONENTS: 160

Government Obligations to Improve Earthquake Victims'

Housing Conditions: Programmatic Solutions,

Financial Mechanisms and Policy Options 160

Illustrative Investment Plans 176

ANNEXES 179

ANNEX 1: Excerpt from "The Priority Program for Earthquake

Zone Restoration by the Government of the

Republic of Armenia"; October, 1998 Draft

ANNEX 2: Government Decisions on Housing Allocation

in the EQZ

2.1 Decision \# 371

Decision \# 90

Decision \# 147

ANNEX 3: List of Persons Interviewed and/or Briefed

ANNEX 4: List of Persons Attending Presentations

Interim report: October 29, 1998

Draft Final report: December 2, 1998

Final Report: December 16, 1998

ANNEX 5: References

**[List of the Maps, Tables, and Figures]{.underline}**

[Maps]{.underline}

Location of the Earthquake Zone

Earthquake Region Population

[Urban Situation Immediately befoere the 1988 Earthquake:]{.underline}

Gyumri

Vanadzor

Spitak

[Urban Situation after the 1988 Earthquake:]{.underline}

Gyumri

Vanadzor

Spitak

[General Housing Situation at Present:]{.underline}

Gyumri

Vanadzor

Spitak

[Distribution of Temporaty Dwellings at Present:]{.underline}

Gyumri

Vanadzor

Spitak

[The Process of Reconstruction of Public Facilities at
Present:]{.underline}

Gyumri

Vanadzor

Spitak

[Infrastructure and Roads at Present:]{.underline}

Gyumri

Vanadzor

Spitak

[Land Use Map Per Approved General Plan:]{.underline}

Gyumri

Vanadzor

Spitak

[Potential Areas for Housing Development/Enhancement:]{.underline}

Gyumri

Vanadzor

Spitak

[Housing Value Zones]{.underline}:

Gyumri

Vanadzor

Spitak

Tables

Chapter 1

1.1 The Losses of the Social Sector in the Regions of the Republic of
Armenia Due to the Earthquake

1.2 The Losses of the Social Sector of Gyumri and the Process of
Reconstruction (Government Program 1998)

Table 1.3 The Losses of the Social Sector of Vanadzor and the Process of
Reconstruction (Government Program 1998)

Table 1.4 The Losses of the Social Sector of Spitak and the Process of
Reconstruction (Government Program 1998)

Table 1.5 Discrepancy in Figures

Chapter 2

2.1 Household Characteristics: 1998

2.2 Housing Characteristics: 1998

2.3 Migration and Characteristics of Previous Home: 1992

2.4 Monthly Household Expenditures: September 1998

2.5 Total Monthly Expenditures with and Without Heating Fuel: 1998

2.6 Types of the State Assistance received: 1998

2.7 Assets: 1998

2.8 Perceived Financial Status: 1998

2.9 Waiting List Status and Categories: 1998

2.10 Attitudes About Government Assistance: 1998

2.11 Resources Required to Move: 1998

2.12 Resources Required to Move: 1998

2.13 Acceptability of Alternative Assistance Approaches: 1998

2.14 Desired Characteristics of Next Home: 1998

2.15 Acquisition of Units by Beneficiaries

2.16 Price Paid for Unit, Remodeling Costs, and Market Value: 1998

2.17 Household Characteristics

2.18 Migration and Characteristics of a Previous Unit: 1998

2.19 Satisfaction with New Units and Building Occupation Rate: 1998

2.20 Economic Characteristics of Households: 1998

2.21 Waiting List Status:1998

2.22 Housing Expenditure Burden: 1998

2.23 Total Monthly Expenditures w/o heat for the Earhtquake Victims:
1998

2.24 Total Monthly Expenditures w/o heat for Waiting List Households:
1998

Chapter 3.

3.1 The Housing Stock of the Selected Cities (total -- State and
Private)

3.2 State Housing Stock of the Selected Cities

3.3 Description of the Housing Stock damaged due to the Earthquake

3.4 The Structure of Housing Stock by the Forms of Privatization

3.5 Reconstructed Housing Stock in Gyumri, Vanadzor, Spitak 1989 -- 1997

3.6 Construction of the Residential Units in the Earthquake Zone

3.7 Cinstruction Costs Analysis in Selected Cities of the Earthquake
Zone

3.8 Provision of Public Facilities and Supply Services for the Selected
Cities

3.9 The Prices of Apartments in the 3-rd price Zone of Gyumri City

3.10 Costs per sq. meter of the Residential Real Estate in Gyumri

3.11 The Prices of Apartments in the 5th Price Zone of Vanadzor

3.12 The Prices of Aparts. in the 5th Price Zone on 2 and 4 floors
Vanadzor

3.13 Costs per sq. meter of the Residential Real Estate in Vanadzor

3.14 The Prices fof Apartments and Cottages with Plots

Costs per sq, meter of the Residential Real Estate in Spitak

Chapter 5

5.1. Distribution of Privileged Categories by Decision #147

5.2. Privileged Ranks Assigned to Social Groups

5.3. Distribution of Residential Units According to Privileges,
1990-1997

5.4. The 1998 Top Waiting List in Spitak

5.5. The Waiting Lists for Families Who Lost Their Housing in Vanadzor

5.6. Comparison of Gyumri & Vanadzor Housing Charac. and Attitudes

5.7. Provision of Social Housing and Waiting Lists in the EQZ

5.8. Poverty Incidence

5.9. Poverty Incidence among Local Population (Domestic Residents)

5.10. Attitude Towards Economic Status

5.11. Distribution of Total Expenditures by Cities

5.12. Possession of Assets

5.13. Lowest and Highest Deciles by Mean per Capita Incomes

5.14. Top Privileged Categories and Poverty Groups

5.15. Suggested Priority Categories

Chapter 6

6.1. Assessment Examples

6.2. Criteria for Targeting the Waiting Lists

6.3. Gyumri - Local Government and Expert Estimation of Needs

6.4. Housing Consumption in the Earthquake Zone

6.5. Gyumri Housing Distribution

6.6. Market Values of Housing

6.7. Policy Matrix

6.8. Governmental Program (October 1998 Draft)

6.9. Gyumri: Illustrative Investment Plan

6.10. Vanadzor: Illustrative Investment Plan

6.11. Spitak: Illustrative Investment Plan

Figures

Chapter 3

Figures: 3.1 The Percentage of the Housing Stock in Gyumri, Vanadzor,
and Spitak Before and After the Earthquake, and Occupied in 1989-1997

Figures 3.2 Description of the State Housing Stock Damaged by the
Earthquake in Vanadzor, Spitak, and Gyumri

Figures 3.3 State Housing Stock in Vanadzor, Spitak, and Gyumri

Figures 3.4 Residential Units Occupied From 1989 - 1997: New
Construction Versus Buildings Destroyed/Subject to Demolition (in
Vanadzor, Spitak, Gyumri)

[List of the Team Members]{.underline}

Steven Anlian Team Leader / Urban Planner, The Urban Institute

Lucig Danielian Housing Data Specialist, The Center for Policy Analysis

Raymond Struyk Housing Policy Analyst, The Urban Institute

Alexander Puzanov Housing Policy Specialist, Institute for Urban
Economics

Marina Liborakina Social Policy / Benefits Specialist, Institute for
Urban Economics

Harold Katsura Housing Data Analyst, The Urban Institute

[Special Project Consultants:]{.underline}

Irina Vanian Housing Economist, Center for Policy Analysis

Sashur Kalashian Architect, Center for Policy Analysis

Haik Ayvazian Architect, Center for Policy Analysis

Erik Mesropian Real Estate Economist, Center for Policy Analysis

Mnatsakan Gevorgian Computer Graphics Specialist, Center for Policy
Analysis

Nune Ghazakhetsian Administrative Assistant, The Urban Institute

[Special Assistants: Gyumri:]{.underline}

Garegin Petrosian

Hovik Iskandarian

[Research Assistants:]{.underline}

Varouzhan Hoktanian Center for Policy Analysis

Tereza Khorozian Center for Policy Analysis

Anahit Hakobian Center for Policy Analysis

####### Executive Summary

**[A NEW HOUSING STRATEGY FOR THE EARTHQUAKE ZONE]{.underline}**

**[EXECUTIVE SUMMARY]{.underline}**

The identified goal of the Strategy is *to provide permanent housing to
the remaining earthquake displaced population and, while doing so, to
enhance the original cities.* The *essence* of the "New Housing
Strategy" deals principally with *alternatives* to new construction.
*This is a consumer-oriented ("demand-side") policy geared to the
physical redevelopment of each city that provides eligible beneficiaries
with significant choice regarding the type of replacement housing it
will receive.*

The Strategy is to be implemented by a careful balance of three program
elements: a physical plan, a social plan and a financial plan:

The [physical planning component]{.underline} introduces a *phased*
program in the old cities, organized around a logical, sequential and
successive selection of sites in the original cities to be *cleared* of
the temporary huts ("domics") in conjunction with building strengthening
activities and/or construction on the same site. Over time, most domics
*site by site* will be removed to provide space for redevelopment of the
sites.

This "site by site" approach (starting with the most viable sites in
terms of the maximum number of housing units produced at the lowest
cost) is [directly linked]{.underline} to the distribution of benefits,
providing the Government with flexibility in management of the program
(i.e. number and types of sites selected for development in any year
will be determined by its budget allocation, loans, grants, etc,)

The [social planning strategy component]{.underline} assures that former
residents of damaged/destroyed buildings on each selected site (and
certain other categories not necessarily site-related) will be eligible
beneficiaries. The actual level of benefits depends on their waiting
list category coupled with new means-tested criteria (i.e. the unified
waiting lists, are now targeted)

The [financial planning strategy element]{.underline} gives each
eligible household the choice between a) accepting a \"housing purchase
certificate\" to use *immediately* in purchasing permanent housing
[or]{.underline} b) being re-housed temporarily and later moving into
the building to be reinforced/constructed on the subject site when it is
completed.

Depending on the absorption rate for the two options ("a" or "b" above),
and the continuing feasibility in terms of housing supply of the
\"housing purchase certificate" option, *more* housing or *less* housing
will be newly constructed. The flow of certificates can be turned on and
off through a "policy valve". The objective is to *absorb* the surplus
housing stock *first*, which is available or can be made quickly
available in the Republic, *before* starting new construction.

[Physical Planning Component: Economic Analysis and Housing
Data]{.underline}

It is evident that partially completed infrastructure and unfinished
buildings are spread out over large, unmanageable areas in the new
regions of Gyumri and Vanadzor. The ongoing activity is not consistent
with urban development in a market economy. The reconstruction plans
were developed during a different time, within a different system. The
approaches made sense at the time and were seemingly achievable. If the
same daunting tasks for reconstruction were faced today, needless to
say, different approaches would be taken.

It must be recognized that the various new city plans were excessive to
begin with, in both the planning and in the estimation of implementation
costs. At the time, It behooved planners from all the Soviet republics,
which were to participate in the two-year earthquake recovery program,
to maximize construction budgets. The new Government of the independent
Armenia has had to deal with that legacy.

It is clear that a tremendous investment has been made in the
construction of the new regions over the last decade. But, much of this
may be considered "sunk costs" in economic terms. Need us not forget the
large investments made as well in the *existing* cities over tens of
decades. We must step back and take a fresh look at the entire picture,
*not* simply find a way to continue the status quo of new construction.

A new generation of housing consumers has evolved since the earthquake;
many dependent children in 1988 are now heads of household with their
own children. This presents a whole new series of issues of what exactly
are Government's obligations. Through a recent intensive survey process
of both temporary housing residents (represented by "domic" dwellers)
and beneficiaries of new housing units, interesting observations are
made, most significantly:

The historic relationship where "domic dweller" was synonymous with
"earthquake displaced" has broken down over time. A fairly large number
of domic dwellers today did not lose their homes in the earthquake - so,
"turnover" of domics now becomes an issue.

While domic dwellers believe that the Government should help provide

them with a new home (very few are willing to stay in their domics

even if they are upgraded or moved to better sites), many domic dwellers
admit that they are ready and willing to *participate* in their housing
relocation using, *in part*, some their own resources.

There is great confusion as to waiting lists: of those who say that they
are on the waiting list, half do not know in which category.

There are many (up to 20%) housing units which have been allocated to
beneficiaries over the last several years which remain
[unoccupied.]{.underline}

There has been no consistent policy for domic disposition *after* the
household receives a new housing unit. This has resulted in a serious
situation where domics have assumed many other functions which were
never intended.

*Any* new strategy must make economic sense and must work within the
*capacity* of the Government *to implement*. If foreign assistance is
part of the solution, then the strategy must satisfy the scrutiny of
grantors and lenders. New construction and building reinforcement costs
as cited in the Report are based on contracts for State construction as
implemented in the past. But new approaches to State construction
management and methodologies of materials procurement may result in
significant cost savings.

*Existing* housing units are sold in the market for significantly less
than the *cost to replicate* these units through new construction. This
forces the consideration of new ways to deliver housing to those who are
entitled to Government assistance.

The Urban Planning recommendations are summarized as follows:

Concentrate State construction efforts on a) reinforcement of damaged
buildings in the old city districts and b) in the new districts, on
finishing the buildings with the highest level of completion. New
construction, if warranted, should only take place on sites already
active (as in "a" and "b").

Limit construction activities in new regions either not presently (or
easily) serviced by the necessary infrastructure. (Additionally, this
policy is supported by considerations of long-term public servicing
requirements by local governments).

The first two points logically translate into the following: the "New
Gyumri" (with the exceptions of the "Ani" District and the "Mush" 2
District which already have a high level of infrastructure and building
completions) should be designated as "reserve" areas for future uses to
be determined. New construction and completions should *not* be
considered there for the foreseeable future. After the other programs
have been tested ("housing purchase certificates" for *existing*
housing, revised housing allocation procedures, etc.) and unfinished
housing construction and reinforcements are *delivered*, the Government
may better evaluate the reserve areas. Vanadzor and Spitak have their
own unique conditions, and strategy recommendations for completing
housing restoration there will be different than in Gyumri.

The Project Team sees a *potential* for domic "upgrading" in Spitak
only, i.e. conversion in *selected* cases to permanent housing,
accompanied by completions, reinforcement and potentially limited low
density new construction. In the other cities (Gyumri and Vanadzor),
programs should be commenced immediately for the [removal of
domics]{.underline} in the original city districts [in conjunction
with]{.underline} building reinforcements (and potentially "infill" new
construction, i.e. construction on sites where there are building
reinforcements). As long as the domics remain scattered about, the
cities will maintain the image of the "disaster zone."

Special programs should be developed to deal with the difficult issues
of domic removal and temporary housing arrangements to provide a
"bridge" for residents who vacate their domics to permit construction
mobilization (but must wait for new permanent housing). There is an
important role for the private sector in these solutions and programs
should be developed to stimulate the housing market.

[Social Planning Element: Housing Allocation and Waiting
Lists]{.underline}

The waiting lists for all jurisdictions may *remain intact*. While the
lists should be "cleaned-up", in terms of glaring "errors" (removing
names of fictitious households, etc.), the Government should *not* start
adding nor subtracting from the lists. Rather, all lists for all
jurisdictions should be put into *uniform format*.

The Government, in essence, demonstrates its resolve to maintain its
obligation to assist those on the waiting list. However, a *targeting*
system should be put into place which will give priority to those most
vulnerable and the least capable of improving their housing conditions
using their own means. Targeting may provide compensation to waiting
list households, but in many cases, only at a *percentage* of actual
housing market values, depending on a set of established criteria which
attempts to identify individual household means.

Finally, waiting lists should be readily available to the public,
preferably published and updated regularly, in order to increase
transparency.

[Financial Planning Component:]{.underline}

The Housing Purchase Certificate is a critical tool for implementation
of the Strategy. The Government may allocate a specific amount of State
funds each year for *non-transferable* "housing purchase certificates",
which can be used exclusively for purchase of existing housing units (on
the open market) or in some cases, for new/nearly complete housing
units. This will *absorb* the underutilized housing surplus (and take
advantage of the low acquisition prices due to lack of *effective*
demand) *before* committing State funds to new construction. The
advantage of this system is that the State pays nothing until the
objective is achieved, i.e. when there is a successful match between
buyer and seller (the certificate is redeemable at time of transaction).
The value of a Housing Purchase Certificate will be determined by: the
market values for housing in the region, the size of apartment for which
the household qualifies in accordance with national norms, and an
evaluation of the beneficiary household's needs, based on the
aforementioned targeting criteria.

"Fixed Price Certificates" will also be used to provide immediate
compensation to those waiting list households which are not in the "most
needy" category and therefore most likely to use their own means to
improve their housing conditions. The decision as to acceptance of this
final compensation *now* or wait indefinitely for a better offer will be
voluntary.

The financial services community will become a critical agent to the
Government in implementing the financial strategy component. Banks will
require intensive training and technical assistance in order to prepare
for this role.

Investment Plans for each city, allocating funds for the various
activities (housing purchase certificates, fixed-price certificates,
reinforcements, completions and new construction) are important for the
success of the Strategy.

The following pages discuss all elements of the New Housing Strategy for
the Earthquake Zone in detail.

**Chapter 1**

**PLANNING STUDY:**

**PHYSICAL INVENTORY**

**and ANALYSIS**

1.  **Background**

2.  **City Plans and Descriptions:**

-   **Gyumri**

-   **Vanadzor**

-   **Spitak**

    1.  **Discrepancy in Number**

PLANNING ANALYSIS

[Background]{.underline}

The December 7, 1988 natural disaster covered about 40% of the
Republic's area effecting approximately 1 million people. Fully or
partly destroyed were more than 230 industrial units (or about 25% of
Republic's industrial potential). More than 100,000 families were left
homeless and 25,000 people died under the ruins. The social sector alone
incurred the following losses in the regions of the Republic, due to the
earthquake:

Table 1.1

+---------------+------------+------------+------------+------------+
| District,     | Housing    | Secondary  | Hospitals  | P          |
|               | Fund       | schools    |            | olyclinics |
| Populated     |            |            | (cot)      |            |
| area          | (thousands | (pupil     |            | (vis       |
|               | m^2^)      | places)    |            | its/shift) |
+---------------+------------+------------+------------+------------+
| Shirak        | 3677.0     | 64012      | 3235       | 6630       |
| district:     |            |            |            |            |
|               | 2193.4     | 33900      | 2160       | 4500       |
| From which    |            |            |            |            |
| Gyumri        |            |            |            |            |
+---------------+------------+------------+------------+------------+
| Lori          | 3953       | 61680      | 2860       | 6370       |
| district:     |            |            |            |            |
|               | 1993.5     | 23400      | 1730       | 2500       |
| From which    |            |            |            |            |
| Vanadsor,     | 281.9      | 7320       | 250        | 500        |
|               |            |            |            |            |
| Spitak        |            |            |            |            |
+---------------+------------+------------+------------+------------+
| Tavoush       | 832.9      | 13010      | \-         | 420        |
| district:     |            |            |            |            |
|               | 267.8      | 4980       | \-         | \-         |
| From which    |            |            |            |            |
| Dilidjan      |            |            |            |            |
+---------------+------------+------------+------------+------------+
| Aragatsotn    | 442.8      | 11470      | \-         | 1460       |
| district:     |            |            |            |            |
|               | 63.9       | \-         | \-         | \-         |
| From which    |            |            |            |            |
| Talin         |            |            |            |            |
+---------------+------------+------------+------------+------------+
| Total:        | 8906.3     | 150172     | 5795       | 14880      |
|               |            |            |            |            |
| In disaster   |            |            |            |            |
| zone          |            |            |            |            |
+---------------+------------+------------+------------+------------+

To ameliorate the earthquake's consequences, the former Soviet
authorities adopted certain decisions in 1988 concerning the disaster
zone, by which within two years, not only compensation would be made for
the extensive losses, but also, new residential construction should
guarantee the following minimal standards:

-   for each homeless family an individual apartment,

-   for each person 15.0 m^2^ of gross area.

Using this approach, the General Plans for the damaged populated areas
within the earthquake zone were developed and enormous construction
actively initiated. Because the time frame was limited for
implementation of the complex program of disaster zone reconstruction,
and, as there was no consensus concerning reinforcement options for
buildings damaged by the earthquake nor organizations specializing in
this strengthening activity, the urban development program in reality
focused on new construction activity located outside of the former
populated areas on agricultural land. Even with all the shortcomings
within the urban planning and economic spheres, this 2-year program
possibly could have been realized if the conditions in the Caucasus, as
well as Armenia's own internal issues, had not become severely
complicated, leading to a failure of major transportation and energy
supply systems.

The existing conditions forced the Government of RA to make corrections
in the previous program on reconstruction of disaster zone. By the
Decision of RA Government (1993), a new Program on Reconstruction of the
Disaster Zone was published, which, in reality, maintains the basic
approach of the previous program, but extending the reconstruction time
up to year 2000.

Armenia's internal economy, which approached crisis proportions, and the
stretched governmental resources, lead to another situation, whereby the
existence of the State became possible only through foreign humanitarian
structures, which resulted in, if not full suspension of the
reconstruction work in disaster zone, the recovery activities taking on
a mere symbolic character.

Today, on the 10^th^ anniversary of the Spitak Earthquake, it is
necessary to refresh the process and analyze the results of the disaster
zone reconstruction over the previous years, to compare them with the
present economic potential of the Republic and to form a real program of
reconstruction, with the goal of solving the reconstruction problems in
the region's social sectors.

For designing such a program, it is very important for urban areas to be
evaluated as to the precise social-economic condition and innovative
urban planning thinking in order to develop the approaches and optimal
real parameters to satisfy the needs.

Taking into consideration that the most important part of the disaster
zone's urban planning components is the problem of housing, and then,
specifically in the area of production, so it is appropriate to
elaborate the analysis of the disaster zone in the three major populated
areas: Gyumri, Vanadsor, Spitak.

G YU M R I

Gyumri is the second industrial and cultural center of Armenia. In 1988
the population was 230,000 people. Industrial potential, in general,
consisted of textile production, equipment production,
electric-technical and food production. The city had a dense net of
drinking water and sewerage lines, which covered 90% of the population
requirements. Because of earthquake, the city has lost almost all the
industrial potential. The loss in the social sectors of the city and the
process of the reconstruction in 1998 has the following form:

Table 1.2

<table style="width:100%;">
<colgroup>
<col style="width: 13%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td rowspan="3"></td>
<td colspan="3">Damaged</td>
<td colspan="3">In process on 01.01.98</td>
<td colspan="3"><p>Need according to</p>
<p>the local government</p></td>
</tr>
<tr class="even">
<td rowspan="2">Total</td>
<td colspan="2">Including</td>
<td rowspan="2">Total</td>
<td colspan="2">Including</td>
<td rowspan="2">Total</td>
<td colspan="2">Including</td>
</tr>
<tr class="odd">
<td>Collapsed</td>
<td>Damaged</td>
<td>Collapsed</td>
<td>Damaged</td>
<td>Collapsed</td>
<td>Damaged</td>
</tr>
<tr class="even">
<td><p>Housing fund</p>
<p>- total area (thous. m<sup>2</sup>)</p>
<p>- apartment (p)</p></td>
<td><p>1582.0</p>
<p>27020</p></td>
<td><p>1180.2</p>
<p>20612</p></td>
<td><p>401.8</p>
<p>6408</p></td>
<td><p>608.8</p>
<p>8171</p></td>
<td><p>549.9</p>
<p>7352</p></td>
<td><p>58.9</p>
<p>819</p></td>
<td><p>921.9</p>
<p>1536.5</p></td>
<td><p>586.6</p>
<p>9776</p></td>
<td><p>335.3</p>
<p>5589</p></td>
</tr>
<tr class="odd">
<td><p>Schools</p>
<p>- pupil places</p>
<p>- count</p></td>
<td><p>27770</p>
<p>45</p></td>
<td><p>21888</p>
<p>34</p></td>
<td><p>5882</p>
<p>11</p></td>
<td><p>9052</p>
<p>17</p></td>
<td><p>5882</p>
<p>11</p></td>
<td><p>3170</p>
<p>6</p></td>
<td><p>9548</p>
<p>30</p></td>
<td><p>4852</p>
<p>17</p></td>
<td><p>4696</p>
<p>13</p></td>
</tr>
<tr class="even">
<td><p>Hospitals</p>
<p>- cot</p>
<p>- count</p></td>
<td><p>2148</p>
<p>11</p></td>
<td><p>1778</p>
<p>8</p></td>
<td><p>370</p>
<p>3</p></td>
<td><p>580</p>
<p>4</p></td>
<td><p>500</p>
<p>3</p></td>
<td><p>80</p>
<p>1</p></td>
<td><p>425</p>
<p>5</p></td>
<td><p>150</p>
<p>2</p></td>
<td><p>275</p>
<p>3</p></td>
</tr>
<tr class="odd">
<td><p>Polyclinics</p>
<p>- visits/shift</p>
<p>- count</p></td>
<td><p>3302</p>
<p>11</p></td>
<td><p>2950</p>
<p>9</p></td>
<td><p>352</p>
<p>2</p></td>
<td><p>1490</p>
<p>6</p></td>
<td><p>1370</p>
<p>5</p></td>
<td><p>120</p>
<p>1</p></td>
<td><p>630</p>
<p>4</p></td>
<td><p>150</p>
<p>2</p></td>
<td><p>480</p>
<p>2</p></td>
</tr>
</tbody>
</table>

Damaged areas in the city today are occupied by temporary dwellings.
Moreover, some damaged schools, industrial buildings, and former public
park areas are also occupied by temporary dwellings.

Employment is very low today. In an industrial environment with low
potential, food-production units operate as well as the construction
industry, which employ approximately 1,500 people. The service sphere in
general is limited to small trade. Approximately 2,000 people are
engaged in public enterprises. Taking as a basis the 211,100 Gyumri
population, then the unemployment count is approximately 46,000 people.

Finally, 17,620 residential units are counted now on the City territory.
According to the city administration official data -- homeless families,
registered to get an apartment number at 14,686.

#### Gyumri

**[The Urban Situation Immediately before the Earthquake]{.underline}**

Area of the city -- 36 km^2^

# Population -- 230,600

Employment in industrial sector -- 45,000 persons

The total housing stock of the city -- 2,536,000 m^2^ of gross area,
including 704,3 m^2^ in private households and 1,831.7 m^2^ in State.

In 1980, the historical center of the city's urban development was
designated as an historic-architecture preservation area; its boundaries
were defined and the charter of activity was adopted. More than 1,600
historic-architectural monuments of XIX century, as well as ancient and
medieval sites were encompassed within the preserve.

From the aspect of the city's territorial expansion, all the potential
sites were already in use and further urban development was proposed
through the creation of satellite communities. Conceptual projects for
these had been developed and adopted by the Government just before the
earthquake.

## Gyumri

## 

## [The Urban Situation after the 1988 Earthquake]{.underline}

Nearly all State housing stock was destroyed or damaged by the
earthquake. As a rule, all 9-story, panel-frame type buildings were
destroyed; almost all 5-story masonry buildings incurred damage making
them Degree V and IV structures; 1 and 2-story private houses were
damaged to mainly Degree I and II categories; 2,3, and 4-story masonry
structures suffered damage bringing them to Degree II and III
conditions.

Almost all industrial, educational, academic, cultural, healthcare,
administrative and buildings of worship as well as other structures of
the city become destroyed or damaged to Degree III.

The entire system of energy, water, heating supply, communication and
other services provided to the population of the city failed.

More than 30,000 individuals were buried under the ruins and more than
130,000 individuals were not only left homeless and unprotected, but
also lost all their personal and commercial possessions achieved through
as long as 70 years.

## 

##  

## Gyumri

## 

## [General Housing Situation at Present]{.underline} 

The task of the reconstruction of the earthquake zone was recognized by
the former Soviet Union Government as one of its primary tasks. Within a
short time interval, the huge construction activity was concentrated on
areas previously not developed. The process of clean up of debris and
allocation of temporary dwellings began. Parallel with that, the new
urbanization plan was developed, according to which new residential
construction should be conducted on the northwest side of the city on
former agricultural plots. However, the task of reconstruction of the
destroyed regions of the city was left for the future.

The northwest part of the city, the so-called residential area of
"Marmashen" covers

20 km^2^, consists of 8 residential regions, from which only the region
of "Ani" is in the state nearing completion.

The construction activity in the remaining 7 regions is effectively
halted and the state of completion there, on average, is only 5-10%;
there are some completed and occupied residential units, but these do
not constitute any appreciable amount. In the city's old regions, around
thirty 3 and 4-story residential buildings have been reinforced to date.

### 

#### Gyumri

**[Distribution of Temporary Dwellings at Present]{.underline}**

The procedure of allocation of temporary dwellings is still not well
developed. They are mostly allocated in the previously open areas of the
city (parks, gardens, forest zones) which, however, have been provided
with water, sewerage and energy supply systems.

These "domics" have been placed in the areas cleaned from debris of the
earthquake ruins, which previously were residential areas, schools and
industrial plants. A large amount of domics was located outside of the
administrative boundaries of the city, particularly on the territory of
the Gyumri airport.

Anticipating a potentially longer stay in such dwellings, some
occupants, at their own initiative, placed a thin stone layer around the
surface from the very beginning of habitation, thus protecting them
against the winter cold.

The effective useable area of the domics varies from 15 to 25 m^2^,
within which a family should organize its everyday life. Therefore, in a
short period of time, the necessary substructures (toilettes, kitchens,
etc.) were built by dwellers near the domics.

One fact should be emphasized here: even after receiving new housing,
dwellers continue to use their domics, both as the second apartment or
workplace (booths/\"butkas", workshops).

Currently, on the territory of the city, more than 17,000 such domics
are counted.

## 

##  

## Gyumri

## 

## [The Process of Reconstruction of Public Facilities at Present]{.underline}

As a result of the earthquake, the city lost around 40 of its schools,
totaling 33,900 places; hospitals, totaling 2,160 beds, and special
medical treatment sites totaling 4,500 users per shift.

In recent years, 14 schools, totaling 8,544 places; hospitals, totaling
1,318 beds; and special medical treatment sites totaling 2,635 users per
shift have begun operating.

30 schools still continue to operate in buildings made of wood. Each
school serves the population within a radius of 500 m.

## Gyumri

## [Infrastructure and Roads at Present]{.underline}

Gyumri is connected to the outside world through automotive roadways,
railways and air routes. The residential area of the city is provided
with a dense street network throughout and within its regions, which
continue to operate without difficult. In the newly constructed
residential region of "Marmashen", the internal street network is
effectively restricted to the region of "Ani".

The infrastructure has not qualitatively changed. It is operating at the
schedule and capacity of 1988. Particularly, water supply and sewerage
networks today encompass almost 80% of the administrative territory of
the city in 1988.

In the residential region "Marmashen", the interior network is still
restricted to the territory of the region, "Ani", though the main water
supply artery of the city approaches the Gyumri-Kars automotive road,
where the main reservoir of the drinking water supply is located.

## 

# V A N A D S O R

Vanadsor is the third industrial and cultural center in the Republic of
Armenia. The city area is 2,192.2 hectares, including "Taron-1-2-3", and
"Taron-4"'s areas, which are 242.9 hectares. In 1988 the population of
the city was 172,600 people. The industrial potential generally
consisted of chemical manufacturing, equipment and food production. The
city had a dense network of drinking water and sewerage lines, which
fully covered the general needs of the population. Because of the
earthquake, it lost almost all of the industrial potential. The losses
in the social sector of the city and the process of the reconstruction
on 1998 takes the following form:

Table 1.3

<table style="width:100%;">
<colgroup>
<col style="width: 13%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td rowspan="3"></td>
<td colspan="3">Damaged</td>
<td colspan="3">In process on 01.01.98</td>
<td colspan="3"><p>Need according to</p>
<p>the local government</p></td>
</tr>
<tr class="even">
<td rowspan="2">Total</td>
<td colspan="2">Including</td>
<td rowspan="2">Total</td>
<td colspan="2">Including</td>
<td rowspan="2">Total</td>
<td colspan="2">Including</td>
</tr>
<tr class="odd">
<td>Collapsed</td>
<td>Damaged</td>
<td>Collapsed</td>
<td>Damaged</td>
<td>Collapsed</td>
<td>Damaged</td>
</tr>
<tr class="even">
<td><p>Housing fund</p>
<p>- total area (thous. m<sup>2</sup>)</p>
<p>- apartment (p)</p></td>
<td><p>470.5</p>
<p>8504</p></td>
<td><p>241.8</p>
<p>4755</p></td>
<td><p>228.7</p>
<p>3749</p></td>
<td><p>398.9</p>
<p>5232</p></td>
<td><p>340.6</p>
<p>4338</p></td>
<td><p>58.3</p>
<p>894</p></td>
<td><p>-</p>
<p>1952</p></td>
<td><p>-</p>
<p>1338</p></td>
<td><p>-</p>
<p>614</p></td>
</tr>
<tr class="odd">
<td><p>Schools</p>
<p>- pupil places</p>
<p>- count</p></td>
<td><p>19956</p>
<p>29</p></td>
<td><p>9884</p>
<p>17</p></td>
<td><p>10072</p>
<p>12</p></td>
<td><p>11928</p>
<p>14</p></td>
<td><p>5356</p>
<p>7</p></td>
<td><p>6572</p>
<p>7</p></td>
<td><p>6340</p>
<p>16</p></td>
<td><p>3960</p>
<p>10</p></td>
<td><p>2380</p>
<p>6</p></td>
</tr>
<tr class="even">
<td><p>Hospitals</p>
<p>- cot</p>
<p>- count</p></td>
<td><p>1045</p>
<p>7</p></td>
<td><p>695</p>
<p>5</p></td>
<td><p>350</p>
<p>2</p></td>
<td><p>260</p>
<p>2</p></td>
<td><p>120</p>
<p>1</p></td>
<td><p>140</p>
<p>1</p></td>
<td><p>330</p>
<p>4</p></td>
<td><p>165</p>
<p>2</p></td>
<td><p>165</p>
<p>2</p></td>
</tr>
<tr class="odd">
<td><p>Polyclinics</p>
<p>- visits/shift</p>
<p>- count</p></td>
<td><p>1135</p>
<p>10</p></td>
<td><p>850</p>
<p>7</p></td>
<td><p>285</p>
<p>3</p></td>
<td><p>485</p>
<p>4</p></td>
<td><p>200</p>
<p>1</p></td>
<td><p>285</p>
<p>3</p></td>
<td><p>150</p>
<p>3</p></td>
<td><p>100</p>
<p>2</p></td>
<td><p>50</p>
<p>1</p></td>
</tr>
</tbody>
</table>

Temporary dwellings occupy all industrial and some public areas in
Vanadsor.

The industrial units today are operating at approximately 20% of their
potential. Unemployment in Vanadsor is 53% of the employable population.

Today, approximately 3,600 units are counted in the Vanadsor area.

1,952 families are registered to get an apartment.

# Vanadzor

## Urban Situation Immediately before the 1988 Earthquake

Area of the city -- 1,949.3 ha

Population -- 172,600 people, among them 1,700 refugees

Employment in industry -- 33,500 people

The gross housing stock of the city -- 1,993,500 sq. meters, among them,
1,295,000 sq. meters are State and 698, 500 sq. meters are private.

According to the last General Plan, the urban development of the city
was expected to spread to areas adjacent to the city, by building new
residential districts (in the direction of Yerevan and Stepanavan).

**Vanadzor**

## 

## Urban Situation after the 1988 Earthquake

Earthquake caused basically the destruction or damage of the city
housing stock (36.3% of the latter, nearly 470,5 00 sq. meters), which
were 4 - 5 story " 450-450A" type houses and nine-story "111" type of
panel-frame houses. As a rule, all panel-frame nine-story houses were
destroyed.

Industrial buildings were partially destroyed (nearly 30 %).

The city infrastructure was ruined. Public sector buildings were greatly
damaged.

# Vanadzor

## 

## General Housing Situation at Present

According to the Vanadzor General Plan (approved by Decision #2,
04/04/89) it was determined to start the reconstruction process of the
city by creating "Taron 1, 2 3 and 4" neighborhoods, which are now
located in the northwestern part of the city. It was also decided to
reconstruct partially destroyed portions of the Old City. 442 ha of land
were allocated for new neighborhood construction.

The reconstruction program of Vanadzor is implemented at these levels:

83 % of the housing stock is complete

All aforementioned occupied units are provided with infrastructure.

# Vanadzor

## Distribution of Temporary Dwellings at Present

5,200 "domics" (temporary dwellings) are estimated to exist in the
Vanadzor area, the distribution of which is not regulated in the city.
These domics are placed on free areas where basic infrastructure is
available.

As the time of living in temporary domics has been prolonged, people
themselves construct adjacent structures using their own resources in
order to improve conditions.

Just after the earthquake, many houses were destroyed unjustifiably with
purpose to build new ones on that place. Residents of the destroyed
houses put their temporary dwellings on the vacant lots. They refuse to
leave these places, maintaining that these areas are the only possible
places to get housing. It has to be mentioned that the persons in this
category would agree to leave the temporary dwellings, living for some
period of time in other places, at their own expense, if they have a
guarantee for an apartment in their previous neighborhood.

The largest groups of "domics" are:

1.  "Chimshin" neighborhood -- 790 domics (667 families)

2.  "Dimats" neighborhood, domic settlement #5 - 542 domics (446
    families)

3.  "Arapnja" neighborhood, domic settlement #3 --33 domics (28
    families)

4.  "Bazum' neighborhood - 221 domics (176 families)

5.  "Tavros" neighborhood -- 114 domics

6.  "Taron 2" neighborhood -- 42 domics (24 families)

7.  "Taron 4' neighborhood -- 23 domics (14 families)

8.  Spontaneously created domic settlements -- 2,992 domics (2350
    families)

9.  Department property settlements (power engineering specialists;
    chemical fiber employees; bank; heat power station employees;
    "Automatic" Scientific Research Institute) -- 456 domics.

# Vanadzor

##  The Process of Reconstruction of Public Facilities at Present

As a result of the Earthquake, public facilities of the city suffered
losses: 19,956 student places (29 schools), hospitals -- 1,045 beds (7
hospitals), polyclinics -- 1,135 places (10 polyclinics).

Restoration of the social sector has resulted in replacement at the
following rates:

Schools -- 59,8 %

Hospitals -- 24,9 %

Polyclinics -- 42,7 %

**Vanadzor**

## Infrastructure and Roads at Present

Vanadzor is connected with other parts of the Republic by roadways and
railroad lines. Residential areas of the city are provided fully with
inter-city, intra-city, and inter-neighborhood streets, with complete
networks, the quality of which are unsatisfactory.

At present, all existing and occupied buildings and structures are
provided with the necessary infrastructure. It should be mentioned that
all preconditions exist for the operating infrastructure (particularly
water supply, purification and treatment stations) to reach the planned
capacity if necessary capital investment can be made.

# S P I T A K

Spitak is a part of the Lori Marz. The city area is 560 hectares,
including New Spitak, which has an area of 484 hectares. In 1988, the
population was 20,500 people, including 2,000 refugees from Azerbaijan.
Industrial potential consisted of equipment and food production.
According to the decision of the Council of Ministers of the Armenian
Republic after the earthquake, 484 hectares of land were given for new
construction in Spitak. The city had a dense network of drinking water
and sewerage lines. Because of the earthquake, the city lost all of its
industrial potential. The losses in the social sector of the city and
the process of the reconstruction in 1998, is as follows:

## Table 1.4

<table style="width:100%;">
<colgroup>
<col style="width: 13%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 7%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 10%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td rowspan="3"></td>
<td colspan="3">Damaged</td>
<td colspan="3">In process on 01.01.98</td>
<td colspan="3"><p>Need according to</p>
<p>the local government</p></td>
</tr>
<tr class="even">
<td rowspan="2">Total</td>
<td colspan="2">Including</td>
<td rowspan="2">Total</td>
<td colspan="2">Including</td>
<td rowspan="2">Total</td>
<td colspan="2">Including</td>
</tr>
<tr class="odd">
<td>Collapsed</td>
<td>Damaged</td>
<td>Collapsed</td>
<td>Damaged</td>
<td>Collapsed</td>
<td>Damaged</td>
</tr>
<tr class="even">
<td><p>Housing fund</p>
<p>- total area (thous. m<sup>2</sup>)</p>
<p>- apartment</p>
<p>(places)</p></td>
<td><p>125</p>
<p>2695</p>
<p>1216</p></td>
<td><p>107.3</p>
<p>2405</p>
<p>1216</p></td>
<td><p>17.7</p>
<p>290</p>
<p>-</p></td>
<td><p>43.7</p>
<p>647</p>
<p>378</p></td>
<td><p>34</p>
<p>485</p>
<p>378</p></td>
<td><p>9.7</p>
<p>162</p>
<p>-</p></td>
<td><p>-</p>
<p>2187</p>
<p>838</p></td>
<td><p>-</p>
<p>2059</p>
<p>838</p></td>
<td><p>-</p>
<p>128</p>
<p>-</p></td>
</tr>
<tr class="odd">
<td><p>Schools</p>
<p>- pupil places</p>
<p>- count</p></td>
<td><p>3340</p>
<p>8</p></td>
<td><p>3340</p>
<p>8</p></td>
<td><p>-</p>
<p>-</p></td>
<td><p>1550</p>
<p>5</p></td>
<td><p>1550</p>
<p>5</p></td>
<td><p>-</p>
<p>-</p></td>
<td><p>1338</p>
<p>4</p></td>
<td><p>669</p>
<p>2</p></td>
<td><p>669</p>
<p>2</p></td>
</tr>
<tr class="even">
<td><p>Hospitals</p>
<p>- cot</p>
<p>- count</p></td>
<td><p>160</p>
<p>1</p></td>
<td><p>160</p>
<p>1</p></td>
<td><p>-</p>
<p>-</p></td>
<td><p>205</p>
<p>1</p></td>
<td><p>205</p>
<p>1</p></td>
<td><p>-</p>
<p>-</p></td>
<td><p>-</p>
<p>-</p></td>
<td><p>-</p>
<p>-</p></td>
<td><p>-</p>
<p>-</p></td>
</tr>
<tr class="odd">
<td><p>Polyclinics</p>
<p>- visits/shift</p>
<p>- count</p></td>
<td><p>250</p>
<p>1</p></td>
<td><p>250</p>
<p>1</p></td>
<td><p>-</p>
<p>-</p></td>
<td><p>300</p>
<p>1</p></td>
<td><p>300</p>
<p>1</p></td>
<td><p>-</p>
<p>-</p></td>
<td><p>500</p>
<p>1</p></td>
<td><p>500</p>
<p>1</p></td>
<td><p>-</p>
<p>-</p></td>
</tr>
</tbody>
</table>

In most cases, the public areas in the city are occupied by temporary
dwellings.

Employment is very low today. Unemployment is 62% of the employable
population.

In Spitak, there are approximately 3,728 temporary shelters.[^1]

3,025 families are registered to get an apartment.

# Spitak

# [Urban Situation Immediately before the 1988 Earthquake]{.underline}

Area of the city -- 560 ha

Population -- 20,500 people, among them two thousand refugees

Employment in industry -- 3,920 people

> The gross housing stock of the city -- 281,900 sq. meters gross area,
> among them, 139,000 sq. meters are State and 142,900 sq. meters are
> private.

# Spitak

**[Urban Situation after the 1988 Earthquake]{.underline}**

The Earthquake resulted in 90% destruction of both State and private
housing stock. The State housing stock was basically 4-5 story masonry
structures built according to both standardized and individual projects.
10% of the housing stock was large concrete panel buildings, which
incurred minor damages.

Buildings within the social and industrial sectors were almost
completely destroyed. The engineering infrastructure of the city was
completely ruined. According to the new General Plan for the destroyed
Spitak area (excluding the industrial and municipal reserve units and
structures), a portion of the old city area, particularly a tourist
center, one-story hotels, small servicing and commercial centers, were
expected to be used. According to the plan, only several destroyed
buildings were to be reconstructed, thus becoming part of a monument
complex commemorating the Spitak Earthquake. According to the Decision
(12/23/89 Decision #4) of the ROA Council of Ministers, land allocation
was arranged (484 hectares of Spitak co-owned land) to the southwest of
Spitak.

# Spitak

## General Housing Situation at Present

According to the adopted Spitak General Plan, the planned housing stock
should total nearly 240,000 sq. meters of gross area.

The "Italian neighborhood" (204 units), after the period of evaluation,
are now considered a reserved area.

At present, the program of construction of the New Spitak and the
reconstruction of the old city is implemented at 20% of the planned
housing stock is complete. All aforementioned occupied units are
provided with infrastructure.

# 

# 

#  

# Spitak

# [Distribution of Temporary Dwellings at Present]{.underline} 

3,728 "domics" (temporary dwellings) are estimated to exist in today's
Old Spitak, the distribution of which is not regulated in the city.
These domics are placed in free areas, where fundamental infrastructure
is available.

Here, as in Gyumri and Vanadzor, residents themselves construct adjacent
structures using their own resources in order to improve living
conditions.

The largest groups of Spitak domics are:

1\. Italian neighborhood -- 204 domics (234 families)

2\. German neighborhood -- 81 domics (85 families)

3\. Tashir - 98 domics (98 families).

Others are spread throughout the city:

# Spitak

## The Process of Reconstruction of Public Facilities at Present

As a result of Earthquake, public facilities of the city suffered
losses: 3,340 student places (8 schools), hospitals- 160 beds (1
hospital), and polyclinics -- 250 places (1 polyclinic).

Restoration of the social sectors have resulted in replacement at the
following rates:

Schools 46 %

Hospitals 128 %

Policlinics 120 %

# Spitak

## Infrastructure and Roads at Present

The Yerevan -- Gyumri and the Yerevan -- Vanadzor roadways pass through
Spitak, and the railroad passes through Old Spitak. Residential areas of
the city are full of inter-city, intra-city, and inter-neighborhood
streets, with complete networks, the quality of which are
unsatisfactory.

At present, all existing and occupied buildings and structures are
provided with the necessary infrastructure. It should be mentioned that
all preconditions exist for the operating infrastructure (particularly
water supply, purification and treatment stations) to reach the planned
capacity if necessary capital investment can be made.

1.3 Discrepancy in Figures

The housing policy in the earthquake zone and three cities (Gyumri,
Vanadzor, Spitak) foresees a certain option which corresponds to a
certain strategic actions (i.e., carrying out new construction, building
reinforcement, completion of incomplete buildings, cleaning of the domic
areas, etc).

Depending on what numerical data lay as a basis for analysis and
calculations, the volume of the financial means needed to implement
these strategic actions changes. Connected with this, attention should
be focused on the accuracy of the numerical data relating to the
discussed problem and necessary for the calculations.

It should be mentioned that the group of the experts performing
calculations in the presented study has dealt with the discrepancies
between the data taken from different sources (see Table 1). This
circumstance substantially complicated the work and presentation of a
better justified option.

# ²ÕÛáõë³Ï 1.5

# Table 1.5

**[î²ð´ºðàôÂÚàôÜ Âì²ÚÆÜ îìÚ²ÈÜºðÆ ØÆæºô]{.underline}**

**[DISCREPANCY IN FIGURES]{.underline}**

**²Õ»ïÇ ·áïáõ ù³Ý¹í³Í, íÝ³ëí³Í ¨ Ñ³ÝÓÝí³Í ïÝ»ñÇ ýáÝ¹Á**

**EQZ Destroyed, Damaged and Delivered Housing Stock**

(µÝ³Ï³ñ³Ý³ÛÇÝ ÙÇ³íáñÝ»ñÇ ÃÇíÁ\` í»ñóí³Í »ñÏáõ ³ÕµÛáõñÝ»ñÇó)

(number of housing units from two sources)

+-------+-------+-------+-------+-------+-------+-------+-------+-------+
| **²Ý  | **À   |       | *     |       | *     |       | **    |       |
| áõÝ** | Ý¹Ñ³Ý |       | *ø³Ý¹ |       | *ìÝ³ë |       | Ð³ÝÓÝ |       |
|       | áõñ** |       | í³Í** |       | í³Í** |       | í³Í** |       |
| **N   |       |       |       |       |       |       |       |       |
| ame** | **To  |       | **D   |       | *     |       | (ÁÝ¹· |       |
|       | tal** |       | estro |       | *Dama |       | ñÏáõÙ |       |
|       |       |       | yed** |       | ged** |       | ¿     |       |
|       |       |       |       |       |       |       | 199   |       |
|       |       |       |       |       |       |       | 8Ã.-Á |       |
|       |       |       |       |       |       |       | Ù³    |       |
|       |       |       |       |       |       |       | ë³Ùµ) |       |
|       |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       | **D   |       |
|       |       |       |       |       |       |       | elive |       |
|       |       |       |       |       |       |       | red** |       |
|       |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       | (inc  |       |
|       |       |       |       |       |       |       | ludes |       |
|       |       |       |       |       |       |       | 1998  |       |
|       |       |       |       |       |       |       | par   |       |
|       |       |       |       |       |       |       | tial) |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+
|       | ²ÕµÛá |       | ²ÕµÛá |       | ²ÕµÛá |       | ²ÕµÛá |       |
|       | õñÝ»ñ |       | õñÝ»ñ |       | õñÝ»ñ |       | õñÝ»ñ |       |
|       |       |       |       |       |       |       |       |       |
|       | So    |       | So    |       | So    |       | So    |       |
|       | urces |       | urces |       | urces |       | urces |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+
|       | Î³é   | Ð³Û-  | Î³é   | Ð³Û-  | Î³é   | Ð³Û-  | Î³é   | Ð³Û-  |
|       | ³í³ñ. |       | ³í³ñ. |       | ³í³ñ. |       | ³í³ñ. |       |
|       | Í     | Ý³    | Í     | Ý³    | Í     | Ý³    | Í     | Ý³    |
|       | ñ³·Çñ | Ë³·ÇÍ | ñ³·Çñ | Ë³·ÇÍ | ñ³·Çñ | Ë³·ÇÍ | ñ³·Çñ | Ë³·ÇÍ |
|       | (     |       | (     |       | (     |       | (     |       |
|       | 1998) | A     | 1998) | A     | 1998) | A     | 1998) | A     |
|       |       | rm-PR |       | rm-PR |       | rm-PR |       | rm-PR |
|       | Go    | OYECT | Go    | OYECT | Go    | OYECT | Go    | OYECT |
|       | vern. |       | vern. |       | vern. |       | vern. |       |
|       | Prog. |       | Prog. |       | Prog. |       | Prog. |       |
|       | (     |       | (     |       | (     |       | (     |       |
|       | 1998) |       | 1998) |       | 1998) |       | 1998) |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+
| **À   | 5     | 4     | 4     | 3     | 1     | 1     | 2     | 3     |
| Ý¹Ñ³Ý | 4,787 | 5,433 | 0,030 | 0,708 | 4,757 | 4,725 | 0,346 | 1,984 |
| áõñ** |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       |       |       |
| **²Õ  |       |       |       |       |       |       |       |       |
| »ïÇ** |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       |       |       |
| **·   |       |       |       |       |       |       |       |       |
| áïÇ** |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       |       |       |
| **    |       |       |       |       |       |       |       |       |
| Total |       |       |       |       |       |       |       |       |
| EQZ** |       |       |       |       |       |       |       |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+
| **Þ   | 3     | 2     | 2     | 2     | 7,620 | 7,876 | 9,410 | 1     |
| Çñ³ÏÇ | 0,298 | 8,936 | 2,678 | 1,060 |       |       |       | 3,975 |
| Ù     |       |       |       |       |       |       |       |       |
| ³ñ½** |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       |       |       |
| **S   |       |       |       |       |       |       |       |       |
| hirak |       |       |       |       |       |       |       |       |
| m     |       |       |       |       |       |       |       |       |
| arz** |       |       |       |       |       |       |       |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+

# 

# 

# ²ÕÛáõë³Ï 1.5 (ß³ñáõÝ³ÏáõÃÛáõÝ)

# Table 1.5 (continuation)

+-------+-------+-------+-------+-------+-------+-------+-------+-------+
| **²Ý  | **À   |       | *     |       | *     |       | **    |       |
| áõÝ** | Ý¹Ñ³Ý |       | *ø³Ý¹ |       | *ìÝ³ë |       | Ð³ÝÓÝ |       |
|       | áõñ** |       | í³Í** |       | í³Í** |       | í³Í** |       |
| **N   |       |       |       |       |       |       |       |       |
| ame** | **To  |       | **D   |       | *     |       | (ÁÝ¹· |       |
|       | tal** |       | estro |       | *Dama |       | ñÏáõÙ |       |
|       |       |       | yed** |       | ged** |       | ¿     |       |
|       |       |       |       |       |       |       | 199   |       |
|       |       |       |       |       |       |       | 8Ã.-Á |       |
|       |       |       |       |       |       |       | Ù³    |       |
|       |       |       |       |       |       |       | ë³Ùµ) |       |
|       |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       | **D   |       |
|       |       |       |       |       |       |       | elive |       |
|       |       |       |       |       |       |       | red** |       |
|       |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       | (inc  |       |
|       |       |       |       |       |       |       | ludes |       |
|       |       |       |       |       |       |       | 1998  |       |
|       |       |       |       |       |       |       | par   |       |
|       |       |       |       |       |       |       | tial) |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+
|       | ²ÕµÛá |       | ²ÕµÛá |       | ²ÕµÛá |       | ²ÕµÛá |       |
|       | õñÝ»ñ |       | õñÝ»ñ |       | õñÝ»ñ |       | õñÝ»ñ |       |
|       |       |       |       |       |       |       |       |       |
|       | So    |       | So    |       | So    |       | So    |       |
|       | urces |       | urces |       | urces |       | urces |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+
|       | Î³é³  | Ð³Û-  | Î³é³  | Ð³Û-  | Î³é³  | Ð³Û-  | Î³é   | Ð³Û-  |
|       | í³ñ.Í |       | í³ñ.Í |       | í³ñ.Í |       | ³í³ñ. |       |
|       | ñ³·Çñ | Ý³    | ñ³·Çñ | Ý³    | ñ³·Çñ | Ý³    | Í     | Ý³    |
|       | (     | Ë³·ÇÍ | (     | Ë³·ÇÍ | (     | Ë³·ÇÍ | ñ³·Çñ | Ë³·ÇÍ |
|       | 1998) |       | 1998) |       | 1998) |       | (     |       |
|       |       | A     |       | A     |       | A     | 1998) | A     |
|       | Go    | rm-PR | Go    | rm-PR | Go    | rm-PR |       | rm-PR |
|       | vern. | OYECT | vern. | OYECT | vern. | OYECT | Go    | OYECT |
|       | Prog. |       | Prog. |       | Prog. |       | vern. |       |
|       | (     |       | (     |       | (     |       | Prog. |       |
|       | 1998) |       | 1998) |       | 1998) |       | (     |       |
|       |       |       |       |       |       |       | 1998) |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+
| **    | 2     | 1     | 1     | 9,365 | 5,489 | 5,419 | 1     | 1     |
| Èáéáõ | 2,318 | 4,784 | 6,829 |       |       |       | 0,137 | 5,865 |
| Ù     |       |       |       |       |       |       |       |       |
| ³ñ½** |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       |       |       |
| *     |       |       |       |       |       |       |       |       |
| *Lori |       |       |       |       |       |       |       |       |
| m     |       |       |       |       |       |       |       |       |
| arz** |       |       |       |       |       |       |       |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+
| **î³  | 1,088 | 804   | 165   | 163   | 923   | 641   | 709   | 1,074 |
| íáõßÇ |       |       |       |       |       |       |       |       |
| Ù     |       |       |       |       |       |       |       |       |
| ³ñ½** |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       |       |       |
| **Ta  |       |       |       |       |       |       |       |       |
| voush |       |       |       |       |       |       |       |       |
| m     |       |       |       |       |       |       |       |       |
| arz** |       |       |       |       |       |       |       |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+
| **    | 1,083 | 909   | 358   | 120   | 725   | 789   | 90    | 1,070 |
| ²ñ³·³ |       |       |       |       |       |       |       |       |
| ÍáïÝÇ |       |       |       |       |       |       |       |       |
| Ù     |       |       |       |       |       |       |       |       |
| ³ñ½** |       |       |       |       |       |       |       |       |
|       |       |       |       |       |       |       |       |       |
| **    |       |       |       |       |       |       |       |       |
| Araga |       |       |       |       |       |       |       |       |
| tsotn |       |       |       |       |       |       |       |       |
| m     |       |       |       |       |       |       |       |       |
| arz** |       |       |       |       |       |       |       |       |
+-------+-------+-------+-------+-------+-------+-------+-------+-------+

# ²ÕÛáõë³Ï 1.5 (ß³ñáõÝ³ÏáõÃÛáõÝ)

# Table 1.5 (continuation)

+-------+-------+-------+-------+-------+-------+-------+-------+------+
| **²Ý  | **À   |       | *     |       | *     |       | **    |      |
| áõÝ** | Ý¹Ñ³Ý |       | *ø³Ý¹ |       | *ìÝ³ë |       | Ð³ÝÓÝ |      |
|       | áõñ** |       | í³Í** |       | í³Í** |       | í³Í** |      |
| **N   |       |       |       |       |       |       |       |      |
| ame** | **To  |       | **D   |       | *     |       | (ÁÝ¹· |      |
|       | tal** |       | estro |       | *Dama |       | ñÏáõÙ |      |
|       |       |       | yed** |       | ged** |       | ¿     |      |
|       |       |       |       |       |       |       | 199   |      |
|       |       |       |       |       |       |       | 8Ã.-Á |      |
|       |       |       |       |       |       |       | Ù³    |      |
|       |       |       |       |       |       |       | ë³Ùµ) |      |
|       |       |       |       |       |       |       |       |      |
|       |       |       |       |       |       |       | **D   |      |
|       |       |       |       |       |       |       | elive |      |
|       |       |       |       |       |       |       | red** |      |
|       |       |       |       |       |       |       |       |      |
|       |       |       |       |       |       |       | (inc  |      |
|       |       |       |       |       |       |       | ludes |      |
|       |       |       |       |       |       |       | 1998  |      |
|       |       |       |       |       |       |       | par   |      |
|       |       |       |       |       |       |       | tial) |      |
+-------+-------+-------+-------+-------+-------+-------+-------+------+
|       | ²ÕµÛá |       | ²ÕµÛá |       | ²ÕµÛá |       | ²ÕµÛá |      |
|       | õñÝ»ñ |       | õñÝ»ñ |       | õñÝ»ñ |       | õñÝ»ñ |      |
|       |       |       |       |       |       |       |       |      |
|       | So    |       | So    |       | So    |       | So    |      |
|       | urces |       | urces |       | urces |       | urces |      |
+-------+-------+-------+-------+-------+-------+-------+-------+------+
|       | Î³é³  | Ð³Û   | Î³é³  | Ð³Û   | Î³é³  | Ð³Û   | Î³é³  | Ð³Û  |
|       | í³ñ.Í |       | í³ñ.Í |       | í³ñ.Í |       | í³ñ.Í |      |
|       | ñ³·Çñ | åñ    | ñ³·Çñ | åñ    | ñ³·Çñ | åñ    | ñ³·Çñ | åñá  |
|       | (     | áÛ»Ïï | (     | áÛ»Ïï | (     | áÛ»Ïï | (     | Û»Ïï |
|       | 1998) |       | 1998) |       | 1998) |       | 1998) |      |
|       |       | A     |       | A     |       | A     |       | Arm  |
|       | Go    | rm-PR | Go    | rm-PR | Go    | rm-PR | Go    | -PRO |
|       | vern. | OYECT | vern. | OYECT | vern. | OYECT | vern. | YECT |
|       | Prog. |       | Prog. |       | Prog. |       | Prog. |      |
|       | (     |       | (     |       | (     |       | (     |      |
|       | 1998) |       | 1998) |       | 1998) |       | 1998) |      |
+-------+-------+-------+-------+-------+-------+-------+-------+------+
| *     | 2     | 2     | 2     | 2     | 6,408 | 5,128 | 8,134 | 9    |
| *¶Ûáõ | 7,020 | 5,965 | 0,612 | 0,837 |       |       |       | ,610 |
| ÙñÇ** |       |       |       |       |       |       | (ï»Õ. |      |
|       |       |       |       |       |       |       | Ï³é³í |      |
| **Gyu |       |       |       |       |       |       | ³ñáõÃ |      |
| mri** |       |       |       |       |       |       | ÛáõÝ) |      |
|       |       |       |       |       |       |       | (Loc. |      |
|       |       |       |       |       |       |       | Gov.) |      |
|       |       |       |       |       |       |       |       |      |
|       |       |       |       |       |       |       | 8,171 |      |
|       |       |       |       |       |       |       | (å»ï  |      |
|       |       |       |       |       |       |       | .Ï³é³ |      |
|       |       |       |       |       |       |       | í³ñ   |      |
|       |       |       |       |       |       |       | áõÃ.) |      |
|       |       |       |       |       |       |       |       |      |
|       |       |       |       |       |       |       | (     |      |
|       |       |       |       |       |       |       | Gov.) |      |
+-------+-------+-------+-------+-------+-------+-------+-------+------+
| **êåÇ | 3,911 | 2,755 | 3,621 | 2,477 | 290   | 278   | 1,025 | 1    |
| ï³Ï** |       |       |       |       |       |       |       | ,011 |
|       |       |       |       |       |       |       |       |      |
| **Spi |       |       |       |       |       |       |       |      |
| tak** |       |       |       |       |       |       |       |      |
+-------+-------+-------+-------+-------+-------+-------+-------+------+
| *     | 8,504 | 8,290 | 4,755 | 4,673 | 3,749 | 3,617 | 5,232 | 5    |
| *ì³Ý³ |       |       |       |       |       |       |       | ,624 |
| Óáñ** |       |       |       |       |       |       |       |      |
|       |       |       |       |       |       |       |       |      |
| **    |       |       |       |       |       |       |       |      |
| Vanad |       |       |       |       |       |       |       |      |
| zor** |       |       |       |       |       |       |       |      |
+-------+-------+-------+-------+-------+-------+-------+-------+------+

**Chapter 2**

**HOUSING DATA**

1.  **Current Housing conditions and Attitudes of the Domic Population\
    With Domic Population Survey Tables\
    **

2.  **Characteristics of Beneficiaries of the EQZ Projects\
    With Beneficiary Population Survey Tables**

2.1 The Current Housing Situation and Attitudes

To design an appropriate response to the housing problems in the
earthquake zone (EQZ), policymakers need to understand the severity of
the problems that households face, as well as the potential for people
to help themselves. To date, most data sources covering the EQZ have not
contained the kinds of information that policymakers require to
formulate programs or design policies. To help rectify this situation,
the Urban Institute (UI) and the Center for Policy Analysis at the
American University of Armenia (CPA) conducted two surveys in the EQZ
during October 1998. The larger of the two surveys (491 interviews)
focused on the housing situation of domic residents in the cities of
Gyumri, Spitak, and Vanadzor. The smaller survey (238 interviews)
targeted households that have benefited from government housing programs
in the same three cities since 1992. By combining this new data with
existing data sources, the UI/CPA project team can provide the
government with useful insights into the housing situation of EQZ
residents.[^2]

## **Domic Household Characteristics**

The domic population shares many of the characteristics of the general
poverty population in the country. For example, a domic household has,
on average, about 4.4 persons, including 1.6 children (see Table 1). In
1996, the average household size for the country was just over 3.9
persons (with 1.3 children on average); however, for those households
classified as very poor, the respective figures were 4.5 persons, and
1.6 children\--figures that are comparable to those found in the domic
survey. The incidence of poverty throughout the entire EQZ in 1996 was
only slightly higher than that of the entire country. About 63 percent
of the urban population in the EQZ was below the national poverty line,
compared to 59 percent of the urban population in all of Armenia.[^3]

Within the domic population, the overall age of the primary breadwinner
in the household is about 47 years, and about 30 percent of these
primary breadwinners are females. Of the three cities, Vanadzor is the
most unusual in that it has a large number of female primary
breadwinners (about 46 percent of households), and the average age of
primary breadwinners is somewhat lower at around 44 years due to the
presence of a relatively large number of households in the 30-39 years
of age category.

The tenure situation of domic residents is complicated by the "temporary
housing" label of domics, and it raises the issue of what formal and
informal property rights domic residents hold. About 54 percent of the
domic households in the three cities consider themselves to be owners of
their units. The remainder see themselves as renting from the government
or occupying their unit rent-free. In Vanadzor, nearly two-thirds of the
households believed they were renting their unit from the government. In
sharp contrast, only 3 percent of households in Gyumri thought the
government was their landlord. In Gyumri, about two-thirds of the
households see themselves as owners.

## **Domic Housing characteristics**

The housing in domic "neighborhoods" is not easy to classify. Some
neighborhoods contain row after row of closely packed domics that
outwardly have not changed much over the past decade. On the other hand,
some individual units and neighborhoods show signs of considerable
investment over the years as residents have added onto their original
metal or wood structures. In extreme cases, the original domic has been
replaced entirely by a new structure. The UI/CPA team attempted to
classify units based on the material of the original core unit. This
approach yielded three main types of units: metal, wood, and "shack."
The latter was a generic term for units that the team could not classify
as metal or wooden containers. Overall, about 61 percent of the
households occupy metal-based domics (see Table 2). About 31 percent
live in wood-based domics and roughly 8 percent occupy shacks or other
kinds of structures. Compared to Gyumri and Spitak, Vanadzor has a much
larger share of sampled units that are metal-based (about 73 percent).

Domics tend to be small, but there are exceptions. By examining the
number of rooms and amount of total space, the variety in the physical
characteristics of domics becomes apparent. Overall, about half of all
units have two rooms, a little less than a quarter have only one room,
and slightly more than a quarter have three or more rooms. While about a
fourth of the units have less than 20 square meters of total space,
about ten percent have 60 or more square meters. Considerable variation
in available space also exists among the cities. Spitak units have more
rooms on average (about 2.5) than the units in the other two cities (an
average of about 2 rooms per unit for both Gyumri and Vanadzor).

Although domic households tend to have less space per capita than
households in other types of single-family homes, they have an amount
that is only slightly smaller than that of poor households living in
apartments. The average space per resident in the domic survey is 8.9
square meters. This is fairly consistent with 1996 figures that show,
for the country as a whole, the living space per capita was 9.8 square
meters for apartments, 14.2 square meters for single-family homes, 6.7
square meters for dormitories, 9.5 square meters for "wagon or
containers" (i.e., domics), and 7.4 square meters for other temporary
housing. In 1996, the apartments of urban households living in poverty
averaged roughly 9 square meters.[^4]

The domic survey provides new quantitative evidence that supports
earlier general observations made by World Bank consultant, Deniz
Baharoglu, who noted the following in a September 1997 report entitled
"The Armenia Housing Sector and Earthquake Zone Housing Issues":

"Different parts of the \[earthquake zone\] housing stock show different
deficiencies in regard to infrastructure provision: all housing
constructed or renovated after the earthquake is connected to basic
infrastructure. Even so, the network is in poor shape. Domiks, on the
other hand, either have no access to infrastructure or have connected
their dwellings through self-help methods which are technically unsound.
Local officials indicated that on certain sites the demand for
connections is much higher than the capacity of collectors and water
pipes\...."[^5]

Overall, about 71 percent of the domic households get their drinking
water from the state central system. This does not, however, tell the
whole story. Only about 58 percent of domic households have cold water
piped inside their unit. Of those without cold water available inside
their units, about 86 percent share their water source with another
unit. In comparison, about 94 percent of urban households in Armenia,
and about 91 percent of urban households in the EQZ, have a normally
functioning water supply. The term "normally functioning" is used by the
Ministry of Statistics to distinguish households with operating systems
from those households who have connections but no service.

The story is similar with regard to sanitation facilities. Only about 55
percent of households have a toilet inside their unit. About 41 percent
of those without a toilet inside their unit share a toilet with another
household. In Spitak, about three-fifths of the households do not have a
toilet inside their unit, but households there are more likely than
households in other cities to have private outside facilities.

Many domics also suffer from other poor facilities. Table 2 shows that
while domics have a relatively high incidence of electricity connections
(about 96 percent), about half do not have a kitchen inside their unit
and over a fifth do not have a bath or shower inside their home. Hot
water inside a home is very rare.

During winter, domic households heat their homes primarily with kerosene
and wood. About 70 percent use kerosene and about 67 percent use wood.
Electricity is also a significant heating fuel that is used by over a
fifth of the households. Another 10 percent of households use coal or
other fuels to heat their homes.

## **Turnover, Migration, and Characteristics of Previous Home**

Although most domic occupants lost their home in the earthquake, a
fairly large number (about 17 percent) did not. While nearly all the
domic households in Spitak lost their homes, only half of the domic
households in Vanadzor did so. These curious findings can to a large
extent be explained by differences among the cities in housing stock
turnover. Significant amounts of turnover may become a targeting issue,
as the historic link between earthquake victims and domics breaks down
over time.

Because domic communities have been around for nearly a decade, it is
not surprising to discover that there has been turnover in the domic
housing stock. One way to view turnover is to examine the length of time
spent in the unit by the main breadwinner in the household. Move-in
dates that occur well after the date of the earthquake imply a domic may
have changed hands. Table 3 shows that the main breadwinners of nearly
11 percent of all households moved in during the last 5 years. In
Vanadzor, where many households are not direct earthquake victims,
closer to 20 percent moved in during the last 5 years. Furthermore,
while about 97 percent of the previous residences of households in both
Gyumri and Spitak were located in the same city, about 12 percent of
Vanadzor households last lived in a different city or different country.
Finally, only 3 to 4 percent of households in Gyumri and Spitak have
lived in the same city for less than ten years, compared to about 11
percent of the households in Vanadzor.

The previous tenure and structure type measures in Table 3 help to
demonstrate the decline in the quality of life of domic residents.
Clearly, previous experiences play an important role in shaping a
household's perception of its own situation. About 72 percent of all
domic households were previously owners. Almost two-thirds occupied
apartments, while another quarter occupied single-family homes. However,
because of turnover, care must be taken not to confuse this description
of previous units with a description of the units households occupied
just prior to the earthquake. For example, in Spitak, over one-fifth of
the previous residences were domics. In other words, a substantial
amount of turnover has ocurred within the domic population. About 7
percent of all previous residences were domics.

# 

# 

# 

# **Expenditures, Income, and Assets**

Information on the financial well-being of households is important for
designing assistance programs, estimating program costs, and targeting
potential beneficiaries. Due to underreporting of income, the wealth
measures presented in this report focus mainly on expenditures. This
report also analyzes income sources and types of assets to develop a
better picture of how domic households are coping with hardship.

Table 4 summarizes both non-housing and housing-related expenditures.
Overall, non-housing expenditures average \$133 a month, and range from
\$113 for Vanadzor to \$162 for Spitak. Total housing-related
expenditures are presented with and without heating fuel because heating
fuel is such an enormous part of a household's budget during the winter
months. Housing expenses nearly triple during winter as a result of
heating costs (from an overall average of \$14 to \$39).

Total expenditures equal the sum of non-housing and housing-related
expenditures, and are presented in Table 5. Overall, total monthly
expenditures with heating fuel (\$171) are about 17 percent higher than
total monthly expenditures without heating fuel (\$146). These averages,
however, obscure the fact that a large share of households spend
considerably less. For example, the expenditure distributions suggest
that roughly a quarter of all households spend less than \$60 per month
during winter and a similar size group spends less than \$40 during
other months. The median values for total expenditures are considerably
lower than the corresponding mean values. Overall, the median value for
total monthly

expenditures is \$121 with heating fuel, and \$92 without heating fuel

The most important kinds of income support from the State in terms of
participation (see Table 6a) are pensions (about 40 percent), disability
payments (about 18 percent), and child support (about 69 percent). Table
6b shows additional income sources for domic households. In addition to
highlighting the importance of remittances, charity, and in-kind
assistance, the table points out that three-fifths of all households are
generating money by selling off personal assets. It is unclear if
households are using personal assets as a means of saving or if they are
being forced to reduce their wealth holdings.

Table 7 lists some surprising assets held by domic households. Almost 6
percent of them own other homes, and another 5 percent possess
apartments. In Vanadzor, about 11 percent own other homes, and nearly 13
percent own apartments. In Spitak, over two-thirds of the households own
land. Clearly, the government needs to consider the implications of such
property assets in setting eligibility criteria for housing assistance.

Finally, domic residents perceive themselves to be rather poor overall.
Table 8 presents a subjective self-evaluation of domic households'
financial well-being. It shows that about half of all households rate
themselves as being poor, and an additional 31 percent place themselves
in the lower-middle income category. This is fairly consistent with a
similar kind of question asked in the 1996 Living Standards Study. In
that study, about 42 percent of the households living in poverty rated
their current economic situation as "bad," and roughly 43 percent
classified their situation as "rather bad."

**Attitudes Towards Government Assistance**

The overall attitude of the domic population is that the government has
an obligation to help them acquire a better home. This view is mixed
with some skepticism about the ability of the government to deliver on
its promises, and there is no universal agreement on which assistance
approach is most desirable. Because of the inability to probe deeply or
pose follow-up questions, a household survey format is not always the
best way to gather opinions. The UI/CPA team tried to overcome this
problem by asking for similar information in different ways. Regardless
of its limitations, the household survey format has the important virtue
of representativeness.

The share of domic households that have at least one member on the
waiting list (about 42 percent) appears to be small compared to the
number of households stating they lost their homes in the earthquake
(about 83 percent). The waiting list figures presented in Table 9,
however, are consistent with the turnover story presented earlier. In
Vanadzor, as a consequence of turnover, only half of the households
stated they lost their homes in the earthquake; as a result, it is not
surprising that the share of households in Vanadzor reporting having a
family member on the waiting list is only 27 percent (compared to 47
percent in Gyumri and 44 percent in Spitak). The relatively small
proportion of households that are on the waiting list raises questions
about what the government's obligations are to the domic population.

The other intriguing finding revealed by Table 9 is that half of the
households on the waiting list do not know the waiting list category to
which they belong. In both Spitak and Vanadzor, over 70 percent of
households did not know their category. If this situation as depicted by
the survey is accurate, many households do not have any idea of their
relative priority for housing assistance, and this may affect their
behavior with respect to seeking alternative housing solutions on their
own.

Only about a fourth of domic households responded positively when asked
if the government will be able to provide them with free housing in the
next ten years. (Table 10). About 57 percent do not believe this and an
additional 19 percent do not know what to believe. Again, the high
turnover in Vanadzor may explain why a higher percentage of its
households (68 percent) responded "no" compared to the other cities (not
as many may believe they are entitled to assistance). On the other hand,
Vanadzor households are no different from others in that 92 percent of
them believe the government should help them buy a home. Overall, 89
percent of domic households feel this way. One possible explanation for
this apparent contradiction is that Vanadzor residents may have
interpreted the question as applying to the general role of government,
as opposed to whether the government should presently be helping them.
Therefore, some caution should be used in interpreting these responses.
Over half of the households who believe the government should help with
purchases feel the government should be responsible for 91 to 100
percent of the cost. However, a sizable portion (about 20 percent) think
the government should only be responsible for half the cost or less.

To get at how much it would cost to get households to relocate to
permanent housing, we used two versions of a question, and they produced
essentially the same results. One version was worded as if the household
was receiving cash assistance from the government; the other was worded
as if the household had to accumulate its own money. Table 11a
summarizes the results. Regardless of the question, almost a quarter of
all households need only \$3000 or less, and about half would require
\$5000 or less. On the other hand, around 30 percent say they need over
\$9000. This raises the overall average amount needed to move (without
government assistance) to \$7256. Households in Spitak, however, feel
they need almost twice as much money as the households in Vanadzor
(averages of \$9654 and \$5399, respectively).

Table 11b presents yet another attempt to understand the extent of
contributions expected from government. (Viewed in reverse, it is an
attempt to comprehend the willingness of households to contribute to
improving their own situation.) Using a "bidding sequence" where the
interviewer upped the offer of assistance after each refusal of an
earlier offer, the UI/CPA team was able to produce the results shown. A
key feature of this question was a time constraint: the move had to
occur in the upcoming year. The results complement the Table 11a
findings in that they suggest a substantial share of households could be
rehoused for an amount less than the cost of building a new unit. About
a fourth of all households would accept a third of the price of a new or
existing unit, and another 12 percent would accept assistance amounting
to half the cost. About a third of all households, however, refused all
of the offers. About 6 percent would have accepted one of the offers if
they had more time to accumulate their contribution. This suggests that
programs based on household contributions should be sensitive to the
time it may take for households to take advantage of a program.

Domic households, in general, did not respond positively to the idea of
receiving various traditional kinds of housing assistance. Table 12
summarizes the acceptability of alternative kinds of assistance. Because
there is some question as to whether respondents fully understood the
programs being described to them, it is probably safest to focus on the
incidence of "not acceptable" responses. Thus, the 53 percent of
households who consider a rental allowance program to be unacceptable,
might best be interpreted as households who are against the general
concept of rental assistance. Similarly, the 48 percent who find
up-front assistance with market rate loans objectionable, might be more
safely interpreted as those who are against any kind of loan. Upgrading
domics is an easier concept to grasp, but it can hardly be considered a
popular choice with a 58 percent rejection rate. The least favorite
option (and one that is also easy to understand) is moving a domic to an
improved site\--almost four-fifths of all households did not find this
to be an acceptable solution.

Finally, the poor current housing conditions of domic households are
reflected in how they rank the features they desire in their next home
(Table 13). The availability of basic services such as water,
electricity, and sanitation obtained the most votes among the first most
important features and the second most important features (32 percent
and 21 percent, respectively). Closeness to schools also ranks high
among first and second most important features. The availability of
public transportation and access to shopping, services, and health
facilities were ranked second and third by a sizable share of
households. Most households want their next home to be in the same city,
and most of these want to stay in the same neighborhood. Overall,
households are not adverse to the idea of moving to an older, existing
housing unit provided by the government\--about 72 percent of households
find this acceptable.

  ------------------ ---------- ------------ ------------ -------------- ----------- ---------
  **Table 2.1**                                                                      

  **Household                                                                        
  Characteristics:                                                                   
  1998 (percentage                                                                   
  of households)**                                                                   

                                                                                     

                                             **City**                                

                                **Gyumri**   **Spitak**   **Vanadzor**   **Total**   

                                                                                     

  **Household Size                                                                   
  (persons)**                                                                        

  1                             5.3          4.4          4.5            4.9         

  2                             12.8         7.9          11.6           11.4        

  3                             12.5         15.8         15.2           13.8        

  4                             24.2         24.6         23.2           24          

  5                             19.6         22.8         24.1           21.4        

  6                             14.7         14.9         13.4           14.5        

  7                             6            6.1          5.4            5.9         

  8 or more                     4.9          3.5          2.7            4.1         

  mean                          4.39         4.41         4.29           4.37        

                                                                                     

  **Number of                                                                        
  Children**                                                                         

  mean                          1.56         1.63         1.71           1.61        

                                                                                     

  **Age of Head                                                                      
  (years)**                                                                          

  less than 20                  0            0            0              0           

  20-29                         6.1          10.5         7.1            7.3         

  30-39                         23.5         21.1         35.7           25.7        

  40-49                         22.3         37.7         30.4           27.8        

  50-59                         21.2         11.4         12.5           16.9        

  60 or more                    26.9         19.3         14.3           22.2        

  mean                          48.8         46.2         43.9           47.1        

                                                                                     

  **Sex of Head**                                                                    

  female                        26.2         21.9         46.4           29.9        

  male                          73.8         78.1         53.6           70.1        

                                                                                     

  **Tenure**                                                                         

  owner                         64.5         55.4         26.1           53.6        

  rent from private                          0            0              0           0
  owner                                                                              

  rent from                                  3.1          17.9           64.9        20.6
  government                                                                         

  rent-free                     32.4         26.8         9              25.8        

                                                                                     

                                                                                     

  Source: October                                                                    
  1998 Domic                                                                         
  Household Survey                                                                   
  conducted by the                                                                   
  Urban Institute                                                                    

  and the Center for                                                                 
  Policy Analysis.                                                                   

                                                                                     

  All amounts are in                                                                 
  US dollars.                                                                        

                                                                                     
  ------------------ ---------- ------------ ------------ -------------- ----------- ---------

+-----------+-----------+--------+--------+---------+--------+--------+
| ###       |           |        |        |         |        |        |
| Table 2.2 |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| **Housing |           |        |        |         |        |        |
| Charact   |           |        |        |         |        |        |
| eristics: |           |        |        |         |        |        |
| 1998      |           |        |        |         |        |        |
| (p        |           |        |        |         |        |        |
| ercentage |           |        |        |         |        |        |
| of        |           |        |        |         |        |        |
| hous      |           |        |        |         |        |        |
| eholds)** |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
|           |           |        | **     |         |        |        |
|           |           |        | City** |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
|           |           | **Gy   | **Sp   | # **Van | **T    |        |
|           |           | umri** | itak** | adzor** | otal** |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| **        |           |        |        |         |        |        |
| Structure |           |        |        |         |        |        |
| Type**    |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| metal     |           | 57.1   | 59.4   | 72.7    | 61.2   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| wood      |           | 36.4   | 27.7   | 20.9    | 30.9   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| shack     |           | 5.4    | 7.9    | 4.5     | 5.7    |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| other     |           | 1.1    | 5      | 1.8     | 2.1    |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| **Number  |           |        |        |         |        |        |
| of        |           |        |        |         |        |        |
| Rooms**   |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 1         |           | 27.2   | 14.9   | 22.3    | 23.2   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 2         |           | 52.1   | 30.7   | 63.4    | 49.7   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 3         |           | 18.5   | 42.1   | 9.8     | 22     |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 4 or more |           |        | 2.3    | 12.3    | 4.5    | 5.1    |
+-----------+-----------+--------+--------+---------+--------+--------+
| mean      |           | 1.95   | 2.51   | 1.96    | 2.08   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| **Total   |           |        |        |         |        |        |
| Space     |           |        |        |         |        |        |
| (m2)**    |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| less than |           |        | 7.5    | 22.8    | 4.5    | 10.4   |
| 15        |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 15-19     |           | 16.6   | 5.3    | 20.5    | 14.9   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 20-29     |           | 20     | 15.8   | 42      | 24     |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 30-39     |           | 27.9   | 14.9   | 14.3    | 21.8   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 40-49     |           | 12.5   | 12.3   | 9.8     | 11.8   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 50-59     |           | 7.2    | 6.1    | 7.1     | 6.9    |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 60-69     |           | 3.4    | 6.1    | 0       | 3.3    |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| 70 or     |           |        | 4.9    | 16.7    | 1.8    | 6.9    |
| more      |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| mean      |           | 32.4   | 34.8   | 28.4    | 32     |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| **Space   |           |        |        |         |        |        |
| per       |           |        |        |         |        |        |
| Capita    |           |        |        |         |        |        |
| (m2)**    |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| mean      |           | 9.1    | 9.3    | 7.8     | 8.9    |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| **F       |           |        |        |         |        |        |
| acilities |           |        |        |         |        |        |
| Av        |           |        |        |         |        |        |
| ailable** |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| **Inside  |           |        |        |         |        |        |
| House**   |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| kitchen   |           | 46.4   | 43.9   | 60.7    | 49.1   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| ba        |           |        | 20     | 25.4    | 23.2   | 22     |
| th/shower |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| telephone |           |        | 14     | 24.6    | 29.5   | 20     |
+-----------+-----------+--------+--------+---------+--------+--------+
| hot water |           | 0      | 1.8    | 4.5     | 1.4    |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| cold      |           |        | 68.7   | 40.4    | 51.8   | 58.2   |
| water     |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| el        |           |        | 96.2   | 96.5    | 93.8   | 95.7   |
| ectricity |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| toilet    |           | 61.1   | 40.4   | 57.1    | 55.4   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
|           |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| **Share   |           |        | 91     | 75.8    | 91.1   | 86     |
| Outside   |           |        |        |         |        |        |
| Water     |           |        |        |         |        |        |
| Pipe**    |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| (h        |           |        |        |         |        |        |
| ouseholds |           |        |        |         |        |        |
| without   |           |        |        |         |        |        |
| inside    |           |        |        |         |        |        |
| cold      |           |        |        |         |        |        |
| water     |           |        |        |         |        |        |
| only)     |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| **Share   |           | 40.8   | 23.2   | 64.6    | 40.5   |        |
| S         |           |        |        |         |        |        |
| anitation |           |        |        |         |        |        |
| F         |           |        |        |         |        |        |
| acility** |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| (h        |           |        |        |         |        |        |
| ouseholds |           |        |        |         |        |        |
| without   |           |        |        |         |        |        |
| inside    |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| toilet    |           |        |        |         |        |        |
| only)     |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| *         |           |        |        |         |        |        |
| *Drinking |           |        |        |         |        |        |
| Water     |           |        |        |         |        |        |
| Source**  |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| St        |           | 76.2   | 73.7   | 55.4    | 70.9   |        |
| ate-owned |           |        |        |         |        |        |
| central   |           |        |        |         |        |        |
| system    |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| **Heating |           |        |        |         |        |        |
| Fuel**    |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| (can have |           |        |        |         |        |        |
| more than |           |        |        |         |        |        |
| one)      |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| Kerosene  |           | 78.9   | 64     | 55.4    | 70.1   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| El        |           | 19.6   | 18.4   | 26.8    | 21     |        |
| ectricity |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| Coal      |           | 1.5    | 1.8    | 1.8     | 1.6    |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| Wood      |           | 55     | 83.3   | 81.3    | 67.6   |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| Other     |           | 8.4    | 9.6    | 7.1     | 8.4    |        |
+-----------+-----------+--------+--------+---------+--------+--------+
|           |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+
| Source:   |           |        |        |         |        |        |
| October   |           |        |        |         |        |        |
| 1998      |           |        |        |         |        |        |
| Domic     |           |        |        |         |        |        |
| Household |           |        |        |         |        |        |
| Survey    |           |        |        |         |        |        |
| conducted |           |        |        |         |        |        |
| by the    |           |        |        |         |        |        |
| Urban     |           |        |        |         |        |        |
| Institute |           |        |        |         |        |        |
| and the   |           |        |        |         |        |        |
| Center    |           |        |        |         |        |        |
| for       |           |        |        |         |        |        |
| Policy    |           |        |        |         |        |        |
| Analysis. |           |        |        |         |        |        |
+-----------+-----------+--------+--------+---------+--------+--------+

  -------------------- -------- ------------ ------------ -------------- ----------- --------
  **Table 2.3**                                                                      

  **Migration and                                                                    
  Characteristics of                                                                 
  Previous Home: 1998                                                                
  (percentage of                                                                     
  households)**                                                                      

                                **Gyumri**   **Spitak**   **Vanadzor**   **Total**   

                                                                                     

  **Location of                                                                      
  Previous Residence**                                                               

  same neighborhood,                         48.3         51.8           41.1        47.5
  same city                                                                          

  different                                  48.7         45.6           47.3        47.7
  neighborhood, same                                                                 
  city                                                                               

  different city                1.5          2.6          8              3.3         

  different country             1.5          0            3.6            1.6         

  **Lost Home in                                                                     
  Earthquake**                                                                       

  yes                           89.8         98.2         50             82.7        

  no                            10.2         1.8          50             17.3        

  **Previous Tenure**                                                                

  owned                         78.1         71.7         56.3           71.6        

  rented                        19.2         10.6         35.7           21          

  occupied rent-free            2.6          17.7         8              7.3         

  **Structure Type**                                                                 

  multi-family                  87.2         25.9         50             64.6        

  single-family                 9.8          45.5         42.9           25.6        

  dormitory                     1.1          2.7          1.8            1.6         

  domic                         1.9          21.4         5.4            7.2         

  other                         0            4.5          0              1           

  **Length of Time in                                                                
  Domic (months)**                                                                   

  12 or less                    1.5          1.8          3.6            2           

  13-36                         2.3          3.5          7.1            3.7         

  37-60                         3.8          2.7          8.9            4.7         

  61-84                         3.8          9.7          14.3           7.6         

  85-108                        12.9         17.7         23.2           16.4        

  109-120                       75.8         64.6         42.9           65.6        

  mean                          110          106          93             105         

  **Length of Time in                                                                
  City (months)**                                                                    

  12 or less                    0            0.9          0              0.2         

  13-120                        3            2.6          10.7           4.7         

  121-240                       5.3          5.3          14.3           7.3         

  241-360                       11.7         12.3         25             14.9        

  361-480                       26.5         21.1         28.6           25.7        

  481-600                       24.2         28.9         13.4           22.9        

  601-720                       17.4         9.6          2.7            12.2        

  721-840                       9.8          10.5         3.6            8.6         

  841 or more                   1.9          8.8          1.8            3.5         

  Mean                          509          530          369            482         

                                                                                     

  Source: October 1998                                                               
  Domic Household                                                                    
  Survey conducted by                                                                
  the Urban Institute                                                                

  and the Center for                                                                 
  Policy Analysis.                                                                   
  -------------------- -------- ------------ ------------ -------------- ----------- --------

  ------------------- --- ------------- -------- ------------- -------- -------------- -------- ------------- --------
  **Table 2.4**                                                                                               

  **Monthly Household                                                                                         
  Expenditures:                                                                                               
  September 1998**                                                                                            

                                                                                                              

                                                                                                              

                          **Gyumri**             **Spitak**             **Vanadzor**            **Total**     

                          Percent       Amount   Percent       Amount   Percent        Amount   Percent       Amount

                          Reporting     When     Reporting     When     Reporting      When     Reporting     When

                          Expenditure   Paid     Expenditure   Paid     Expenditure    Paid     Expenditure   Paid

                                        (mean)                 (mean)                  (mean)                 (mean)

  **Non-Housing                                                                                               
  Expenditures**                                                                                              

  Total                                 129                    162                     113                    133

  Selected Items                                                                                              

  food                    86            64       88            54       98             55       89            60

  clothing                25            62       35            98       34             63       30            72

  personal supplies       78            15       81            18       83             11       80            15

  health                  27            42       25            39       35             23       29            36

  transportation          48            14       47            20       54             10       49            14

  education               37            28       46            39       43             16       41            28

                                                                                                              

                                                                                                              

  **Housing-Related                                                                                           
  Expenditures**                                                                                              

                                                                                                              

  rent                    2             23       26            5        44             2        17            4

  cooking fuel            42            10       32            10       34             8        38            10

  electricity             85            9        82            8        79             7        83            8

  water                   59            2        78            2        43             2        60            2

  sewage                  5             4        12            2        10             1        8             3

  trash collection        27            1        63            1        26             1        35            1

  telephone               14            3        23            4        27             4        19            4

  heating fuel                          85       32            92       37             89       22            87
  (during winter)                                                                                             

                                                                                                              

  total with heating                    41                     42                      30                     39
  fuel                                                                                                        

  total without                                  15                     14                      11            
  heating fuel                                                                                                

                                                                                                              

                                                                                                              

  Source: October                                                                                             
  1998 Domic                                                                                                  
  Household Survey                                                                                            
  conducted by the                                                                                            
  Urban Institute                                                                                             

  and the Center for                                                                                          
  Policy Analysis.                                                                                            
  ------------------- --- ------------- -------- ------------- -------- -------------- -------- ------------- --------

+--------------------+-------+-------+------+---------+--------------+
| **Table 2.5**      |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
| **Total Monthly    |       |       |      |         |              |
| Expenditures with  |       |       |      |         |              |
| and without        |       |       |      |         |              |
| Heating Fuel: 1998 |       |       |      |         |              |
| (percentage**      |       |       |      |         |              |
|                    |       |       |      |         |              |
| **of households)** |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
|                    |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
|                    |       | **Gyu | **   | **Van   | **Total**    |
|                    |       | mri** | Spit | adzor** |              |
|                    |       |       | ak** |         |              |
+--------------------+-------+-------+------+---------+--------------+
|                    |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
| **Amount Including |       |       |      |         |              |
| Heating Fuel       |       |       |      |         |              |
| (\$)**             |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
| 0-10               |       | 3.8   | 0.9  | 3.6     | 3.1          |
+--------------------+-------+-------+------+---------+--------------+
| 11-20              |       | 3.4   | 3.5  | 2.7     | 3.3          |
+--------------------+-------+-------+------+---------+--------------+
| 21-30              |       | 7.5   | 4.4  | 3.6     | 5.9          |
+--------------------+-------+-------+------+---------+--------------+
| 31-40              |       | 5.3   | 0    | 3.6     | 3.7          |
+--------------------+-------+-------+------+---------+--------------+
| 41-50              |       | 5.7   | 0.9  | 1.8     | 3.7          |
+--------------------+-------+-------+------+---------+--------------+
| 51-60              |       | 6.8   | 5.3  | 7.1     | 6.5          |
+--------------------+-------+-------+------+---------+--------------+
| 61-70              |       | 4.2   | 7.9  | 5.4     | 5.3          |
+--------------------+-------+-------+------+---------+--------------+
| 71-80              |       | 2.6   | 5.3  | 0.9     | 2.9          |
+--------------------+-------+-------+------+---------+--------------+
| 81-100             |       | 7.5   | 4.4  | 14.3    | 8.4          |
+--------------------+-------+-------+------+---------+--------------+
| 101-150            |       | 14    | 16.7 | 22.3    | 16.5         |
+--------------------+-------+-------+------+---------+--------------+
| 151-200            |       | 12.5  | 12.3 | 12.5    | 12.4         |
+--------------------+-------+-------+------+---------+--------------+
| 201-250            |       | 8.3   | 8.8  | 8.9     | 8.6          |
+--------------------+-------+-------+------+---------+--------------+
| more than 250      |       | 18.5  | 29.8 | 13.4    | 20           |
+--------------------+-------+-------+------+---------+--------------+
| mean               |       | 170   | 202  | 142     | 171          |
+--------------------+-------+-------+------+---------+--------------+
|                    |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
|                    |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
| **Amount Excluding |       |       |      |         |              |
| Heating Fuel       |       |       |      |         |              |
| (\$)**             |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
| 0-10               |       | 4.9   | 1.8  | 3.6     | 3.9          |
+--------------------+-------+-------+------+---------+--------------+
| 11-20              |       | 8.3   | 5.3  | 5.4     | 6.9          |
+--------------------+-------+-------+------+---------+--------------+
| 21-30              |       | 8.3   | 5.3  | 6.3     | 7.1          |
+--------------------+-------+-------+------+---------+--------------+
| 31-40              |       | 7.9   | 5.3  | 5.4     | 6.7          |
+--------------------+-------+-------+------+---------+--------------+
| 41-50              |       | 4.9   | 6.1  | 3.6     | 4.9          |
+--------------------+-------+-------+------+---------+--------------+
| 51-60              |       | 6     | 4.4  | 5.4     | 5.5          |
+--------------------+-------+-------+------+---------+--------------+
| 61-70              |       | 5.3   | 2.6  | 5.4     | 4.7          |
+--------------------+-------+-------+------+---------+--------------+
| 71-80              |       | 4.2   | 2.6  | 10.7    | 5.3          |
+--------------------+-------+-------+------+---------+--------------+
| 81-100             |       | 6.4   | 9.6  | 7.1     | 7.3          |
+--------------------+-------+-------+------+---------+--------------+
| 101-150            |       | 13.6  | 12.3 | 16.1    | 13.8         |
+--------------------+-------+-------+------+---------+--------------+
| 151-200            |       | 11.3  | 10.5 | 14.3    | 11.8         |
+--------------------+-------+-------+------+---------+--------------+
| 201-250            |       | 4.2   | 12.3 | 8       | 6.9          |
+--------------------+-------+-------+------+---------+--------------+
| more than 250      |       | 14.7  | 21.9 | 8.9     | 15.1         |
+--------------------+-------+-------+------+---------+--------------+
| mean               |       | 144   | 175  | 123     | 146          |
+--------------------+-------+-------+------+---------+--------------+
|                    |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
|                    |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
| Source: October    |       |       |      |         |              |
| 1998 Domic         |       |       |      |         |              |
| Household Survey   |       |       |      |         |              |
| conducted by the   |       |       |      |         |              |
| Urban Institute    |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+
| and the Center for |       |       |      |         |              |
| Policy Analysis.   |       |       |      |         |              |
+--------------------+-------+-------+------+---------+--------------+

  ------------------- --- ------------ ------------ -------------- ------------ ------------ -------------- -----------
  **Table 2.6**                                                                                             

  **Types of State                                                                                          
  Assistance                                                                                                
  Received: 1998                                                                                            
  (percentage of                                                                                            
  households)**                                                                                             

                          **Gyumri**   **Spitak**   **Vanadzor**   **Total**                                

                                                                                                            

  **Assistance Type**                                                                                       

  pensions                47.9         29.8         31.8           40.3                                     

  disability payments     16.9         25.4         11.8           17.8                                     

  child support           68.5         64           75.5           69                                       

  single mother                        4.6          0.9            9.1          4.8                         
  support                                                                                                   

  unemployment            6.5          5.3          8.2            6.6                                      

  scholarship             3.1          2.6          1.8            2.7                                      

  other                   1.9          9.6          0.9            3.5                                      

                                                                                                            

  Source: October                                                                                           
  1998 Domic                                                                                                
  Household Survey                                                                                          
  conducted by the                                                                                          
  Urban Institute                                                                                           

  and the Center for                                                                                        
  Policy Analysis.                                                                                          

                                                                                                            

                                                                                                            

                                                                                                            

  **Other Types of                                                                                          
  Income: 1998                                                                                              
  (percentage of                                                                                            
  households)**                                                                                             

                                                                   **Gyumri**   **Spitak**   **Vanadzor**   **Total**

                                                                                                            

  **Income Source**                                                                                         

  sale of house,                                                                1            2              1
  dacha, land                                                                                               

  sale of personal                                                                                          
  valuables (car,                                                                                           
  jewelry, furniture,                                                                                       
  etc.)                                                                                                     

  rental of property,                                                                        5              7
  machinery, or other                                                                                       
  assets                                                                                                    

  interest and                                                     6            1            5              4
  dividends                                                                                                 

  assistance from                                                                            26             16
  relatives/friends                                                                                         
  in Armenia                                                                                                

  assistance from                                                                                           9
  relatives/friends                                                                                         
  living outside                                                                                            
  Armenia                                                                                                   

  alimony                                                          1            1            2              1

  money from charity                                               26           23           36             27

  other                                                            2            15           3              5

                                                                                                            

  received any food,                                                                                        
  clothing, medicine,                                                                                       
  medical care, or                                                                                          
  other                                                                                                     

  in-kind assistance                                                                                        
  from relatives,                                                                                           
  friends,                                                                                                  
  humanitarian                                                                                              

  organizations, or                                                                          27             18
  others during the                                                                                         
  past month                                                                                                

                                                                                                            

                                                                                                            

  Source: October                                                                                           
  1998 Domic                                                                                                
  Household Survey                                                                                          
  conducted by the                                                                                          
  Urban Institute                                                                                           

  and the Center for                                                                                        
  Policy Analysis.                                                                                          
  ------------------- --- ------------ ------------ -------------- ------------ ------------ -------------- -----------

  --------------- --------- ------------ ------------ -------------- ----------- ---------
  **Table 2.7**                                                                  

  **Assets: 1998                                                                 
  (percentage of                                                                 
  households)**                                                                  

                                                                                 

                                                                                 

                            **Gyumri**   **Spitak**   **Vanadzor**   **Total**   

                                                                                 

  **Asset Type**                                                                 

  other house                            1.5          9.6            10.7        5.5

  apartment                 2.6          1.8          12.5           4.7         

  dacha                     0.4          1.8          0              0.6         

  land                      2.6          68.4         10.7           19.8        

  automobile                8.7          11.4         6.3            8.8         

  motorcycle                1.5          0.9          0              1           

                                                                                 

  Source: October                                                                
  1998 Domic                                                                     
  Household                                                                      
  Survey                                                                         
  conducted by                                                                   
  the Urban                                                                      
  Institute                                                                      

  and the Center                                                                 
  for Policy                                                                     
  Analysis.                                                                      
  --------------- --------- ------------ ------------ -------------- ----------- ---------

  --------------- --------- ------------ ------------ -------------- ----------- ---------
  **Table 2.8**                                                                  

  **Perceived                                                                    
  Financial                                                                      
  Status: 1998                                                                   
  (percentage of                                                                 
  households)**                                                                  

                                                                                 

                                                                                 

                            **Gyumri**   **Spitak**   **Vanadzor**   **Total**   

                                                                                 

  **Status**                                                                     

  rich                      0.8          0            0              0.4         

  upper middle                           0.4          1.8            2.7         1.2

  middle                    12.5         21.9         19.8           16.4        

  lower middle                           30.7         28.9           31.5        30.5

  poor                      55.7         47.4         45.9           51.5        

                                                                                 

                                                                                 

  Source: October                                                                
  1998 Domic                                                                     
  Household                                                                      
  Survey                                                                         
  conducted by                                                                   
  the Urban                                                                      
  Institute                                                                      

  and the Center                                                                 
  for Policy                                                                     
  Analysis.                                                                      
  --------------- --------- ------------ ------------ -------------- ----------- ---------

  ------------------------------------ ------ ------------ ------------ -------------- -----------
  **Table 2.9**                                                                        

  **Waiting List Status and                                                            
  Categories: 1998 (percentage of                                                      
  households)**                                                                        

                                                                                       

                                                                                       

                                              **Gyumri**   **Spitak**   **Vanadzor**   **Total**

                                                                                       

  **Has at least one household                                                         
  member**                                                                             

  **on the waiting list (only includes        47           44           27             42
  those who**                                                                          

  **definitely know if someone is on                                                   
  or off the list)**                                                                   

                                                                                       

  **Does not know if anyone is on the         2            1            1              1
  list**                                                                               

                                                                                       

  **Category (for those on waiting                                                     
  list)**                                                                              

  1                                           0.8          4.3          3.6            2.0

  2                                           0.0          4.3          17.9           3.5

  3                                           1.6          2.1          3.6            2.0

  4                                           0.0          0.0          3.6            0.5

  5                                           0.0          0.0          0.0            0.0

  6                                           0.0          2.1          0.0            0.5

  7                                           32.3         6.4          0.0            21.8

  8                                           6.3          0.0          0.0            4.0

  9                                           0.8          0.0          0.0            0.5

  10                                          0.0          0.0          0.0            0.0

  11                                          4.7          2.1          0.0            3.5

  12                                          0.0          0.0          0.0            0.0

  13                                          3.9          2.1          0.0            3.0

  14                                          0.0          0.0          0.0            0.0

  15                                          3.1          0.0          0.0            2.0

  16                                          0.0          2.1          0.0            0.5

  17                                          0.0          0.0          0.0            0.0

  18                                          0.0          0.0          0.0            0.0

  19                                          0.0          0.0          0.0            0.0

  20                                          0.8          0.0          0.0            0.5

  21                                          1.6          0.0          0.0            1.0

  22                                          0.8          0.0          0.0            0.5

  23                                          0.8          0.0          0.0            0.5

  24                                          0.0          0.0          0.0            0.0

  25                                          0.0          0.0          0.0            0.0

  26                                          0.8          0.0          0.0            0.5

  27                                          1.6          0.0          0.0            1.0

  28                                          0.0          0.0          0.0            0.0

  29                                          3.9          0.0          0.0            2.5

  30                                          0.0          0.0          0.0            0.0

  does not know category                      36.2         74.5         71.4           50.0

  total                                       100.0        100.0        100.0          100.0

  Source: October 1998 Domic Household                                                 
  Survey conducted by the Urban                                                        
  Institute                                                                            

  and the Center for Policy Analysis.                                                  
  ------------------------------------ ------ ------------ ------------ -------------- -----------

  ---------------------------------- ------- ------------ ------------ -------------- -----------
  **Table 2.10**                                                                      

  **Attitudes About Government                                                        
  Assistance: 1998 (percentage of                                                     
  households)**                                                                       

                                                                                      

                                                                                      

                                             **Gyumri**   **Spitak**   **Vanadzor**   **Total**

                                                                                      

  **Believe the State will be able                                                    
  to provide free**                                                                   

  **housing in the next ten years**                                                   

  yes                                        19           33           29             24

  no                                         57           46           68             57

  don\'t know                                24           21           3              19

                                                                                      

  **Believe the State should help                                                     
  with home purchase**                                                                

  yes                                        92           81           92             89

  no                                         5            12           7              7

  don\'t know                                3            6            1              3

                                                                                      

  **Percentage of the cost the State                                                  
  should cover**                                                                      

  (only includes those responding                                                     
  \"yes\" to previous item)                                                           

  21-30                                      1            1            4              2

  31-40                                      0            0            0              0

  41-50                                      15           25           18             18

  51-60                                      2            3            1              2

  61-70                                      4            5            8              5

  71-80                                      17           8            22             16

  81-90                                      5            6            6              5

  91-100                                     57           52           42             52

                                                                                      

                                                                                      

  Source: October 1998 Domic                                                          
  Household Survey conducted by the                                                   
  Urban Institute and the Center for                                                  
  Policy Analysis.                                                                    
  ---------------------------------- ------- ------------ ------------ -------------- -----------

  -------------------------------------------------- --------- --------------
  **Table 2.11**                                               

  **Resources Required to Move: 1998 (percentage of            
  households)**                                                

                                                               

                                                               **Three
                                                               Cities**

                                                               **Combined**

                                                               

  **Amount of money needed to move to permanent                
  housing**                                                    

  **without the assistance of the government**                 

  less than 1000                                               6

  1001-2000                                                    5

  2001-3000                                                    11

  3001-4000                                                    10

  4001-5000                                                    16

  5001-6000                                                    10

  6001-7000                                                    5

  7001-8000                                                    8

  8001-9000                                                    2

  9001-10000                                                   17

  10001-15000                                                  5

  more than 15000                                              6

                                                               

  **Mean**                                                     

  Total                                              7256      

  Gyumri                                             7313      

  Spitak                                             9654      

  Vanadzor                                           5399      

                                                               

  **Size of government payment to get household to             
  move to a permanent unit and move off waiting                
  list**                                                       

  less than 1000                                               6

  1001-2000                                                    6

  2001-3000                                                    12

  3001-4000                                                    10

  4001-5000                                                    16

  5001-6000                                                    8

  6001-7000                                                    5

  7001-8000                                                    6

  8001-9000                                                    1

  9001-10000                                                   15

  10001-15000                                                  8

  more than 15000                                              7

                                                               

                                                               

  Source: October 1998 Domic Household Survey                  
  conducted by the Urban Institute                             

  and the Center for Policy Analysis.                          
  -------------------------------------------------- --------- --------------

  ---------------- ------ ------ ------ -------- ------ ------- ------ -------------- ------ ------
  **Table 2.12**                                                                             

  **Resources                                                                                
  Required to Move                                                                           
  When Facing Time                                                                           
  and Contribution                                                                           
  Constraints:                                                                               
  1998 (percentage                                                                           
  of households)**                                                                           

                                                                                             

                                                                       **Three               
                                                                       Cities**              

                                                                       **Combined**          

                                                                                             

  **Would move to                                                                            
  new or existing                                                                            
  housing during                                                                             
  the upcoming                                                                               
  year**                                                                                     

  **if the                                                                                   
  government                                                                                 
  offered to                                                                                 
  pay:**                                                                                     

                                                        one                                  26
                                                        third                                
                                                        of the                               
                                                        price                                

                                        half of                        12                    
                                        the                                                  
                                        price                                                

                                        two                                           21     
                                        thirds                                               
                                        of the                                               
                                        price                                                

                                                                                             

                                                                                             

  **Would move                                                                               
  with State                                                                                 
  assistance if                                                                              
  had two years to                                                                           
  save                                                                                       
  contribution**                                                                             

                                                                                             

  **Will not                                                                                 
  accept any of                                                                              
  these offers**                                                                             

                                                                                             

                                                                                             

  Source: October                                                                            
  1998 Domic                                                                                 
  Household Survey                                                                           
  conducted by the                                                                           
  Urban Institute                                                                            

  and the Center                                                                             
  for Policy                                                                                 
  Analysis.                                                                                  
  ---------------- ------ ------ ------ -------- ------ ------- ------ -------------- ------ ------

  ----------------- ------ ------- ------- ------- ------- ---------- ------- -------
  **Table 2.13**                                                              

  **Acceptability                                                             
  of Alternative                                                              
  Assistance                                                                  
  Approaches: 1998                                                            
  (percentage of                                                              
  households)**                                                               

                                                                              

                                                           Three              
                                                           Cities             

                                                           Combined           

  **Rental                                                                    
  allowance                                                                   
  program**                                                                   

  very acceptable                                          2                  

  acceptable                                               18                 

  barely acceptable                                                   23      

  not acceptable                                                      53      

  do not know                                                         4       

                                                                              

  **Move domic to                                                             
  new site with                                                               
  improved                                                                    
  services**                                                                  

  very acceptable                                          5                  

  acceptable                                               12                 

  barely acceptable                                                   5       

  not acceptable                                                      78      

  do not know                                                         \*      

                                                                              

  **Subsidize                                                                 
  up-front costs on                                                           
  market rate                                                                 
  loan**                                                                      

  very acceptable                                          3                  

  acceptable                                               29                 

  barely acceptable                                                   17      

  not acceptable                                                      48      

  do not know                                                         3       

                                                                              

  **Upgrade                                                                   
  existing domic**                                                            

  very acceptable                                          4                  

  acceptable                                               23                 

  barely acceptable                                                   15      

  not acceptable                                                      58      

  do not know                                                         1       

                                                                              

                                                                              

  \* less than one                                                            

                                                                              

  Source: October                                                             
  1998 Domic                                                                  
  Household Survey                                                            
  conducted by the                                                            
  Urban Institute                                                             

  and the Center                                                              
  for Policy                                                                  
  Analysis.                                                                   
  ----------------- ------ ------- ------- ------- ------- ---------- ------- -------

  -------------------------------- ------- ------------ ------------ -------------- -----------
  **Table 2.14**                                                                    

  **Desired Characteristics of                                                      
  Next Home: 1998 (percentage of                                                    
  households)**                                                                     

                                                                                    

                                           **Gyumri**   **Spitak**   **Vanadzor**   **Total**

                                                                                    

  **First most important feature**                                                  

  access to work                           14           10           7              12

  close to schools                         20           28           14             20

  close to                                 10           9            7              9
  shopping/services/health                                                          
  facilities                                                                        

  close to friends and relatives           2            6            1              3

  availability of public                   10           5            9              9
  transportation                                                                    

  availability of basic services                        32           24             41
  (water, electricity, sanitation)                                                  

  more space                               8            11           17             11

  other                                    5            7            5              6

                                                                                    

  **Second most important                                                           
  feature**                                                                         

  access to work                           7            15           7              9

  close to schools                         18           19           12             17

  close to                                 17           23           16             18
  shopping/services/health                                                          
  facilities                                                                        

  close to friends and relatives           6            4            7              6

  availability of public                   21           6            22             18
  transportation                                                                    

  availability of basic services                        19           28             18
  (water, electricity, sanitation)                                                  

  more space                               10           3            17             10

  other                                    2            2            1              2

                                                                                    

  **Third most important feature**                                                  

  access to work                           11           10           6              10

  close to schools                         10           10           15             11

  close to                                 16           26           20             19
  shopping/services/health                                                          
  facilities                                                                        

  close to friends and relatives           12           9            6              10

  availability of public                   24           20           21             22
  transportation                                                                    

  availability of basic services                        18           13             18
  (water, electricity, sanitation)                                                  

  more space                               7            9            7              8

  other                                    3            2            6              3

                                                                                    

  **Preferred location**                                                            

  same neighborhood                        58           57           63             59

  different neighborhood, same             39           37           33             37
  city                                                                              

  different city                           3            6            4              4

                                                                                    

  **Would be willing to move to an                                                  
  older, existing unit**                                                            

  **if provided by the                     73           56           87             72
  government**                                                                      

                                                                                    

                                                                                    

  Source: October 1998 Domic                                                        
  Household Survey conducted by                                                     
  the Urban Institute                                                               

  and the Center for Policy                                                         
  Analysis. All amounts are in US                                                   
  dollars.                                                                          
  -------------------------------- ------- ------------ ------------ -------------- -----------

**2.2. CHARACTERISTICS OF BENEFICIARIES OF THE EQZ HOUSING PROJECTS**

# with Beneficiary Population Survey Tables

The Urban Institute (UI) and the Center for Policy Analysis at the
American University of Armenia (CPA) surveyed 238 households in the
earthquake zone (EQZ) during October 1998, to gain a better
understanding of who is benefiting from government housing programs in
the cities of Gyumri, Spitak, and Vanadzor. The survey identifies key
characteristics of beneficiaries including their family structure, where
they came from, and their degree of need. Most of the questions used in
the survey were drawn from a similar 300 household survey conducted in
the same cities by the World Bank in 1997.[^6] The UI/CPA sample,
however, includes beneficiaries from all types of government programs,
whereas the earlier study focused only on World Bank reconstruction
program beneficiaries.[^7]

**Acquisition of Units by Beneficiaries**

-   Nearly 90 percent of the beneficiary households in the three cities
    are the original occupants of the unit (see Table 2.15). In other
    words, households that are [not]{.underline} the original
    beneficiaries now occupy about 10 percent of the units.

-   Of the 10 percent who are not original occupants, most (about 54
    percent) bought the unit from a private owner. Almost 12 percent are
    renting and about 8 percent occupy their units rent-free. However,
    over a fourth of the non-original occupant households acquired their
    unit through some other means. Some of these households may have
    inherited their unit or were given the unit by a relative or friend.

-   There was an overall tendency for households to either move into
    their allocated unit quickly or have to wait a considerable time
    before moving into their new unit. Overall, about 30 percent of all
    beneficiary households moved into their units within a month or less
    of the time the government allocated them a unit. However, about 42
    percent had to wait 12 or more months, and almost a fifth had to
    wait over two years. The average waiting time was about 7 months.

-   One reason for the lag between the allocation date and the move-in
    date is the need for remodeling a unit. Although not shown in Tables
    2.15 or 2.16, there is a fairly strong correlation between the
    waiting period variable and the variable identifying whether
    remodeling costs were required before moving into the unit.
    Three-fourths of those who waited from 12 to 24 months, and
    two-thirds of those who waited over two years, reported that they
    needed to spend money on remodeling. On the other hand, over half
    (about 55 percent) of all households that moved in within the first
    month also had to spend money to remodel before moving into their
    units. In addition, the expected correlation between the waiting
    period and the amount of money spent on remodeling is weaker than
    anticipated. It appears then, that long delays with regard to moving
    into an allocated unit cannot only be explained by the need to
    remodel. The overall pattern described here may simply reflect that
    there are structural or infrastructure service problems that are
    beyond the ability of households to resolve with their own
    resources.

**Acquisition Costs and Current Market Value**

-   Overall, about three-fourths of the households occupying allocated
    units received their units for free (see Table 2.16). The population
    in this case comprises original occupants and non-original occupants
    who bought their residences from private individuals.

-   Of those who paid more than zero dollars, two-thirds thought the
    price they paid was fair. From the top panel of Table 2, one can
    conclude that about two-thirds of those who paid more than zero
    dollars paid \$500 or less.

-   Almost two-thirds of all households spent money remodeling before
    moving into their units. In Spitak, however, about three-fifths of
    the beneficiaries did not have to make any remodeling expenditures.
    (Note that Spitak beneficiaries also were somewhat less likely than
    households in Gyumri and Vanadzor to have waited twelve months or
    more before moving into their units\--see Table 1.) Almost 40
    percent of the households paid \$250 or less, and about two-thirds
    spent \$500 or less. Almost a fourth, however had to pay over a
    thousand dollars. The median amount paid for remodeling was \$410
    and the mean was \$908.

-   It is interesting that a large share of the beneficiary households
    did not object to having to spend money on remodeling. About half
    thought remodeling costs were fair or very fair. In addition, about
    28 percent did not prefer a finished unit over an unfinished unit
    (assuming the finished unit does not cost less than the total amount
    spent on buying and improving an unfinished unit).

-   The estimated median market value of \$4,500 and mean market value
    of \$5,546 are close to the median value of \$5,000 that was
    reported for the earlier World Bank beneficiary survey (p.33,
    footnote 26).

**Household Characteristics**

-   Overall, the beneficiary population resembles the domic population
    with regard to some key demographic variables. The average household
    size is 4.5 persons, the average age of the head of household is
    about 45 years, and the share of households where a female is the
    "main breadwinner" is around 32 percent (compared to 4.4 persons, 47
    years, and 30 percent, respectively, in the domic survey). The
    beneficiary data refer to the "main breadwinner", as similarly
    defined in the domic survey (as opposed to the "head of household",
    which may suggest other status and responsibilities). The team
    adopted this terminology in the English translation of the
    questionnaire to maintain comparability with the earlier World Bank
    beneficiary study. It is not clear to what degree this difference in
    definitions affects results. It does, however, have an effect\--for
    example, a very small percentage of households reported "there is no
    main breadwinner."

-   Spitak beneficiaries appear to have some unusual characteristics.
    Compared to the other cities, Spitak has smaller households (3.5
    persons) with fewer adults (2.1 versus 2.7 overall). It has more
    unconventional households in that about half have a female as the
    primary breadwinner and about a fifth describe themselves as
    something other than a couple (with or without children), a single
    parent family, or an extended family.

**Migration and Characteristics of Previous Unit**

-   About 94 percent of beneficiary households previously lived in the
    same city; of these, about 89 percent (83.1/93.6) lived in a
    different neighborhood.

-   Figures on move-in dates clearly reflect the difficulties the
    government has experienced in trying to respond to the crisis\--over
    half (about 55 percent) of the beneficiary households have moved in
    since the beginning of 1995. In each city, about 20 percent of all
    beneficiary households moved in during 1992; however, the subsequent
    pattern of when people moved into their units is different for each
    city. In Vanadzor, roughly similar amounts of households moved in
    during each of the next three years, with move-ins tapering off
    after then. In Spitak and Gyumri, there was a sharp decline in
    move-ins during the years immediately following 1992. Move-ins
    started to pick up in Gyumri in 1995 and in Spitak during 1996.
    About 37 percent of the households in Gyumri and 42 percent of the
    households in Spitak moved in since the start of 1997. Overall,
    about one-third of all beneficiary households moved in since the
    start of 1997. The recent surge in occupancy is consistent with the
    surge in EQZ housing construction production that occurred in 1997
    (see informal sector note, p. 28, Table 8).

-   Almost three-fourths of all beneficiary households owned their
    previous unit. For Gyumri and Spitak, the tenure figures in Table
    2.18 bear some resemblance to the corresponding tenure figures
    presented in Table 1 for the domic survey. This is not surprising
    given that about 69 percent of previous units in Gyumri and 82
    percent of previous units in Spitak were domics. In Vanadzor, only
    about 26 percent of domic survey households stated they were owners;
    in the beneficiary survey, about 80 percent of Vanadzor households
    said they owned their previous unit (even though about 71 percent
    previously lived in domics).

-   Table 2.18 shows how over one-fourth of the units overall are
    occupied by households who previously lived in something other than
    a domic. About 11 percent lived in apartments and another 7 percent
    lived in single-family homes. In Spitak, however, about 94 percent
    of households previously lived in either a domic or dormitory.

-   Overcrowding (with regard to the number of people living in a unit)
    is not reduced much as households move into new units. About 30
    percent of households say they shared their previous home, and the
    average household size for these households was about 8 persons.
    However, as these households moved into their new unit, about 11
    percent continued to share their unit with all of the same members,
    and about 35 percent still shared their units with at least some of
    the additional members. Because most households previously lived in
    domics, the scope for reducing overcrowding was limited (i.e., no
    one is supposed to stay in the domic left behind). This is
    consistent with the fact that the average household size in the
    beneficiary survey is about the same as that in the domic survey.

-   The Table 2.18 figures on what happened to domics reveal a lack of a
    clear policy and/or enforcement on the part of government with
    respect to the disposal of domics. Overall, only 26 percent of the
    households formerly residing in domics returned their domic to the
    state. About 9 percent have kept their domics and have family
    members living in them. About 20 percent have sold or given away
    their domics. A rather large number of households (about 25 percent)
    did not state what happened to their domic. The informal sector note
    (page 35, item2.29) reported findings from the earlier World Bank
    beneficiary survey that showed 44 percent of those who previously
    lived in domics did not give them up. The breakdown of the 44
    percent is as follows: 12 percent are used for storage; 2 percent
    are used as workshops; 15 percent are still occupied by someone; and
    15 percent are held, but not used.

**Economic Characteristics of Households**

-   The median monthly household income is about \$14 and the mean is
    about \$24. In comparison, the earlier World Bank survey estimated a
    median income of \$21 and a mean of about \$16. \[NOTE: Based on the
    quintile figures shown in Table 12 of the informal sector report,
    the weighted average mean income was estimated to be about \$34
    instead of \$16. The larger figure makes more sense.\]

-   The importance of the state sector as an employer is highlighted in
    Table 2.20. About 40 percent of main breadwinners are described as
    state enterprise workers or public sector workers. About 7 percent
    of households have two or more members working in the state sector.
    Nevertheless, this is a "half cup full, half cup empty" situation,
    since, overall, about 40 percent of main breadwinners are private
    sector employees, self-employed, or the owners of small businesses.
    In Gyumri, unemployment among main breadwinners is relatively high
    at about 17 percent.

-   The perceived financial status of beneficiary survey households is
    quite similar to that reported for households in the domic survey.
    Roughly 80 percent see themselves as lower-middle income or poor.

-   Beneficiary households tend to have fewer physical assets than
    households do in the domic survey. However, the pattern for owning
    land is quite similar: a fairly large percentage of households in
    Spitak (36 percent) own land, but no one reported owning any in
    Gyumri. In the domic survey, about 68 percent of the households in
    Spitak owned land, while less than 3 percent of the households in
    Gyumri did so.

**Satisfaction with New Unit and Building Occupancy Rate**

-   Overall, most households find their units acceptable, and about 21
    percent are completely satisfied (see Table 2.19).

-   Building occupancy rates vary a lot from city to city. In Gyumri
    about 47 percent of the households live in buildings that are over
    80 percent occupied. However, the corresponding figures for Spitak
    and Vanadzor are just 13 percent and 20 percent, respectively.
    Overall, about 39 percent of households live in buildings with
    occupancy rates of 60 percent or less.

-   Table 2.19 shows the relationship between unit satisfaction and
    building occupancy rate in Table 2.19 (beneficiary survey). It shows
    that households are more likely to be completely satisfied in
    relatively full buildings. This finding must be interpreted very
    cautiously and care must be taken in drawing conclusions about cause
    and effect. It is not clear what other variables are correlated with
    occupancy rate. It may be a proxy for the share of the building that
    is completed. That would offer a clean interpretation: people are
    more likely to be satisfied in a complete building with service
    connections, etc. But the story can be much more complicated than
    that. A household can live in a fully occupied, rotten structure
    with poor services, but still be happy because of a superior
    location with respect to jobs, family, schools, shopping, etc.
    Therefore, it cannot be argued that if we just finish all of these
    buildings, people will be happy. Perhaps the more important question
    is why are there so many partially occupied structures?

**Waiting List Status**

-   It appears that the waiting list may not be the only route to
    obtaining a new unit. About 80 percent of all households had a
    member who was on the waiting list prior to receiving a unit. Since
    only about 10 percent of the respondents are not original occupants,
    this suggests that as much as 10 percent of the households occupying
    beneficiary units are original occupants that were not on the
    waiting list. Even stranger, only 80 percent of those who said they
    had a household member on the waiting list, attributed their
    acquisition of a unit to the waiting list.

-   Like in the domic survey, many households do not know their waiting
    list category‑‑ about 58 percent (even though they got housing in
    this case). About 9 out of 10 beneficiary households in Spitak and
    Vanadzor do not know. In Gyumri, things are better in that only 30
    percent do not know. It is unclear what this means. It may just mean
    it has been a while since households obtained their units and they
    forgot (but in Gyumri, a lot of people knew). For the people in the
    domic survey, it was suggested that not knowing your relative
    position may act as a disincentive for some households to take
    action on their own behalf. If a household really does not think it
    is going to get something, it might do something on its own.

-   In the domic survey, the people who DO know their category tend to
    be in the lower number categories. Given that a low number generally
    means a higher priority, then it may be the case that high priority
    people are more aware of their situation. Because a low number
    identifies a high priority case, we should only expect to see low
    numbers in the beneficiary survey\--this is pretty much true. It
    would probably be a safe guess that most of the "do not know"
    responses in the beneficiary survey came from low number households.
    The argument that the "do not know" people in the domic survey may
    be lulled into inaction still holds.

**Expenditure Distributions**

Tables 2.22, 2.23 and 2.24 show expenditure distributions for three
possible beneficiary populations: (1) all domic residents (see Table 2.5
from the Domic Survey); (2) those who lost their homes due to the
earthquake (Table 2.23); and (3) households with a member on the waiting
list (Table 2.24). Note that the tables refer to total expenditures
without heat. The main story is that households not on the waiting list
have somewhat higher total expenditures (i.e., waiting list households
are poorer on average). The total

expenditures of households who lost their homes due to the earthquake
are basically the same as that of all domic households overall (Table
2.5). This is because most households in domics are earthquake victims.

Table 2.22 contains very useful information about housing expenditure
burden. Basically, it illustrates the sharp impact of heating costs on
housing

expenditure burden. However, it also shows that during non-winter
months, the burden is not very high for many households. About 46
percent have a burden of ten percent or less. About 61 percent have a
burden of 15 percent or less. About 8 percent, however, have extremely
high burdens of over 50 percent\--most likely due to very low incomes.

  ------------------------ --------- ------------ ------------ -------------- -----------
  **Table 2.15**                                                              

  **Acquisition of Unit by                                                    
  Beneficiaries: 1998                                                         
  (percentage of                                                              
  households)**                                                               

                                                                              

                                                  **City**                    

                                     **Gyumri**   **Spitak**   **Vanadzor**   **Total**

                                                                              

  **Original Occupant of             87.5         98.0         86.4           89.5
  Unit**                                                                      

                                                                              

  **Acquisition Method**                                                      

  (non-original occupants                                                     
  only)                                                                       

                                                                              

  renting                            na           na           na             11.5

  bought from private                na           na           na             53.8
  owner                                                                       

  occupying unit free of             na           na           na             7.7
  charge                                                                      

  other                              na           na           na             26.9

                                                                              

  **Time between unit                                                         
  allocation**                                                                

  **and moving in                                                             
  (months)**                                                                  

                                                                              

  less than one month                19.0         30.0         10.7           19.4

  1                                  15.5         6.0          5.4            10.8

  2                                  5.2          2.0          7.1            5.0

  3                                  4.3          0.0          5.4            3.6

  4                                  2.6          0.0          5.4            2.7

  5                                  2.6          2.0          5.4            3.2

  6                                  2.6          4.0          3.6            3.2

  7                                  0.0          4.0          3.6            1.8

  8                                  1.7          4.0          3.6            2.7

  9                                  0.0          0.0          0.0            0.0

  10                                 1.7          20.0         0.0            5.4

  11                                 0.0          0.0          1.8            0.5

  12                                 14.7         8.0          16.1           13.5

  13-24                              11.2         6.0          10.7           9.9

  25 or more                         19.0         14.0         21.4           18.5

  mean                               7.0          6.7          8.1            7.2

                                                                              

                                                                              

                                                                              

  Source: October 1998                                                        
  Beneficiary Household                                                       
  Survey conducted by the                                                     
  Urban Institute                                                             

  and the Center for                                                          
  Policy Analysis.                                                            
  ------------------------ --------- ------------ ------------ -------------- -----------

  -------------------------------------- -- ------------ ------------ -------------- -----------
  **Table 2.16**                                                                     

  **Price Paid for Unit, Remodeling                                                  
  Costs, and Market Value: 1998                                                      
  (percentage of households)**                                                       

                                                         **City**                    

                                            **Gyumri**   **Spitak**   **Vanadzor**   **Total**

  **Amount (\$)**                                                                    

  0                                         78.6         70.8         74.5           75.7

  1-100                                     9.7          10.4         7.8            9.4

  101-500                                   4.9          14.6         3.9            6.9

  501-1500                                  1.9          2.1          3.9            2.5

  1501-3000                                 1.9          2.1          3.9            2.5

  over 3000                                 2.9          0.0          5.9            3.0

  mean                                                                               

  **Fairness of Price**                                                              

  (only includes those who paid more                                                 
  than \$0)                                                                          

  very fair                                 na           na           na             6.3

  fair                                      na           na           na             60.4

  unfair                                    na           na           na             27.1

  very unfair                               na           na           na             6.3

  **Remodeling Costs Required Before                                                 
  Moving In**                                                                        

  yes                                       76.7         39.1         58.9           64.2

  no                                        23.3         60.9         41.1           35.8

  **Fairness of Remodeling Costs**                                                   

  (only includes those who answered yes                                              
  above)                                                                             

  very fair                                 na           na           na             3.5

  fair                                      na           na           na             46.1

  unfair                                    na           na           na             36.2

  very unfair                               na           na           na             14.2

  **Remodeling Costs (\$)**                                                          

  less than 50                              na           na           na             7.8

  51-100                                    na           na           na             11.8

  101-250                                   na           na           na             19.6

  251-500                                   na           na           na             23.5

  501-1000                                  na           na           na             13.7

  1001-2000                                 na           na           na             14.7

  over 2000                                 na           na           na             8.8

  mean                                      na           na           na             908

  median                                    na           na           na             410

  **Prefer a Finished Unit** (even if it                                             
  does not cost less than                                                            

  the total amount spent on buying and                                               
  improving the unit)                                                                

  yes                                       72.1         64.9         75.5           71.6

  no                                        27.9         35.1         24.5           28.4

  **Market Value (\$)**                                                              

  0-1500                                    2.2          15.0         5.7            4.9

  1501-3000                                 22.0         30.0         17.0           21.3

  3001-4500                                 24.2         10.0         35.8           26.2

  4501-6000                                 27.5         15.0         18.9           23.2

  6001-10000                                16.5         15.0         20.8           17.7

  over 10000                                7.7          15.0         1.9            6.7

  mean                                      5703         6115         5060           5546

  median                                    5000         4000         4000           4500

  Source: October 1998 Beneficiary                                                   
  Household Survey conducted by the                                                  
  Urban Institute                                                                    

  and the Center for Policy Analysis.                                                
  -------------------------------------- -- ------------ ------------ -------------- -----------

  --------------------------- -------- ------------ ------------ -------------- -----------
  **Table 2.17**                                                                

  **Household                                                                   
  Characteristics: 1998                                                         
  (percentage of                                                                
  households)**                                                                 

                                                                                

                                                    **City**                    

                                       **Gyumri**   **Spitak**   **Vanadzor**   **Total**

                                                                                

  **Household Size**                                                            

  1                                    3.1          12.0         1.7            4.6

  2                                    10.9         20.0         1.7            10.5

  3                                    12.5         20.0         10.2           13.5

  4                                    18.8         18.0         33.9           22.4

  5                                    26.6         18.0         22.0           23.6

  6                                    14.8         6.0          22.0           14.8

  7                                    8.6          6.0          3.4            6.8

  8 or more                            4.7          0.0          5.1            3.8

  mean                                 4.6          3.5          4.9            4.5

                                                                                

  **Number of Adults**                                                          

  1                                    12.5         22.0         5.1            12.7

  2                                    39.8         54.0         32.2           40.9

  3                                    19.5         18.0         20.3           19.4

  4                                    21.1         4.0          39.0           21.9

  5 or more                            7.0          2.0          3.4            5.1

  mean                                 2.7          2.1          3.0            2.7

                                                                                

  **Household Composition**                                                     

  couple without children              6.3          8.0          1.7            5.5

  couple with children                 46.1         44.0         59.3           48.9

  single parent family                 14.1         16.0         3.4            11.8

  extended family                      29.7         12.0         33.9           27.0

  other                                3.9          20.0         1.7            6.8

                                                                                

  **Age of \"Main                                                               
  Breadwinner\"**                                                               

  less than 20                         0.9          0            0              0.5

  20-29                                6.8          4.7          5.5            6

  30-39                                29.9         23.3         21.8           26.5

  40-49                                29.9         48.8         40             36.3

  50-59                                15.4         7            10.9           12.6

  60 or more                           17.1         16.3         21.8           18.1

  mean                                 45.4         45.1         45.8           45.4

                                                                                

  **Sex of \"Main                                                               
  Breadwinner\"**                                                               

  female                               32.5         51.1         14.5           31.8

  male                                 67.5         48.9         85.5           68.2

                                                                                

                                                                                

  Source: October 1998                                                          
  Beneficiary Household                                                         
  Survey conducted by the                                                       
  Urban Institute                                                               

  and the Center for Policy                                                     
  Analysis.                                                                     

                                                                                
  --------------------------- -------- ------------ ------------ -------------- -----------

+---------------------------+---+---------+---------+---------+---------+
| # **Table 2.18**          |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| **Migration and           |   |         |         |         |         |
| Characteristics of        |   |         |         |         |         |
| Previous Unit: 1998       |   |         |         |         |         |
| (percentage of            |   |         |         |         |         |
| households)**             |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
|                           |   |         | *       |         |         |
|                           |   |         | *City** |         |         |
+---------------------------+---+---------+---------+---------+---------+
|                           |   | **G     | **S     | **Van   | **      |
|                           |   | yumri** | pitak** | adzor** | Total** |
+---------------------------+---+---------+---------+---------+---------+
| **Location of Previous    |   |         |         |         |         |
| Residence**               |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| same neighborhood         |   | 11.7    | 8.0     | 10.2    | 10.5    |
+---------------------------+---+---------+---------+---------+---------+
| different neighborhood,   |   | 81.3    | 84.0    | 86.4    | 83.1    |
| same city                 |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| other city                |   | 7.0     | 8.0     | 3.4     | 6.3     |
+---------------------------+---+---------+---------+---------+---------+
| **Year Moved In**         |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| 91                        |   | 4.9     | 8.0     | 1.7     | 4.8     |
+---------------------------+---+---------+---------+---------+---------+
| 92                        |   | 18.9    | 22.0    | 18.9    | 19.5    |
+---------------------------+---+---------+---------+---------+---------+
| 93                        |   | 9.0     | 6.0     | 18.9    | 10.8    |
+---------------------------+---+---------+---------+---------+---------+
| 94                        |   | 5.7     | 6.0     | 20.3    | 9.5     |
+---------------------------+---+---------+---------+---------+---------+
| 95                        |   | 12.3    | 4.0     | 15.3    | 11.3    |
+---------------------------+---+---------+---------+---------+---------+
| 96                        |   | 12.3    | 12.0    | 8.5     | 11.3    |
+---------------------------+---+---------+---------+---------+---------+
| 97                        |   | 23.0    | 22.0    | 11.9    | 19.9    |
+---------------------------+---+---------+---------+---------+---------+
| 98                        |   | 13.9    | 20.0    | 5.1     | 13.0    |
+---------------------------+---+---------+---------+---------+---------+
| **Previous Tenure**       |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| owner                     |   | 75.0    | 62.0    | 79.7    | 73.4    |
+---------------------------+---+---------+---------+---------+---------+
| renter                    |   | 7.8     | 12.0    | 15.3    | 10.5    |
+---------------------------+---+---------+---------+---------+---------+
| occupied unit rent-free   |   | 17.2    | 26.0    | 5.1     | 16.0    |
+---------------------------+---+---------+---------+---------+---------+
| **Shared Previous Home**  |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| yes                       |   | 28.9    | 38.0    | 27.1    | 30.4    |
+---------------------------+---+---------+---------+---------+---------+
| no                        |   | 71.1    | 62.0    | 72.9    | 69.6    |
+---------------------------+---+---------+---------+---------+---------+
| **Number of People in     |   |         |         |         |         |
| Shared Unit**             |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| (only includes those who  |   |         |         |         |         |
| shared previous unit)     |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| 1 to 2                    |   | 0.0     | 5.3     | 6.3     | 2.8     |
+---------------------------+---+---------+---------+---------+---------+
| 3 to 4                    |   | 16.2    | 15.8    | 12.5    | 15.3    |
+---------------------------+---+---------+---------+---------+---------+
| 5 to 6                    |   | 21.6    | 42.1    | 25.0    | 27.8    |
+---------------------------+---+---------+---------+---------+---------+
| 7 to 8                    |   | 24.3    | 10.5    | 18.8    | 19.4    |
+---------------------------+---+---------+---------+---------+---------+
| 9 to 10                   |   | 16.2    | 10.5    | 18.8    | 15.3    |
+---------------------------+---+---------+---------+---------+---------+
| 11 to 12                  |   | 8.1     | 5.3     | 12.5    | 8.3     |
+---------------------------+---+---------+---------+---------+---------+
| 13+                       |   | 13.5    | 10.5    | 6.3     | 11.1    |
+---------------------------+---+---------+---------+---------+---------+
| mean                      |   | 8.9     | 8.2     | 7.1     | 8.3     |
+---------------------------+---+---------+---------+---------+---------+
| **Sharing with Same       |   |         |         |         |         |
| People Today**            |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| (only includes those who  |   |         |         |         |         |
| shared previous unit)     |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| yes, all of them          |   | 13.5    | 10.5    | 6.3     | 11.1    |
+---------------------------+---+---------+---------+---------+---------+
| yes, some of them         |   | 29.7    | 47.4    | 31.3    | 34.7    |
+---------------------------+---+---------+---------+---------+---------+
| no                        |   | 56.8    | 42.1    | 62.5    | 54.2    |
+---------------------------+---+---------+---------+---------+---------+
| **Previous Structure      |   |         |         |         |         |
| Type**                    |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| domic                     |   | 68.8    | 82.0    | 71.2    | 72.2    |
+---------------------------+---+---------+---------+---------+---------+
| apartment                 |   | 12.5    | 4.0     | 15.3    | 11.4    |
+---------------------------+---+---------+---------+---------+---------+
| single-family             |   | 7.8     | 0.0     | 11.9    | 7.2     |
+---------------------------+---+---------+---------+---------+---------+
| dormitory                 |   | 3.1     | 12.0    | 0.0     | 4.2     |
+---------------------------+---+---------+---------+---------+---------+
| other                     |   | 7.8     | 2.0     | 1.7     | 5.1     |
+---------------------------+---+---------+---------+---------+---------+
| **What Happened to        |   |         |         |         |         |
| Domic**                   |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| returned to State         |   | 31.9    | 20.0    | 19.0    | 26.0    |
+---------------------------+---+---------+---------+---------+---------+
| sold it                   |   | 6.6     | 7.5     | 14.3    | 8.7     |
+---------------------------+---+---------+---------+---------+---------+
| gave to friend/relative   |   | 9.9     | 12.5    | 14.3    | 11.6    |
+---------------------------+---+---------+---------+---------+---------+
| use for storage           |   | 2.2     | 17.5    | 7.1     | 6.9     |
+---------------------------+---+---------+---------+---------+---------+
| use for workplace/other   |   | 3.3     | 7.5     | 9.5     | 5.8     |
| purpose                   |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| kept it and family        |   | 6.6     | 12.5    | 9.5     | 8.7     |
| members live there        |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| kept it but do not use it |   | 6.6     | 5.0     | 11.9    | 7.5     |
+---------------------------+---+---------+---------+---------+---------+
| other                     |   | 33.0    | 17.5    | 14.3    | 24.9    |
+---------------------------+---+---------+---------+---------+---------+
| Source: October 1998      |   |         |         |         |         |
| Beneficiary Household     |   |         |         |         |         |
| Survey conducted by the   |   |         |         |         |         |
| Urban Institute           |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+
| and the Center for Policy |   |         |         |         |         |
| Analysis.                 |   |         |         |         |         |
+---------------------------+---+---------+---------+---------+---------+

  ------------------------------ --- ------------ ---------------- -------------- -----------
  **Table 2.19**                                                                  

  **Satisfaction with New Unit                                                    
  and Building Occupancy Rate:                                                    
  1998 (percentage of                                                             
  households)**                                                                   

                                                                                  

                                                  **City**                        

                                     **Gyumri**   **Spitak**       **Vanadzor**   **Total**

                                                                                  

  **Satisfaction Level**                                                          

  completely satisfied               22.7         22               16.9           21.1

  not completely satisfied, but                   56.3             54             74.6
  acceptable                                                                      

  completely unsatisfied             21.1         24               8.5            18.6

                                                                                  

  **Occupancy Rate of New                                                         
  Building (percent)**                                                            

  81 to 100                          46.8         12.5             20.3           37.3

  61 to 80                           17.5         0                27.1           19.7

  41 to 60                           9.5          62.5             25.4           16.6

  21 to 40                           15.9         12.5             20.3           17.1

  1 to 20                            5.6          0                6.8            5.7

  do not know                        4.8          12.5             0              3.6

                                                                                  

                                                                                  

  **Table 5b**                                                                    

  **Satisfaction with New Unit                                                    
  and Building Occupancy Rate in                                                  
  Three Cities Combined: 1998                                                     
  (percentage of households)**                                                    

                                                                                  

                                                  **Satisfaction                  
                                                  Level**                         

                                                                                  

                                                  not completely                  

                                     completely   satisfied but    completely     

                                     satisfied    acceptable       unsatisfied    

  **Occupancy Rate of New                                                         
  Building (percent)**                                                            

  81 to 100                          57.5         37.0             14.7           

  61 to 80                           15.0         21.0             20.6           

  41 to 60                           10.0         21.0             8.8            

  21 to 40                           10.0         14.3             35.3           

  1 to 20                            5.0          5.0              8.8            

  do not know                        2.5          1.7              11.8           

  total                              100.0        100.0            100.0          

                                                                                  

                                                                                  

  Source: October 1998                                                            
  Beneficiary Household Survey                                                    
  conducted by the Urban                                                          
  Institute                                                                       

  and the Center for Policy                                                       
  Analysis.                                                                       

                                                                                  
  ------------------------------ --- ------------ ---------------- -------------- -----------

+-----------------------+------------+-------+-------+-------+-------+
| **Table 2.20**        |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| **Economic            |            |       |       |       |       |
| Characteristics of    |            |       |       |       |       |
| Households: 1998      |            |       |       |       |       |
| (percentage of        |            |       |       |       |       |
| households)**         |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
|                       |            |       | **C   |       |       |
|                       |            |       | ity** |       |       |
+-----------------------+------------+-------+-------+-------+-------+
|                       |            | **Gyu | **Spi | **    | #     |
|                       |            | mri** | tak** | Vanad |  **To |
|                       |            |       |       | zor** | tal** |
+-----------------------+------------+-------+-------+-------+-------+
| **Occupation of       |            |       |       |       |       |
| \"Main                |            |       |       |       |       |
| Breadwinner\"**       |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| state enterprise      |            | 23.6  | 26.5  | 19.6  | 22.9  |
| employee              |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| private sector        |            | 7.9   | 8.8   | 23.9  | 12.4  |
| employee              |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| owner of small        |            |       | 21.3  | 14.7  | 10.9  |
| business, trade,      |            |       |       |       |       |
| workshop, etc.        |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| self-employed or      |            |       | 9.0   | 14.7  | 13.0  |
| free-lance worker     |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| public sector worker  |            | 16.9  | 14.7  | 21.7  | 17.6  |
+-----------------------+------------+-------+-------+-------+-------+
| unemployed            |            | 16.9  | 5.9   | 2.2   | 10.6  |
+-----------------------+------------+-------+-------+-------+-------+
| pensioner             |            | 0.0   | 0.0   | 0.0   | 0.0   |
+-----------------------+------------+-------+-------+-------+-------+
| other                 |            | 4.5   | 14.7  | 8.7   | 7.6   |
+-----------------------+------------+-------+-------+-------+-------+
| **Number of Workers   |            |       |       |       |       |
| by Occupation**       |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| state sector          |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| 0                     |            | 66.4  | 63.8  | 50.8  | 62.0  |
+-----------------------+------------+-------+-------+-------+-------+
| 1                     |            | 25.8  | 31.9  | 40.7  | 30.8  |
+-----------------------+------------+-------+-------+-------+-------+
| 2 or more             |            | 7.8   | 4.3   | 8.5   | 7.3   |
+-----------------------+------------+-------+-------+-------+-------+
| private sector        |            |       |       |       |       |
| business, trade,      |            |       |       |       |       |
| workshop              |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| 0                     |            | 83.6  | 85.1  | 72.9  | 81.2  |
+-----------------------+------------+-------+-------+-------+-------+
| 1                     |            | 15.6  | 14.9  | 27.1  | 18.4  |
+-----------------------+------------+-------+-------+-------+-------+
| 2 or more             |            | 0.8   | 0.0   | 0.0   | 0.4   |
+-----------------------+------------+-------+-------+-------+-------+
| self-employed or      |            |       |       |       |       |
| free-lance worker     |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| 0                     |            | 88.3  | 87.2  | 86.4  | 87.6  |
+-----------------------+------------+-------+-------+-------+-------+
| 1                     |            | 10.2  | 10.6  | 11.9  | 10.7  |
+-----------------------+------------+-------+-------+-------+-------+
| 2 or more             |            | 1.6   | 2.1   | 1.7   | 1.7   |
+-----------------------+------------+-------+-------+-------+-------+
| **Total Household     |            |       |       |       |       |
| Income**              |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| 0-5                   |            | 14.1  | 22.0  | 28.8  | 19.4  |
+-----------------------+------------+-------+-------+-------+-------+
| 6-10                  |            | 12.5  | 36.0  | 8.5   | 16.5  |
+-----------------------+------------+-------+-------+-------+-------+
| 11-15                 |            | 17.2  | 16.0  | 13.6  | 16.0  |
+-----------------------+------------+-------+-------+-------+-------+
| 16-20                 |            | 13.3  | 6.0   | 11.9  | 11.4  |
+-----------------------+------------+-------+-------+-------+-------+
| 21-25                 |            | 7.8   | 4.0   | 5.1   | 6.3   |
+-----------------------+------------+-------+-------+-------+-------+
| 26-30                 |            | 10.2  | 0.0   | 5.1   | 6.8   |
+-----------------------+------------+-------+-------+-------+-------+
| 31-40                 |            | 7.8   | 6.0   | 13.6  | 8.9   |
+-----------------------+------------+-------+-------+-------+-------+
| 41-50                 |            | 3.1   | 6.0   | 6.8   | 4.6   |
+-----------------------+------------+-------+-------+-------+-------+
| 51-100                |            | 8.6   | 0.0   | 5.1   | 5.9   |
+-----------------------+------------+-------+-------+-------+-------+
| over 100              |            | 5.5   | 4.0   | 1.7   | 4.2   |
+-----------------------+------------+-------+-------+-------+-------+
| mean                  |            | 29.6  | 12.4  | 22.6  | 24.3  |
+-----------------------+------------+-------+-------+-------+-------+
| median                |            | 17.0  | 8.5   | 15.0  | 14.0  |
+-----------------------+------------+-------+-------+-------+-------+
| **Perceived Financial |            |       |       |       |       |
| Status**              |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| rich                  |            | 0.8   | 2.0   | 0.0   | 0.8   |
+-----------------------+------------+-------+-------+-------+-------+
| upper middle          |            | 0.8   | 0.0   | 0.0   | 0.4   |
+-----------------------+------------+-------+-------+-------+-------+
| middle                |            | 18.1  | 24.0  | 22.0  | 20.3  |
+-----------------------+------------+-------+-------+-------+-------+
| lower middle          |            | 40.2  | 30.0  | 44.1  | 39.0  |
+-----------------------+------------+-------+-------+-------+-------+
| poor                  |            | 40.2  | 44.0  | 33.9  | 39.4  |
+-----------------------+------------+-------+-------+-------+-------+
| **Assets**            |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| house                 |            | 0.0   | 2.0   | 1.7   | 0.8   |
+-----------------------+------------+-------+-------+-------+-------+
| apartment             |            | 0.8   | 0.0   | 3.4   | 1.3   |
+-----------------------+------------+-------+-------+-------+-------+
| dacha                 |            | 0.0   | 0.0   | 0.0   | 0.0   |
+-----------------------+------------+-------+-------+-------+-------+
| land                  |            | 0.0   | 36.0  | 6.8   | 9.3   |
+-----------------------+------------+-------+-------+-------+-------+
| automobile            |            | 8.6   | 10.0  | 25.4  | 13.1  |
+-----------------------+------------+-------+-------+-------+-------+
| motorcycle            |            | 0.0   | 0.0   | 0.0   | 0.0   |
+-----------------------+------------+-------+-------+-------+-------+
|                       |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| Source: October 1998  |            |       |       |       |       |
| Beneficiary Household |            |       |       |       |       |
| Survey conducted by   |            |       |       |       |       |
| the Urban Institute   |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+
| and the Center for    |            |       |       |       |       |
| Policy Analysis.      |            |       |       |       |       |
+-----------------------+------------+-------+-------+-------+-------+

  ------------------------------------- -- ------------ ------------ -------------- -----------
  **Table 2.21**                                                                    

  **Waiting List Status: 1998                                                       
  (percentage of households)**                                                      

                                                        **City**                    

                                           **Gyumri**   **Spitak**   **Vanadzor**   **Total**

                                                                                    

  **Someone in household was on the                                                 
  waiting**                                                                         

  **list prior to allocation of home       81.9         81.6         75.9           80.3
  (only includes those**                                                            

  **who definitely know if someone was                                              
  on or off the list)**                                                             

                                                                                    

  **Does not know if anyone was on         0            0            1.7            0.8
  list**                                                                            

                                                                                    

  **Category (for those on waiting                                                  
  list)**                                                                           

  1                                        5.9          4.8          2.4            4.8

  2                                        3.9          2.4          2.4            3.2

  3                                        4.9          2.4          0              3.2

  6                                        2            0            2.4            1.6

  7                                        38.2         2.4          0              21.5

  8                                        3.9          0            0              2.2

  9                                        1            0            0              0.5

  11                                       2.9          0            0              1.6

  14                                       1            0            0              0.5

  18                                       1            0            0              0.5

  construction worker                      4.9          0            0              2.7

  does not know category                   30.4         88.1         92.9           57.5

  total                                    100          100          100            100

                                                                                    

  **Received unit because a household                                               
  member was**                                                                      

  **on the waiting list (only includes     78.8         84.2         79.5           80.1
  those who were**                                                                  

  **someone was on the waiting list)**                                              

                                                                                    

  Source: October 1998 Beneficiary                                                  
  Household Survey conducted by the                                                 
  Urban Institute                                                                   

  and the Center for Policy Analysis.                                               
  ------------------------------------- -- ------------ ------------ -------------- -----------

  ---------------------------------------------- ----------- --------------
  **Table 2.22**                                             

  **Housing Expenditure Burden: 1998 (percentage             
  of households)**                                           

                                                             

                                                             **Three
                                                             Cities**

                                                             **Combined**

                                                             

  **Total Housing Expenditures (with heating                 
  expenditures) as a**                                       

  **Percentage of Total Expenditures (with heat              
  expenditures)**                                            

  less than 6 percent                                        5.2

  6-10 percent                                               9.8

  11-15 percent                                              10.5

  16-20 percent                                              12.9

  21-25 percent                                              12.4

  26-30 percent                                              6.0

  31-35 percent                                              6.9

  36-40 percent                                              5.5

  41-50 percent                                              8.3

  greater than 50 percent                                    22.6

  mean                                                       32.0

                                                             

  **Total Housing Expenditures (without heating              
  expenditures) as a**                                       

  **Percentage of Total Expenditures (without                
  heat expenditures)**                                       

  less than 6 percent                                        20.4

  6-10 percent                                               25.8

  11-15 percent                                              15.0

  16-20 percent                                              12.7

  21-25 percent                                              6.6

  26-30 percent                                              2.3

  31-35 percent                                              1.4

  36-40 percent                                              4.7

  41-50 percent                                              3.1

  greater than 50 percent                                    8.0

  mean                                                       18.0

                                                             

                                                             

  Source: October 1998 Domic Household Survey                
  conducted by the Urban Institute                           

  and the Center for Policy Analysis.                        
  ---------------------------------------------- ----------- --------------

  ----------------------- --------- ------------ ------------ -------------- -----------
  **Table 2.23**                                                             

  **Total Monthly                                                            
  Expenditures without                                                       
  Heating Fuel for                                                           
  Earthquake Victims:**                                                      

  **1998 (percentage of                                                      
  households)**                                                              

                                    **Gyumri**   **Spitak**   **Vanadzor**   **Total**

  **Lost home due to                                                         
  earthquake**                                                               

  0-10                              3.8          1.8          3.6            3.2

  11-20                             9.2          5.4          5.4            7.6

  21-30                             8.0          5.4          5.4            6.9

  31-40                             7.6          5.4          5.4            6.7

  41-50                             5.5          6.3          1.8            5.2

  51-60                             6.3          3.6          3.6            5.2

  61-70                             5.5          2.7          8.9            5.2

  71-80                             4.2          2.7          7.1            4.2

  81-100                            6.3          9.8          7.1            7.4

  101-150                           12.6         11.6         19.6           13.3

  151-200                           12.2         10.7         16.1           12.3

  201-250                           4.6          12.5         8.9            7.4

  more than 250                     14.3         22.3         7.1            15.5

                                                                             

  mean                              143          176          128            150

  N                                 238          112          56             406

                                                                             

  **Did not lose home due                                                    
  to earthquake**                                                            

  0-10                                                                       7.1

  11-20                                                                      3.5

  21-30                                                                      8.2

  31-40                                                                      7.1

  41-50                                                                      3.5

  51-60                                                                      7.1

  61-70                                                                      2.4

  71-80                                                                      10.6

  81-100                                                                     7.1

  101-150                                                                    16.5

  151-200                                                                    9.4

  201-250                                                                    4.7

  more than 250                                                              12.9

                                                                             

  Mean                              155          97           119            130

  N                                 27           2            56             85

                                                                             

  Source: October 1998                                                       
  Domic Household Survey                                                     
  conducted by the Urban                                                     
  Institute and the                                                          
  Center for Policy                                                          
  Analysis.                                                                  
  ----------------------- --------- ------------ ------------ -------------- -----------

  -------------------- -------- ------------ ------------ -------------- ----------- --------
  **Table 2.24**                                                                     

  **Total Monthly                                                                    
  Expenditures without                                                               
  Heating Fuel for                                                                   
  Waiting List                                                                       
  Households: 1998                                                                   
  (percentage of                                                                     
  households)**                                                                      

                                                                                     

                                                                                     

                                **Gyumri**   **Spitak**   **Vanadzor**   **Total**   

                                                                                     

  **On waiting list**                                                                

  0-10                          3.3          2.0          3.3            3.0         

  11-20                         7.4          4.0          10.0           6.9         

  21-30                         8.2          4.0          6.7            6.9         

  31-40                         11.5         8.0          6.7            9.9         

  41-50                         5.7          6.0          3.3            5.5         

  51-60                         8.2          4.0          0.0            5.9         

  61-70                         4.1          2.0          6.7            4.0         

  71-80                         3.3          2.0          6.7            3.5         

  81-100                        8.2          8.0          6.7            7.9         

  101-150                       13.1         12.0         16.7           13.4        

  151-200                       11.5         12.0         13.3           11.9        

  201-250                       4.1          16.0         16.7           8.9         

  more than 250                 11.5         20.0         3.3            12.4        

                                                                                     

  mean                          133          170          109            139         

  N                             122          50           30             202         

                                                                                     

  **Not on waiting                                                                   
  list**                                                                             

  0-10                          6.6          1.6          3.7            4.6         

  11-20                         9.6          6.4          3.7            7.1         

  21-30                         7.4          6.4          6.2            6.8         

  31-40                         3.7          3.2          4.9            3.9         

  41-50                         4.4          6.4          3.7            4.6         

  51-60                         4.4          4.8          6.2            5.0         

  61-70                         6.6          3.2          4.9            5.4         

  71-80                         5.2          3.2          12.4           6.8         

  81-100                        4.4          11.1         7.4            6.8         

  101-150                       14.0         12.7         16.1           14.3        

  151-200                       11.0         9.5          14.8           11.8        

  201-250                       4.4          7.9          4.9            5.4         

  more than 250                 18.4         23.8         11.1           17.5        

                                                                                     

  mean                          158          177          130            154         

  N                             136          63           81             280         

                                                                                     

  Source: October 1998                                                               
  Domic Household                                                                    
  Survey conducted by                                                                
  the Urban Institute                                                                

  and the Center for                                                                 
  Policy Analysis.                                                                   
  -------------------- -------- ------------ ------------ -------------- ----------- --------

**Chapter 3**

**ECONOMIC ISSUES**

1.  **Housing Description and Analysis of Changes\
    **

**3.2 Residential Real Estate Market Evaluation\
**

**3.1 Description of Housing Stock of the Earthquake Zone and**

**Selected Cities (Gyumri, Vanadzor, Spitak) and Analysis of Changes**

The analysis presented was conducted through summarizing official,
statistical and other materials concerning the earthquake zone which
have been received from various sources received (see the list of
referenced materials).

It is necessary to note that, during the analysis, some data concerning
the same issue differed a bit from one other. This depended on the
source from which materials were taken. For that reason, it was decided
to use only data obtained from official and statistical sources for
making conclusions.

The housing stock of the earthquake zone and selected cities before and
after the earthquake.

The housing stock (state and private) of the earthquake zone before the
earthquake in the selected cities was [^8]^\*)^ thousands m^2^: Gyumri
-- 2536.0 thousands m^2^, Vanadzor -- 2067.0 thousands m^2^, Spitak --
282.0 thousands m^2^ of total area **(Table 3.1)**.

As a result of the earthquake, the following degree of damage occurred
to the state housing stock in Gyumri, Vanadzor, and Spitak respectively:
86.4%, 34.1%, 100% (Fig. 3.1). The damaged housing stock for the entire
earthquake zone consists of 8,906,300 m^2^ of total area **(Table
3.2)**.

**Table 3.1. The housing stock of the selected cities (total -- state
and private)**

**thousands of m^2^ of total area**

+-------+-----------+--------+---------+--------+----------+----------+
|       | **Housing | **D    | **De    | **S    | **U      | **New    |
|       | stock     | amaged | stroyed | ubject | ndamaged | constr   |
|       | before    | h      | and     | to     | by he    | uction** |
|       | the       | ousing | subject | r      | eart     |          |
|       | ear       | s      | to      | einfor | hquake** | **198    |
|       | thquake** | tock** | demol   | cement |          | 9-1996** |
|       |           |        | ition** | (D)**  | **Later  |          |
|       | **(on     | **(B)  |         |        | suitable |          |
|       | 01        | =      | **(C)** |        | for      |          |
|       | .01.88)** | C+D**  |         |        | habi     |          |
|       |           |        |         |        | tation** |          |
|       | **(A)**   |        |         |        |          |          |
|       |           |        |         |        | **(E) =  |          |
|       |           |        |         |        | A-B**    |          |
+-------+-----------+--------+---------+--------+----------+----------+
| **Gyu | 2536      | 2193   | 1427    | 766    | 343      | 800      |
| mri** |           |        |         |        |          |          |
+-------+-----------+--------+---------+--------+----------+----------+
| **    | 2067      | 1993   | 623     | 1370   | 74       | 432      |
| Vanad |           |        |         |        |          |          |
| zor** |           |        |         |        |          |          |
+-------+-----------+--------+---------+--------+----------+----------+
| **Spi | 282       | 282    | 282     | 0      | 0        | 93       |
| tak** |           |        |         |        |          |          |
+-------+-----------+--------+---------+--------+----------+----------+

![](media/image4.wmf)

Fig. 3.1. The percentage of the state housing stock in Gyumri, Vanadzor,
Spitak before, after the earthquake, and occupied in 1989-1997.

**Table 3.2. State housing stock of the selected cities**[^9]**.**

  ---------------- -------------- ------------------- -----------------------
                                  **Thousands         
                                  m^2^/number of      
                                  apartments**        

                   **Before the   **Damaged because   **Occupied in
                   earthquake**   of the earthquake** 1989-1997**

  **Earthquake                    8906.3/ -           3278.4/ -
  zone**                                              

  **Gyumri**       1831.4/ -      1582.0/ 27020       608.8/ 8171

  **Vanadzor**     1378.4/ -      470.5/ 8504         398.9/ 5232

  **Spitak**       125.0/ -       125.0/ 2695         43.7/ 647
  ---------------- -------------- ------------------- -----------------------

One part of the damaged housing stock in the earthquake zone and
selected cities is completely destroyed, part is subject to demolition,
the remainder is the buildings with degree III of damage, which are not
suitable for occupancy (Table 3.3). However, the latter are subject to
reinforcement and ultimately can be used as permanent residential
buildings. Subject to reinforcement, the degree III damaged housing
stock constitutes the following percentages of the total damaged fund in
Gyumri, Vanadzor, and Spitak respectively: 25.4%, 48.6%, 14.2% (Fig.
3.2).

Data on total area of the state housing stock for cities Gyumri,
Vanadzor, Spitak are given only for urban areas (without adjacent rural
areas).

**Table 3.3. Description of the housing stock damaged due to
earthquake**[^10]

+---------------------+---------------+---------------+---------------+
|                     |               | **Including** |               |
+---------------------+---------------+---------------+---------------+
|                     | #             | **Destroyed   | **Subject to  |
|                     | ####### Total | and subject   | st            |
|                     |               | to            | rengthening** |
|                     |               | destroying**  |               |
+---------------------+---------------+---------------+---------------+
| 1                   | 2             | 3             | 4             |
+---------------------+---------------+---------------+---------------+
| Total in the        | 8906.3        | \-            | \-            |
| earthquake zone,    |               |               |               |
| thousands m^2^      | 4300.0        | \-            | \-            |
|                     |               |               |               |
| gross area          | 4606.3        | \-            | \-            |
|                     |               |               |               |
| including           |               |               |               |
|                     |               |               |               |
| State               |               |               |               |
|                     |               |               |               |
| and private         |               |               |               |
+---------------------+---------------+---------------+---------------+
| # Gyumri            | 1582.0        | 1180.2        | 401.8         |
|                     |               |               |               |
| State, thousands    | 27020         | 20612         | 6408          |
| m^2^                |               |               |               |
|                     |               |               |               |
| gross area          |               |               |               |
|                     |               |               |               |
| number of           |               |               |               |
| apartments          |               |               |               |
+---------------------+---------------+---------------+---------------+
| # Vanadzor          | 470.5         | 241.8         | 228.7         |
|                     |               |               |               |
| State               | 8504          | 4755          | 3749          |
|                     |               |               |               |
| thousands m^2^      |               |               |               |
|                     |               |               |               |
| gross area          |               |               |               |
|                     |               |               |               |
| number of           |               |               |               |
| apartments          |               |               |               |
+---------------------+---------------+---------------+---------------+
| # Spitak            | \-            | \-            | \-            |
|                     |               |               |               |
| Total               | 3911          | 3621          | 290           |
|                     |               |               |               |
| thousands m^2^      | 125           | 107.3         | 17.7          |
|                     |               |               |               |
| gross area          | 2695          | 2405          | 290           |
|                     |               |               |               |
| Number of           | \-            | \-            | \-            |
| apartments          |               |               |               |
|                     | 1216          | 1216          | \-            |
| including           |               |               |               |
|                     |               |               |               |
| a\) state           |               |               |               |
|                     |               |               |               |
| thousands m^2^      |               |               |               |
|                     |               |               |               |
| gross area          |               |               |               |
|                     |               |               |               |
| Number of           |               |               |               |
| apartments          |               |               |               |
|                     |               |               |               |
| ) private           |               |               |               |
|                     |               |               |               |
| thousands m^2^      |               |               |               |
|                     |               |               |               |
| gross area          |               |               |               |
|                     |               |               |               |
| Number of           |               |               |               |
| apartments          |               |               |               |
+---------------------+---------------+---------------+---------------+

Fig. 3.2. Description of the state housing stock damaged by the
earthquake in the cities of Gyumri, Vanadzor, and Spitak

State housing stock destroyed and subject to demolition

> Subject to reinforcement (degree III of damage) State housing stock

![](media/image6.wmf)![](media/image7.wmf)![](media/image8.wmf)

The structure of the housing stock of selected cities in the earthquake
zone in terms of the forms of privatization (**Table 4**) shows that in
Gyumri, mainly the State housing stock is destroyed (95%), the same in
Vanadzor (63%). In Spitak, the destroyed private housing stock
constitutes 56%. In Gyumri, the portion of the State housing stock
subject to reinforcement is less than that in Vanadzor. It constitutes
48% versus 72% in Vanadzor

**Table 3.4.The structure of housing stock of selected cities of the
earthquake zone by the forms of privatization**.

+-----------------+-----------------+-----------------+-----------------+
|                 | **Housing stock | **Subject to    | **New           |
|                 | destroyed or    | reinforcement** | construction**  |
|                 | subject to      |                 |                 |
|                 | demolition**    |                 | **1989-1996**   |
+-----------------+-----------------+-----------------+-----------------+
| # Gyumri        | 95              | 48              | 77              |
|                 |                 |                 |                 |
| State (%)       | 5               | 52              | 23              |
|                 |                 |                 |                 |
| private (%)     |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| # Vanadzor      | 63              | 72              | 95              |
|                 |                 |                 |                 |
| State (%)       | 37              | 28              | 5               |
|                 |                 |                 |                 |
| private (%)     |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| # Spitak        | 44              | \-              | 90              |
|                 |                 |                 |                 |
| State (%)       | 56              | \-              | 10              |
|                 |                 |                 |                 |
| private (%)     |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+

The 1989-1997 process of reconstruction in the earthquake zone and
selected cities damaged by the earthquake.

The reconstruction completed in selected cities from 1989-1997 is
presented in **Table 3.5**. In Gyumri, Vanadzor, and Spitak the total
area of housing stock is as follows respectively: 608,800 m^2^ (8171
apartments), 398,900 m^2^ (5232 apartments), 43,700 m^2^ (647
apartments). In Spitak, the occupied number of apartments including
private apartments constitutes 1,025.

The larger part of the occupied housing stock consists of new buildings
(Fig. 3.3). For instance, in Gyumri it is 90.3%, Vanadzor -- 85.4%,
Spitak -- 77.8%.

The construction activity in the earthquake zone during those years was
financed from a number of sources. They were mainly State sources,
grants, out budget and private sources. In recent years (1995-1997), the
main sources of financing were a World Bank loan (around 60%) and
private contributions (around 30%). In 1997, the share of financing
coming from the state budget and the All-Armenian Fund increased in
terms of the total financing means (**Table 3.6**).

**Table 3.5. Reconstructed housing stock in Cities Gyumri, Vanadzor,
Spitak, the earthquake zone during 1989-1997.**

+------------------+------------------+------------------+-------------+
|                  |                  | **Including**    |             |
+------------------+------------------+------------------+-------------+
|                  | **Total**        | **New**          | **Rein      |
|                  |                  |                  | forcement** |
|                  |                  | **construction** |             |
+------------------+------------------+------------------+-------------+
| Total in the     | 3300.0           | \-               | \-          |
| earthquake zone  |                  |                  |             |
|                  | 2300.0           |                  |             |
| gross area       |                  |                  |             |
|                  | 1000.0           |                  |             |
| thous. m^2^      |                  |                  |             |
|                  |                  |                  |             |
| including        |                  |                  |             |
|                  |                  |                  |             |
| State            |                  |                  |             |
|                  |                  |                  |             |
| private          |                  |                  |             |
+------------------+------------------+------------------+-------------+
| **Gyumri**       | 608.8            | 549.9            | 58.9        |
|                  |                  |                  |             |
| State housing    | 8171             | 7352             | 819         |
| stock thous.     |                  |                  |             |
| m^2^             |                  |                  |             |
|                  |                  |                  |             |
| gross area       |                  |                  |             |
|                  |                  |                  |             |
| Number of        |                  |                  |             |
| apartments       |                  |                  |             |
+------------------+------------------+------------------+-------------+
| # Vanadzor       | 398.9            | 340.6            | 58.3        |
|                  |                  |                  |             |
| State housing    | 5232             | 4338             | 894         |
| stock thous.     |                  |                  |             |
| m^2^             |                  |                  |             |
|                  |                  |                  |             |
| gross area       |                  |                  |             |
|                  |                  |                  |             |
| Number of        |                  |                  |             |
| apartments       |                  |                  |             |
+------------------+------------------+------------------+-------------+
| **Spitak**       | 1025             | 863              | 162         |
|                  |                  |                  |             |
| Total            | 43.7             | 34               | 9.7         |
|                  |                  |                  |             |
| thous. m^2^      | 647              | 485              | 162         |
|                  |                  |                  |             |
| gross area       | 378              | 378              | \-          |
|                  |                  |                  |             |
| number of        |                  |                  |             |
| apartments       |                  |                  |             |
| including        |                  |                  |             |
|                  |                  |                  |             |
| a)  State        |                  |                  |             |
|     housing      |                  |                  |             |
|     stock        |                  |                  |             |
|                  |                  |                  |             |
| thous. m^2^      |                  |                  |             |
|                  |                  |                  |             |
| gross area       |                  |                  |             |
|                  |                  |                  |             |
| number of        |                  |                  |             |
| apartments       |                  |                  |             |
|                  |                  |                  |             |
| b\) private      |                  |                  |             |
| housing stock    |                  |                  |             |
| thous. m^2^      |                  |                  |             |
|                  |                  |                  |             |
| gross area       |                  |                  |             |
|                  |                  |                  |             |
| Number of        |                  |                  |             |
| apartments       |                  |                  |             |
+------------------+------------------+------------------+-------------+

Fig.3.3 State housing stock in the earthquake zone, Gyumri, Vanadzor,
Spitak from

1989-1997

New construction

Reinforcement

![](media/image9.wmf)![](media/image10.wmf)![](media/image11.wmf)

**Table 3.6. Construction of the residential units in the earthquake
zone by various sources**

+------------------+----------+--------+-------+-----+------+-----+
|                  | **1995** |        | **1   |     | **19 |     |
|                  |          |        | 996** |     | 97** |     |
+------------------+----------+--------+-------+-----+------+-----+
|                  | **m^2^** | *      | **m   | *   | **m^ | *   |
|                  |          | *(%)** | ^2^** | *(% | 2^** | *(% |
|                  |          |        |       | )** |      | )** |
+------------------+----------+--------+-------+-----+------+-----+
| **State          | 98,100   | 57.0   | 3     | 6   | 62   | 4   |
| sources**        |          |        | 5,300 | 0.2 | ,400 | 5.5 |
|                  | 300      | 0.1    |       |     |      |     |
| **including**    |          |        | 3     | 6   | 22   | 1   |
|                  | 97,800   | 56.8   | 5,300 | 0.2 | ,200 | 6.1 |
| **State budget** |          |        |       |     |      |     |
|                  |          |        |       |     | 40   | 2   |
| **World Bank     |          |        |       |     | ,200 | 9.2 |
| loan**           |          |        |       |     |      |     |
+------------------+----------+--------+-------+-----+------+-----+
| **Grants**       | 14,900   | 8.7    | 5,400 | 9.1 | 20   | 1   |
|                  |          |        |       |     | ,000 | 4.5 |
| **including**    | 14,200   | 8.3    | 3,200 | 5.4 |      |     |
|                  |          |        |       |     | 20   | 1   |
| **All-Armenian   | 700      | 0.4    | 2,200 | 3.7 | ,000 | 4.5 |
| Fund**           |          |        |       |     |      |     |
|                  |          |        |       |     | \-   | \-  |
| **UNHCR**        |          |        |       |     |      |     |
+------------------+----------+--------+-------+-----+------+-----+
| **Out budget     | 5,900    | 3.4    | \-    | \-  | 5    | 3.6 |
| financing**      |          |        |       |     | ,000 |     |
|                  | 4,900    | 2.9    | \-    | \-  |      | 3.6 |
| **including**    |          |        |       |     | 5    |     |
|                  | 1,000    | 0.5    | \-    | \-  | ,000 | \-  |
| **enterprises**  |          |        |       |     |      |     |
|                  |          |        |       |     | \-   |     |
| **local          |          |        |       |     |      |     |
| governments**    |          |        |       |     |      |     |
+------------------+----------+--------+-------+-----+------+-----+
| **Private        | 53,200   | 30.9   | 1     | 3   | 50   | 3   |
| sources**        |          |        | 8,000 | 0.7 | ,000 | 6.4 |
+------------------+----------+--------+-------+-----+------+-----+
| **Total**        | 172,100  | 100    | 5     | 100 | 137  | 100 |
|                  |          |        | 8,700 |     | ,400 |     |
+------------------+----------+--------+-------+-----+------+-----+

It is necessary to note that because of a number of objective and
subjective reasons, the reconstruction process in the earthquake zone
has been curtailed.

For instance, in Gyumri the housing stock constructed from 1989-1997 the
construction of housing stock constitutes only 46.6% of the destroyed
and subject to demolition housing stock. In Spitak this amounts to 31.7%
in Vanadzor the destroyed housing stock is not so big (51.4%) compared
with Gyumri (74.6%) and Spitak (85.8%), for this very reason the share
of occupied housing stock is more there (84.8%) (**Fig.3. 4**).

**Fig. 3.4. Residential units occupied from 1989-1997: new construction
versus buildings destroyed/subject to demolition ( in cities Gyumri,
Vanadzor, Spitak).**

![](media/image12.wmf)

The process of building reinforcement in the aforementioned cities is
also very slow.

Only 14.7% of the total buildings subject to reinforcement have been
strengthened in Gyumri; in Vanadzor, 25.5%; Spitak, 55.9%. In Spitak,
the share of buildings subject to reinforcement (14.2%) is less as
compared with that in Gyumri (25.4%) and Vanadzor (48.6%). This fact
should explain the high percentage of completion observed in Spitak.

Analysis of new construction, construction completion and building
reinforcement costs in Gyumri, Vanadzor, and Spitak.

This cost analysis is conducted for both new and old regions of the
cities, on the basis of resources provided by the Municipal Development
Office (Table 3.7).

As a result of this analysis, the following conclusions have been made:

1.  The average cost of 1 m^2^ of gross area of new buildings
    constructed in the old regions of Spitak amounts to around 240 USD
    (or mean cost of an average apartment is around 18,000 USD). The
    average cost of building reinforcement in these regions is 114 USD
    (or around 7,000 USD per apartment).

> In the new regions of the city , the average cost of construction of a
> pilot residential complex is rather high. It constitutes \$230/m^2^
> (on average, \$12,000/apartment). In Spitak's new regions, it has
> become traditional to finish construction of incomplete buildings, the
> cost of which is closed to the damaged buildings reinforcement costs
> in old regions (\$140/m^2^ of total area or \$8,600 /apartment).

Table 3.7.Construction costs analysis in the selected cities of the
earthquake zone[^11]

+-------------+--------+---------+--------+----------+------+------+
|             | **Mean |         |        |          |      |      |
|             | constr |         |        |          |      |      |
|             | uction |         |        |          |      |      |
|             | costs, |         |        |          |      |      |
|             | USD**  |         |        |          |      |      |
+-------------+--------+---------+--------+----------+------+------+
|             | **New  |         | **     |          | *    |      |
|             | co     |         | Constr |          | *rei |      |
|             | nstruc |         | uction |          | nfor |      |
|             | tion** |         | comple |          | ceme |      |
|             |        |         | tion** |          | nt** |      |
+-------------+--------+---------+--------+----------+------+------+
|             | **1    | **per** | **1    | **per**  | **1  | **p  |
|             | m^2^   |         | m^2^   |          | m^2^ | er** |
|             | of     | **apar  | of     | **apa    | of   |      |
|             | total  | tment** | total  | rtment** | t    | *    |
|             | area** |         | area** |          | otal | *apa |
|             |        |         |        |          | ar   | rtme |
|             |        |         |        |          | ea** | nt** |
+-------------+--------+---------+--------+----------+------+------+
| # Gyumri    | 192.0  | 16,400  | \-     | \-       | 92.0 | 6    |
|             |        |         |        |          |      | ,300 |
| a)  old     | \-     | \-      | 58.0   | 4300     | \-   |      |
|     region  |        |         |        |          |      | \-   |
|             |        |         |        |          |      |      |
| b)  new     |        |         |        |          |      |      |
|     region  |        |         |        |          |      |      |
+-------------+--------+---------+--------+----------+------+------+
| # Vanadzor  | \-     | \-      | \-     | \-       | 90.0 | 6    |
|             |        |         |        |          |      | ,000 |
| a)  old     | \-     | \-      | 80.0   | 5000     | \-   |      |
|     region  |        |         |        |          |      | \-   |
|             |        |         |        |          |      |      |
| b)  new     |        |         |        |          |      |      |
|     region  |        |         |        |          |      |      |
+-------------+--------+---------+--------+----------+------+------+
| # Spitak    | 240    | 17,500  | \-     | \-       | 1    | 7100 |
|             |        |         |        |          | 13.0 |      |
| Pilot       | 46.0   | 2,700   | 140    | 8600     |      | \-   |
| project     |        |         |        |          | \-   |      |
|             | 230.0  | 11,600  | \-     | \-       |      | \-   |
| a)  old     |        |         |        |          | \-   |      |
|     region  |        |         |        |          |      |      |
|             |        |         |        |          |      |      |
| b)  new     |        |         |        |          |      |      |
|     region  |        |         |        |          |      |      |
+-------------+--------+---------+--------+----------+------+------+

2.  In Gyumri's old regions, the reinforcement of earthquake-damaged
    buildings is main activity. The reinforcement cost of 1 m^2^ of
    total area fluctuates, mostly depending on the level of damage of
    the buildings. The mean reinforcement cost is around 92 USD/m^2^ of
    total area (around \$6,000/apartment).

> In new regions of the city (Ani, Mush), the completion of the
> construction of incomplete building is practiced. The construction
> cost of such work for 1 m^2^ of the total area is 58 USD/m^2^ (around
> \$4,000/apartment).
>
> In the old city center, the construction cost of newly built 4-storey,
> 16 unit apartment buildings is 191 USD/m^2^ of total area (around
> \$16,000/apartment).

3.  In Vanadzor's old regions, no new construction was started;
    earthquake-damaged buildings have been strengthened. The average
    building reinforcement cost is around \$90/m^2^ of total area
    (around \$6,000/apartment). In the city's new region "Taron", the
    construction of previously started, incomplete buildings was
    completed, for which the average construction cost is around
    \$80/m^2^ of total area (around \$5,000/apartment).

In the above mentioned average construction costs, the expenses related
to off-site infrastructure are not included. It is necessary to note
that the figures corresponding to the provision of infrastructure in the
selected cities are rather large (Table 3.8). However, this does not
implicitly indicate satisfactory condition.

Table 3.8. Provision of public facilities and supply services for
selected cities of the earthquake zone.

+-------------------+---------------+---------------+------------------+
|                   | **The share   |               |                  |
|                   | of unions of  |               |                  |
|                   | apartments    |               |                  |
|                   | having access |               |                  |
|                   | to public     |               |                  |
|                   | facilities    |               |                  |
|                   | and           |               |                  |
|                   | services**    |               |                  |
+-------------------+---------------+---------------+------------------+
|                   | # **Gyumri**  | **Vanadzor**  | **Spitak**       |
+-------------------+---------------+---------------+------------------+
| **Energy supply** | 100           | 100           | 100              |
+-------------------+---------------+---------------+------------------+
| **Water supply**  | 95            | 50            | 83               |
+-------------------+---------------+---------------+------------------+
| **Sewerage**      | 95            | 50            | 50               |
+-------------------+---------------+---------------+------------------+
| **Roads**         | \*            | 60            | 90               |
+-------------------+---------------+---------------+------------------+
| **Public          | 30            | 60            | 90               |
| Transport**       |               |               |                  |
+-------------------+---------------+---------------+------------------+
| **Garbage         | 30            | 55            | 85               |
| disposal**        |               |               |                  |
+-------------------+---------------+---------------+------------------+

\* Only 36% of roads meet certain minimal technical conditions. In
regions being actively developed there is a lack of good roads.

## **3.2 Estimation of Housing Real Estate Market**

## Investigation of the Real Estate Market in the City of Gyumri

In Gyumri the professional realtor market has been functioning since
1996.

> Currently in Gyumri, 2 firms are operating: "Shirakestate" -- Square
> Mira 6/1, "Ventor" -- the Central Square, Hotel "Kumairi".

According to the system accepted by realtor firms, Gyumri is divided to
7 price zones (see map), which include the following districts and
streets:

I)  Saiat-Nova Avenue, Kirov St., Central Square, Square Pobeda, Square
    Nezawisimost;

II) Internatsionalnaia St., Gorkii St. up to the Station, Shirakatsi
    St., and 8-th, Gorodok;

III) Micro-district Ani -- central part up to Sakharov Square, District
     Stroimash, Leningradian St. (the beginning);

IV) Leningradian St., Manushian St.;

V)  Gorge region, Arveladze St., Military Garnizon

VI) Micro-district Bulvarnii, Meat Factory, Nor-Avan towards Akhurian;

VII) Mush -- 1, Mush -- 2.

Main building types in Gyumri in order of market preference:

a)  Masonry with ferro-concrete spans, the height of ceiling is 3 m and
    more;

b)  Monolithic ferro-concrete structures;

c)  Masonry with seismic strengthening;

d)  Masonry with wood spans;

e)  Panel-frame house;

f)  Panel.

The list of price-forming indicators in Gyumri:

a)  Price zone (see above);

b)  Type of building (see above);

c)  Story;

> Indicator, which shows more beneficial location of the apartment,
> depending on the level of floor, level of urbanization of the
> district. In Gyumri the floor coefficient for the first and the last
> floor in average is a 20% reduction, and the optimal floors are
> regarded to be the second and the third.

d)  Level of interior decoration and infrastructure (engineering
    conditions);

> One of the main price-forming indicators of a dwelling is always the
> state of an internal repair of the apartment. This indicator is
> immediately related with the expense principle and determines the
> suitability of a dwelling according to its exploitation and functional
> qualities and aesthetic value. In Gyumri around 5% of apartments has
> been repaired after the earthquake. The following 6-level system for
> evaluation of the renovation is used:
>
> 0 -- state of disrepair;
>
> 1 -- original state finish;
>
> 2 -- older renovation;
>
> 3 -- average condition;
>
> 4 -- good condition;
>
> 5 -- excellent condition.

e)  Degree of Deterioration;

After the earthquake, all remaining housing stock in Gyumri was
categorized by Degree III of Deterioration according to real estate
agencies\' information.

In **Table 3.9** are shown prices for 1, 2, 3-4 room apartments in the
3^rd^ price zone, condition: 0, on the first and last floors.

### Table 3.9

**(all prices are in USD)**

  -------------- -------------- ----------------- -------------- -------------- --------------
  **Number of    **New          **Degree of                                     
  rooms**        building**     Deterioration**                                 

                                                  **I**          **II**         **III**

  1              3 000                            2 000          1 500          1 000

  2              4 500                            3 500          2 000          1 500

  3,4            6 500                            5 500          4 000          3 000
  -------------- -------------- ----------------- -------------- -------------- --------------

At the basis of the deterioration calculations the statistical mean
indicator

of reduction is taken for 1 room apartments -- 23%, 2 room -- 48%, 3,4
room - 62%.

The prices for "elite" apartments with excellent conditions are from
20-35 thousands USD. The following range for average areas of apartments
were used:

1 room -- 35 m^2^ -- 50 m^2^;

2 room -- 50 m^2^ -- 90 m^2^;

> 3,4 room -- 90 m^2^ -- 120 m^2^;

In **Table 3.10** prices for 1 m^2^ of gross housing area in Gyumri,
depending on price zone and Degree of Deterioration are shown:

##### Table 3.10 Cost of 1 m^2^ of residential real estate in Gyumri on 10. 10. 1998 (all prices are presented in USD)

+-----------+---------+------------+------------+-------------+------+
| **Price   | **Cost  | **Cost of  | **Cost of  | **Cost of 1 | **   |
| zone**    | of 1    | 1 m^2^ in  | 1 m^2^ in  | m^2^ in     | Cost |
|           | m^2^ in | buildings  | buildings  | buildings   | of 1 |
|           | new     | with       | with       | with Degree | m^2^ |
|           | buil    | Degree of  | Degree of  | of          | of a |
|           | dings** | Det        | Det        | De          | pl   |
|           |         | erioration | erioration | terioration | ot** |
|           |         | I**        | II**       | III**       |      |
+-----------+---------+------------+------------+-------------+------+
| # I       | \$      | \$ 84,7    | \$ 57,2    | \$ 41,8     | \$   |
|           | 110,0   |            |            |             | 25,0 |
+-----------+---------+------------+------------+-------------+------+
| **II**    | \$ 60,0 | \$ 46,2    | \$ 31,2    | \$ 22,8     | \$   |
|           |         |            |            |             | 13,0 |
+-----------+---------+------------+------------+-------------+------+
| **III**   | \$ 58,0 | \$ 44,7    | \$ 30,2    | \$ 22,0     | \$   |
|           |         |            |            |             | 6,0  |
+-----------+---------+------------+------------+-------------+------+
| **IV**    | \$ 30,0 | \$ 23,1    | \$ 15,6    | \$ 11,4     | \$   |
|           |         |            |            |             | 0,6  |
+-----------+---------+------------+------------+-------------+------+
| **V**     | \$ 27,0 | \$ 20,8    | \$ 15,0    | \$ 10,3     | \$   |
|           |         |            |            |             | 0,5  |
+-----------+---------+------------+------------+-------------+------+
| **VI**    | \$ 18,0 | \$ 13,9    | \$ 9,4     | \$ 6,8      | \$   |
+-----------+---------+------------+------------+-------------+------+
| **VII**   | \$ 12,0 | \$ 9,2     | \$ 6,2     | \$ 4,6      | \$   |
+-----------+---------+------------+------------+-------------+------+
| **Stat.   | \$ 45,0 | \$ 34,7    | \$ 23,4    | \$ 17,1     | \$   |
| mean**    |         |            |            |             | 9,0  |
+-----------+---------+------------+------------+-------------+------+

For calculations of the base statistical mean for costs of residential
units in Gyumri data from the City's realtor firms are used as
standards.

At the basis of cost calculations, an apartment in the average type
building, in the average floor, in average condition is taken as the
average base indicator.

## 

## **Investigation of the Real Estate Market in the City of Vanadzor**

In Vanadzor the professional "realtor" (real estate brokerage firm)
market has been functioning since 1995. Currently in Vanadzor, 4 firms
are operating: "Commersant" (off. address: Tigran Mets 20), "Odjakh"-
Tigran Mets 71, "Vanatour" -- Tigran Mets 22, "Frank".

According to a system accepted by realtor firms, Vanadzor is divided to
5 price zones (see map), which include the following districts and
streets:

I)  Tigran Mets Avenue, Terian St., Vardanants St., Zakarian St.,
    Tumanian St.;

II) District Tsalkut (Khorenatsi St., Moscovian St., part of Tumanian
    St., Grigor Lusarovich St.);

III) District of Chem. Mach. (part of Terian St., Moscovian St.,
     Ogostosi 23 St., part of Vardanants St.);

IV) Districts Diomats, Arapnia, Taron-1, Taron-2, Taron-3;

V)  Districts Bazum, Taron-4, Khndzorut-1, 2.

The main types of buildings in Vanadzor in order of market preference
are as follows:

a)  Monolithic ferro-concrete structures;

b)  Masonry with ferro-concrete spans, the height of ceiling is 3 m and
    more;

c)  Panel;

d)  Masonry with ferro-concrete spans, the height of ceiling is 2.58 m.

The list of price-forming indicators in Vanadzor:

a)  Price zone;

b)  Type of structure (see above);

c)  Story;

> Indicator, which shows more beneficial location of the apartment,
> depending on which story, level of urbanization of the district. In
> Vanadzor the story coefficient for the first and the last floors on
> average is 30% less, and the optimal floors are regarded to be the
> second and the third.

d\) Level of interior decoration and infrastructure (engineering
conditions);

> One of the main price-forming indicators of a dwelling is always the
> state of internal repair of the apartment. This indicator is
> immediately related to the expense principle and determines the
> suitability of a dwelling according to its use and functional
> qualities and aesthetic value. In Vanadzor, around 10% of apartments
> have been renovated since the earthquake. The following 6-level system
> for evaluation of the renovation is used:
>
> 0 -- state of disrepair;
>
> 1 -- original State finish;
>
> 2 -- older renovation;
>
> 3 -- average condition;
>
> 4 -- good condition;
>
> 5 -- excellent condition.
>
> e\) Degree of Deterioration
>
> After the earthquake, 20-30% of the housing stock (from data of
> realtor firms) has become susceptible to deterioration, by Degree III
> of Deterioration.

**Table 3.11** shows prices for 1 and 2 room apartments in the 5^th^
price zone, condition: 0, on the first and last floors.

**Table 3.11**

**(all prices are in USD)**

  -------------- -------------- ------- ----------------- -------------- -----------
  **Number of    **New                  **Degree of                      
  rooms**        building**             Deterioration**                  

                                **I**                     **II**         **III**

  1              1 400          1 000                     800            500

  2              2 200          1 600                     1 000          700
  -------------- -------------- ------- ----------------- -------------- -----------

In **Table 3.12** prices for the apartments in the 1^st^ price zone, on
the second and third floors, condition: 3 are shown for comparison.

# **Table 3.12**

**(all prices are presented in USD)**

+-------------+-------------+-------------+-------------+-----------+
| **Number of | **New       | ### D       |             |           |
| rooms**     | building**  | egree of De |             |           |
|             |             | terioration |             |           |
+-------------+-------------+-------------+-------------+-----------+
|             |             | **I**       | **II**      | **III**   |
+-------------+-------------+-------------+-------------+-----------+
| 1           | 4 000       | 1 800       | 1 500       | 800       |
+-------------+-------------+-------------+-------------+-----------+
| 3,4         | 16 000      | 10 000      | 7 000       | 4 000     |
+-------------+-------------+-------------+-------------+-----------+

At the basis of deterioration calculations the statistical mean
indicator of reduction is taken (for 1 room apartments -- 37%, 2 room --
55%, 3 and 4 rooms -- 72%).

The prices for "elite" apartments with excellent condition are within
17-20 thousands USD. The following range of average areas of apartments
were used:

1 room -- 32 m^2^ -- 48 m^2^;

2 room -- 47 m^2^ -- 62 m^2^;

3 room -- 61 m^2^ -- 110 m^2^;

4 room -- 71 m^2^ -- 120 m^2^.

5\. In **Table 3.13** prices for 1 m^2^ of gross housing area in
Vanadzor are shown, depending on price zone and the Degree of
Deterioration:

**Table 3.13**

**Cost of 1 m^2^ of residential real estate**

**in Vanadzor on 10. 10. 1998**

**(all prices are in USD)**

+-----------+---------+------------+------------+------------+------+
| **Price   | **Cost  | **Cost of  | **Cost of  | **Cost of  | **   |
| zone**    | of 1    | 1 m^2^ in  | 1 m^2^ in  | 1 m^2^ in  | Cost |
|           | m^2^ in | buildings  | buildings  | buildings  | of 1 |
|           | new     | with       | with       | with       | m^2^ |
|           | buil    | Det        | Det        | Det        | of a |
|           | dings** | erioration | erioration | erioration | pl   |
|           |         | Degree I** | Degree     | Degree     | ot** |
|           |         |            | II**       | III**      |      |
+-----------+---------+------------+------------+------------+------+
| # I       | 85,0    | 53,6       | 38,2       | 23,8       | 25,0 |
+-----------+---------+------------+------------+------------+------+
| **II**    | 70,0    | 44,1       | 31,5       | 19,6       | 20,0 |
+-----------+---------+------------+------------+------------+------+
| **III**   | 55,0    | 34,6       | 24,7       | 15,4       | 10,0 |
+-----------+---------+------------+------------+------------+------+
| **IV**    | 35,0    | 22,0       | 15,7       | 9,8        | 5,0  |
+-----------+---------+------------+------------+------------+------+
| **V**     | 25,0    | 15,7       | 11,2       | 7,0        | 1,0  |
+-----------+---------+------------+------------+------------+------+
| **Stat.   | 54,0    | 34,0       | 24,3       | 15,1       | 12,2 |
| Mean**    |         |            |            |            |      |
+-----------+---------+------------+------------+------------+------+

For calculations of the base statistical mean for costs of residential
units in Vanadzor, the data of the City's firms are used as standards.

At the basis of cost calculations, an apartment in the average type
building, on the average floor, in average condition is used as the
average base indicator.

## **Investigation of the Real Estate Market in the City of Spitak**

In Spitak the professional realtor market is not functioning.

> Data has been acquired through a survey of the population, and as
> presented by the representative of the "Cadastral Administration",
> Karlen Agumian.

According to the survey, Spitak is divided to 3 price zones:

> I -- Center (Bagramian St., Shaumian St., Leninakan Avenue, Torosian
> St.);
>
> II -- Ajgestan St., District Sovkhoznii;
>
> III -- New City (on the way to Yerevan).

The main types of residential units in Spitak by market preference:

a)  2- story masonry with concrete spans (cottage type);

b)  buildings with wood frame;

c)  multi-storey buildings with 2 or more entrances, with concrete and
    wood frames;

d)  after the earthquake, the reconstruction of Spitak was made by firms
    from various states, which have built certain regions of typical
    cottages.

The list of price-forming indicators in Spitak is as follows:

a)  zone;

b)  taking into account the fact that most buildings have adjacent plots
    used mostly for growing agriculture products, the prices vary by the
    productivity of a plot.

In **Table 3.14**, prices for 3 room apartments and cottages with plots
of size 1000 m^2^ are presented.

**Table 3.14** Prices for 3 room apartments and cottages with plots of
size 1000 m^2^

### 

+-------------------+----------------+----------------+----------------+
| **Type of         | **Price zone** |                |                |
| dwelling**        |                |                |                |
+-------------------+----------------+----------------+----------------+
|                   | **1**          | **2**          | **3**          |
+-------------------+----------------+----------------+----------------+
| ### Apartments    | 4 000          | 3 500          | 3 000          |
+-------------------+----------------+----------------+----------------+
| **Cottages**      | 5 000          | 4 500          | 4 000          |
+-------------------+----------------+----------------+----------------+

Apartments are commonly 3 rooms with a total area of 80 m^2^, cottages
-- 120 m^2^.

In **Table 3.15** prices for 1 m^2^ of gross housing area in Spitak
depending on price zone are shown.

## **Table 3.15 Cost of 1 m^2^ of residential real estate in Spitak on 10.10.1998 (all prices are in USD)**

+-----------------+-----------------+-----------------+-----------------+
| #### Price zone | Costs of 1 m^2^ | Costs of 1 m^2^ | Costs of 1 m^2^ |
|                 | in apartments   | in cottages     | of a plot       |
+-----------------+-----------------+-----------------+-----------------+
| I               | 50              | 42              | 1               |
+-----------------+-----------------+-----------------+-----------------+
| II              | 44              | 38              | 1               |
+-----------------+-----------------+-----------------+-----------------+
| III             | 38              | 33              | 1               |
+-----------------+-----------------+-----------------+-----------------+
| Stat. mean      | 44              | 38              | 1               |
+-----------------+-----------------+-----------------+-----------------+

At the basis of cost calculations an apartment in an average type of
building, on the average floor, in average condition is taken as the
average base indicator.

**Chapter 4**

**PHYSICAL PLANNING STRATEGY COMPONENT**

1.  **Urban Planning Consideration and Recommendations\
    **

**4.2 Construction Industry Recommendations\
**

4.1 Urban Planning Considerations and Recommendations

This discussion focuses primarily on the three cities of Gyumri,
Vanadzor and Spitak. While all of these cities share common
characteristics regarding their status of urban development conditions,
proliferation of temporary shelters ("domics"), etc., there are specific
differences which warrant individual analyses, which will be presented
first. These discussions will be followed by recommendations universal
to all cities.

[Background]{.underline}

The basic approach to earthquake recovery in all cities was to initiate
*major new areas of urban development* as opposed to immediately
starting to restore damaged areas of the existing city quarters,
although it was anticipated from the onset that a certain number of
damaged buildings would eventually be reinforced and put back into use.
The situation in the days following the earthquake, as can be
appreciated, was difficult. Most surviving families were initially
sheltered in tents in the immediate environs of their damaged or
destroyed residential buildings. There, they could monitor rescue
operations and retrieve personal items that remained in and around the
collapsed buildings. From another perspective, it seemed logical to
permit residents to remain in their own neighborhoods and familiar
surroundings, where a mutual support system was in place, namely their
neighbors and friends experiencing the same devastation. Difficulties in
simply moving among the debris to assess the situation was reason enough
at the time to consider other alternatives. In the end, the classic,
Soviet "scale-industry" approach of massive collection of resources and
mobilization of monumental forces prevailed and entirely new communities
were planned and ground broken within a few short months following the
earthquake. In the year or two following the earthquake, great progress
was made and many families re-housed, but construction quickly dropped
off with the disintegration of the Soviet Union. Tents would be replaced
by other temporary structures (referred to as "domics"), mostly
prefabricated, metal units intended for emergencies and short-term
domicile. Many of these remain in place today.

[GYUMRI]{.underline}

Gyumri's new region, originally planned for more than 30,000 housing
units, has only achieved about 20% of that ambitious masterplan in 10
years. Both the "Ani" District (which has been substantially completed
with 7,300 units occupied) and the "Mush" District 2, (which, while few
buildings are occupied, has a large amount of buildings at varying
levels of completions, representing over 1,800 units) are relatively
"close-in" to the original city borders, as compared to the remaining
planned areas. Policies should be considered by authorities to cease all
construction activities beyond a definitive line marking the limits of
the Ani and Mush 2 Districts. The remaining areas should be designated
for now as simply "reserve areas" with future land uses "to be
determined". While there is significant investment "in the ground"
(primarily by former USSR republics), market economics just do *not*
support trying to "recapture" those investments *at this time*.

The few existing occupied buildings which are scattered in the more
remote areas of the "New Gyumri" are already problematic in terms of
transportation, schools and other public services. The desolation of
these incomplete districts will continue to cause inconveniences for the
residents, who are just too far removed from urban activities. Retail
and service operators will not be attracted to these areas because of
the sparse population. The only practical solution is to continue to
operate the municipal bus service along the major collector road in
order to afford these residents an opportunity to access city facilities
and amenities.

In summary, where capital construction activities *are absolutely
warranted*, they should be limited to existing building reinforcements
in the old city (which represent between [five and six thousand
units]{.underline}) and finishing buildings at the highest level of
completions in the aforementioned districts only. No construction
(neither new buildings nor building completions) should be undertaken in
the New Gyumri outside Ani and Mush 2 Districts as part of the
Government's program to overcome the housing crisis in the next several
years. Unfinished residential buildings at reasonable levels of
completion in the referenced Ani and Mush 2 districts exceed [two
thousand dwelling units]{.underline}. Beyond these districts, the costs
for both initial investment for new construction, *infrastructure* to
service new buildings and the ongoing costs for municipal services make
the New Gyumri option neither practical nor cost-effective in any sense
of a market system.

Domics, it can be said, universally litter all regions of the original
city. While in recent years, enforcement of domic surrender/removal
policies (by new housing beneficiaries) has been stricter, a more
liberal treatment in the past, where domics have been permitted to
remain behind, has resulted in an unmanageable situation where the
historic relationship of "domic to earthquake displaced" has broken down
significantly. Any solution to the Gyumri housing crisis [must address
the domic situation]{.underline}. As long as the domics remain, the city
will maintain its image of a "disaster zone".

[VANADZOR]{.underline}

The situation in the New Vanadzor is different than Gyumri. Vanadzor
incurred fewer shelter losses from the earthquake, both in absolute
numbers and in percentage. Still, Vanadzor's recovery to date exceeds
80% of the goals (as compared to less than 50% in Gyumri, which suggests
some inherent differences in approaches). In part because of the
aforementioned scale difference, Vanadzor's plan of reconstruction
implementation has been phased in a more practical manner. (Gyumri
planners had no reason to doubt the continued flow of capital from
Moscow, so infrastructure development was comprehensive and massive,
anticipating that the planned city would *actually* be realized). The
new districts in Vanadzor have been built in more consolidated masses
and are generally in serviceable condition (from a municipal management
perspective). Infrastructure and public facilities are generally in
place to serve the new, completed housing units. Furthermore, there are
clearer parameters for selection of buildings and development sites for
completion, *if necessary*, to meet the current housing crisis.
Buildings started but unfinished are reported to represent between five
and six hundred housing units. Still, a similar new construction
"moratorium" should be put into effect in the New Vanadzor, and only
completions of buildings in the *highest* levels of readiness should be
considered.

The "Old Vanadzor" assumes a very different character than Gyumri.
Domics, while present, are much less obtrusive. They are restricted
today to certain limited regions of the City, in part due to management
and enforcement procedures. Still, they must be addressed. As in Gyumri,
housing delivery efforts which *must* employ construction activities,
should focus on building reinforcements in the old city and completions
of buildings in New Vanadzor as described above. The peripheral areas of
the New Vanadzor General Plan (the northeastern and northwestern
portions of the Taron Districts) should be placed in "reserve" and no
additional investment directed to them until the *effective* demand can
be justified.

As in Gyumri, Vanadzor has a large inventory of damaged housing stock,
which, if brought back into use, exceeds the housing units necessary to
meet today's critical demand because of the relative success of the new
regions. However, the remaining damaged buildings should be selectively
reinforced as part of the State Program in order to complement the
building completions in New Vanadzor and the other programs to be
introduced. In some cases, as in Gyumri, it will make urban planning and
economic sense to add new buildings to sites where standing damaged
buildings are being reinforced.

[SPITAK]{.underline}

The status of Spitak's reconstruction reflects the initial planning
decision to focus attention on a New Spitak which would effectively
*replace* the existing city, which was substantially destroyed in the
earthquake. While Spitak was a much smaller city (approx. 20,000
population) as compared to Gyumri (230,000 pop.) and Vanadzor (172,000),
it incurred a greater *percentage* of losses, in all respects.

The New Spitak is predominantly low-rise structures resulting in much
lower densities (housing units per hectare) than in either Gyumri or
Vanadzor. Similarly, there are a significant amount of unfinished
housing units in Spitak, relatively speaking. Because of the lower
intensity (two story structures) in Spitak as opposed to, almost
universally, five story structures in the new regions of the other
cities, building practices employing *less* technology (cranes etc.)
suggest that Spitak's development may be able to benefit more from both
a wider universe of small builders with adequate capacity, and from
self-help inputs (i.e. from beneficiary families).

Because of far fewer mid-rise and high-rise buildings in Spitak,
reinforcement activities have comprised a smaller part of the total
recovery program. Most of the planned building reinforcements (again,
mostly five story structures) are either completed or in process. This
work should continue as a priority until all reinforcements are
complete.

The *community character* of the domics in Spitak is different than in
Gyumri and Vanadzor. Because Spitak was a much lower density settlement
to begin with, the domics are scattered in areas which previously were
single family or semi-detached low-rise (one and two story) housing,
most of it private. Viewed in another perspective, the *values* of the
previous residences (which have been supplanted in part or in total by
the domics) are *closer* in value (per square meter of land) than the
situations in Gyumri and Vanadzor, where domics cover more valuable land
plots because of the "urbanization" factor (based on their locations and
high level of infrastructure and public services in place). In old
Spitak, there was a pre-earthquake organization of land into private
land plots and houses, and the urban conditions (such as spacing between
structures) of domics are similar. The differences are in *quality*,
*not* quantity (density) of housing units. Many domics have a clearer
definition of territory and appurtenances and show a much higher
potential for benefiting from an *upgrading* program than in the other
cities. There is already evidence of domic upgrading, both through
individual resources and with municipal assistance, which has created a
much more permanent character than the haphazard patchwork witnessed in
Gyumri and Vanadzor.

This is not a universal solution, but should be considered as an
alternative. It will require careful urban planning and engineering
analyses to determine the practicality of conversion of these domics to
permanent shelter. The domics initially may be treated as *municipal
property*, such as the 204 emergency shelters which comprise what is
called the "Italian Village" in New Spitak (called so because they were
provided by the Government of Italy after the earthquake). These domics
have been subject to upgrades at *municipal expense* over the years
(such as addition of new truss roofs to prevent leaking) and are
functioning satisfactorily as shelter. Although it is recognized that
the other domic neighborhoods in old Spitak are not nearly as
homogeneous as the "Italian Village", a plan of design upgrade standards
could be developed to improve domics. This program could be implemented
as well under a small "home improvement" loan program with a "building
materials certificate" program, similar to the Home Purchase Certificate
(HPC) concept to be discussed in depth in Chapter 6 of this Report.
Eventually, units could be privatized and ownership titles issued for
both the building and associated land plots. In summary, it is
recommended that the New Housing Strategy consider retaining a portion
of the domics in Spitak in conjunction with an upgrading program for
both structures and sites.

[Domic Policies for Gyumri and Vanadzor]{.underline}

As stated, except for the case of Spitak (and perhaps scattered domics
located in villages), it is *not* practical nor desirable for domics to
be considered a potential source of *permanent* urban housing,
particularly in city centers. Some domic shells have metamorphosed over
the past decade into acceptable shelter (in some respects with distinct
advantages over the previous, pre-earthquake conditions). In other
isolated instances, self-help activities over the years have provided
even superior conditions to the previous housing situation. These are
exceptions and should not dictate more rational approaches to solutions
for a particular site of which a superior domic occupies just a small
portion. However, if these upgraded domics are otherwise not disruptive
to reconstruction efforts on a particular site, they may remain and
simply be placed in a lower category of priority, as the individual's
shelter needs are not critical. Eventually, these could potentially even
be privatized.

Of course, other considerations, besides impeding reconstruction
efforts, come into play when contemplating ultimate domic disposition.
Domics which occupy major and important public spaces within the city,
also should be slated for demolition and removal, but not as high a
priority as sites with immediate potential for immediate site
restoration (i.e. strengthening damaged structures or creating new
buildings).

The situation begs the question: *if* domics didn't litter almost every
old city site in Gyumri, *where* would be the prime areas for housing
construction? Needless to say, they are the very sites which are now
occupied by these domics. City planners should not allow temporary
issues, although difficult ones, to force decisions of a permanent
nature, that are fundamentally wrong in any sense of city planning.
Problems that are solvable in a few years should not overshadow
decisions which will have implications for a hundred years.

City planners may *prioritize* old city sites for restoration based on
the following criteria:

-   Site location: Access to *existing* infrastructure and city
    services, schools and other public services, etc.

-   Site potential: (lowest new investment /incremental cost per housing
    unit delivered): These include sites with existing unoccupied
    structures to be reinforced, i.e. brought into use with minimal
    cost; sites with reinforcements which *also* have adequate area for
    new construction (*concurrent* reinforcements with new construction,
    will provide efficiencies and economies of scale); sites which can
    safely *increase* densities from previous (pre-earthquake)
    conditions, etc.

-   Costs and other "tradeoffs" for displacing domics: All things being
    equal in respect to the first two categories above, sites with
    occupied domics in the worst conditions should take priority over
    sites where the average domic conditions are better, that is, where
    the latter could remain functioning in the present condition for a
    longer period of time.

-   Sites where domics' presence deprive city residents of important
    public places of civic value: An important public place, such as an
    central urban plaza or park, which is occupied by domics, also holds
    a high priority for clearance and restoration. However, whether
    these sites are as high a priority as the above depends on how
    disruptive they are to the city's functioning and urban fabric.
    These sites, when cleared of domics, will *not* alleviate the
    shelter crisis (there was no housing there before; no buildings to
    be strengthened, etc.). So, in matters of survival, it is difficult
    to give these sites as high a priority as the previous cases, in
    spite of the unpleasant image and the foregone recreation value.

> In some areas of the city, planners should take a good hard look at
> potential *conversion* of some previous (or even current) public
> spaces/green areas to higher density housing sites, regardless of
> whether they are occupied by domics or not. While this sounds callous,
> urban park sites and plazas, with a high level of infrastructure in
> place (water and sewer lines, etc.) and close to public services
> (transportation, schools, clinics, shopping, etc.) may be acceptable
> immediate solutions to addressing the most critical housing needs.
> There will have to be tradeoffs. Ultimately, policy makers must weigh
> values (abominable living conditions for *some* citizens versus loss
> in recreational opportunities for *many* *more* citizens). It is
> important, and would be assumed, in any case, that any lost public
> spaces would be returned in other locations in the future when housing
> conditions normalize, i.e. new parks and plazas in accordance with
> cultural design standards for the given population and distribution.
> In short, there is no clear recommendation to consume parks and open
> space to solve the housing problem, but city planners taking this
> enlightened approach should revisit the General Plans.

-   Acceptance by the citizens who occupy the site: Level of
    difficulties in removing domic dwellers must also come into play.
    Ideally, a plan for site clearance should be at least palatable to,
    if not embraced by citizens to be displaced, even if only
    temporarily. The most *compelling* and understandable reason (and
    simplest to explain) for domics to be cleared is to allow for
    mobilization of construction equipment and forces to get to work and
    commence as quickly and efficiently as possible to strengthen and
    restore buildings which once operated on the site. Everybody can
    relate to this. In most cases, even if a building is no longer
    standing, former residents can point out precisely where it stood,
    most of the time, the building "footprints" now hidden by domics.
    So, *readiness* for citizens to cooperate with the
    relocation/reconstruction programs (particularly when requiring them
    to surrender their domics in a wholesale clearance of an entire
    site), is also a factor to consider when selecting sites. In this
    sense, sites where a majority of domic dwellers will ultimately
    return to buildings on the site, may have an advantage.

[Strategies for clearing cities of domics]{.underline}

Building upon some of the issues raised in the previous section, a
strategy can be articulated for an organized approach for clearing sites
of domics. City planners must first develop a plan and sequence for an
orderly site-by site clearance of domics. This should be based, in part,
on logical criteria as enumerated above. Site visits and onsite
inspections of conditions should be conducted by experienced
planning/architectural and engineering professionals in order to
determine priority sites. Definitive boundaries must be designated for
each site depending upon the aforementioned criteria and the overall
construction program/budget. Once the site has been surveyed and
allocated for restoration, all domic dwellers within the boundaries must
be suitably notified, preferably in writing, that the site has been
selected as a priority for reconstruction, and in order for this
reconstruction to take place, it is necessary for all domics to be
removed by a certain date (3 months seems reasonable). The site
residents are then instructed to report to a nearby municipal office (a
domic or other space in the neighborhood could to be converted to the
local information office during this preparatory period). Once residents
register within, say, the first month of the three month preparatory
period (or simply reconfirm their domic residency as the case may be),
their status will be determined in accordance with the Waiting List, or
with other program criteria which may have been put into effect by then.

As an illustrative example, the [domic residents]{.underline} of a
particular site, may fall into the following general categories:

1.  Citizens who were duly registered (i.e. held "propiskas") to
    buildings which had been planned to be re-constructed or are still
    standing on the site and are to be reinforced. (The latter is the
    clearest situation, where a person can point to an apartment shell
    in a damaged building and say with no uncertainty: "that was our
    home". Although logical, this is not always the most equitable
    solution, if future housing allocation procedures are to be based
    more on "means tested" qualifications. In other words, because a
    family *had* occupied, as an official State tenant, a particular
    unit in a particular building on a particular site *before* the
    earthquake (and that building is being restored and redelivered for
    occupancy), does *not* necessarily mean that this family, at the
    time the unit is ready, is the *most qualified* to receive housing,
    particularly if based on a new means tested system. But, practically
    speaking, unless the family has already received a new housing unit
    to replace this one (because they qualified under another
    post-earthquake privileged category), it would be politically
    unacceptable to deprive the family of *their own home*.

> *While on this subject, however, there is a strategy which may be
> considered. If new buildings (not buildings which remained standing
> subject to strengthening) are to be constructed on a selected site,
> even if perhaps alongside pre-earthquake undamaged, or post-earthquake
> reinforced buildings, attempts should be made, where practical, not to
> replicate the building which once stood on the site. (This is
> [not]{.underline} meant in the structural sense or in regards to
> seismic-resistance). By a drastic change in building design:
> orientation, height (number of stories). architectural facade,
> apartment floor plans, etc. In short, by making the buildings as
> different as possible to what was there before, there will be less of
> a "family to unit" association, less of a perception of ownership, and
> therefore more opportunities for introduction of means-tested
> allocation procedures.*

2.  Citizens who did not reside (not hold a "propiska") in a building on
    the selected site, but who qualify for a unit based on their waiting
    list status or other program qualification criteria in effect at the
    time: While a domic household may be registered to receive a new
    unit in the future, the fact that the site has been selected by city
    planners to be "cleared and restored" may put them in a higher
    priority category (that is, they get a commitment to receive a unit
    in one of the buildings being constructed or reinforced on the
    respective site. In other words, *their* selection was directly
    related to the *site's* selection. Allocating them a unit in the new
    housing project makes sense as it will assure their *cooperation* in
    surrendering their domic and agreeing to the relocation program.
    Presumably, their obligation to contribute in some way (cash
    contribution, loan, etc.) to the cost recovery would be based on the
    broader means-tested program in effect at the time.

3.  Citizens who did not reside (not hold a propiska) in a building on
    the selected site, and do [not]{.underline} qualify for a unit under
    any program qualification criteria at the time: This household,
    presumably either "purchased" this domic (right to live in the
    domic), or received the right to occupy it from a previous owner
    (maybe even paying rent to someone). As is evidenced from the
    surveys, a large number of domics are not occupied by the original
    assignee. This creates a difficult situation. Possible solutions
    could include compensation for the "market value" or a predetermined
    system of depreciated value of the domic and associated building
    materials, or just a fixed fee (perhaps based on square meters or
    other measurable quantity): the simpler the better, keeping in mind
    that the domics in most cases, are technically not considered
    private property, but property of the State/municipality. Another
    option could be relocating the domic to another site designated as a
    staging area for temporary housing; although this may not be
    practical because the vast majority of domics, and their associated
    "appendages" are not readily movable without irreparable damage; and
    this approach really just relocates the problem to be faced again
    the future.

> *It should be recognized that there may be a new group of homeless
> created, that is, these families living, illegally perhaps, in domics,
> which are abruptly displaced through the domic clearing/building
> reconstruction program. Presumably, if socially vulnerable, they would
> qualify for a national program of housing allocation (i.e. not
> necessarily related to the earthquake) or family allowance. This will
> "weed out" the domic dwellers who have other options.*

[Temporary housing for domic residents in process of relocation to
permanent housing]{.underline}

A critical element for the success of the site restoration program is
the "bridge" from the domic to the permanent-housing unit. A careful
program should be designed to deal with this period. It is hoped that,
with all preparation, including financing, in place, a one-year period
would be adequate for residential buildings of the traditional scale
(4-5 stories) to be reinforced or new buildings to be constructed
alongside reinforced buildings on already serviced sites. A one-year
period is manageable and acceptable and the following options are
suggested:

1.  Informal Sponsorship: If the qualifying households receive a firm
    commitment in terms of a legal, binding, date-sensitive contract
    between the State and the family, then there may be some informal
    arrangements within Armenian society which present themselves. These
    may include finding shelter with relatives and friends (which would
    be more acceptable if all knew it would only be for a year, no
    more). The Survey and informal discussions with domic residents
    bears out the notion that families would find a way if they were
    "guaranteed" by contract that they would receive housing within a
    year.

> *These informal arrangements would obviously be the least costly to
> the State. A major public relations effort should be organized in
> conjunction with these one-year relocation programs to encourage
> family and friends to "adopt a family" for a year, if at all possible.
> The "sponsoring household" would need assurances that they would not
> ultimately assume responsibility for the relocated family and that all
> social benefits would continue to be provided to the "adopted" family
> during the co-habitation period. Perhaps additional benefits could be
> made available directly to the sponsoring household during the
> one-year period such as an \[additional\] allowance during that
> period. Other incentives could include tax breaks for households which
> sponsor these transitioning families. It is critical that the
> inaugural programs demonstrate success, in this aspect, actually
> re-house the transitioning families [in under a year]{.underline}. The
> response to assist will drop off if the State cannot meet its
> commitment.*

2.  Domic Relocation: Conceivably, some domics could be physically moved
    to new State/City managed "staging areas" (serviced sites) for the
    one year period only. This would at least get the domic off the site
    slated for construction. This will have very limited applications
    because of the "established" nature of domics (i.e. once one
    attempts to move the domic, the damage done and the cost to repair,
    transport and hook up to services at the new site exceeds the
    savings realized). Still, this may apply in *some* cases where a
    person is able to relocate the domic to a sponsoring family's lot
    ("1" above). A relative or friend living on an individual lot may be
    more amenable to adopting a household for a year if they bring their
    own shelter with them. This scenario may just require sharing a
    bathroom or kitchen for a year. This alternative, again, reduces
    costs to the State for the "bridge housing".

3.  Municipal Domics: Technically, the various municipalities own most
    of the domics. As citizens have received permanent housing, some
    domics have been surrendered to the City. Many of these are
    demolished or otherwise removed. With the aforementioned one-year
    transitional period being the issue, cities should attempt to
    accumulate an inventory of domics, even if scattered, in reasonable
    condition to be used as bridge housing. The municipality, as
    landlord, may incur all costs to maintain the domic. While, it is
    not the best solution, i.e. to move a family out of one domic into
    another one, if the "one year limit" is adhered to, this may be a
    viable solution.

4.  Provision of alternative temporary housing: Gyumri, as an example,
    is reported to have dormitories that could be made available for
    temporary housing. Each city may have their own limited residential
    space, or non-residential space, the latter which could be
    cost-effectively converted for temporary use for bridge housing. In
    the case of dormitories, or other available hotels or guesthouses,
    it would be reasonable for municipalities to mobilize the associated
    food service (cafeteria) which could be provided as part of the
    housing package or on a for pay basis. Again, this approach would
    minimize major capital costs for construction in order to shelter
    the transitioning families and maximize on existing municipal
    assets.

5.  Rent subsidy for privately owned units: It is reported that average
    rents for private (2-room) apartments in Gyumri range from \$20 to
    \$60 per month, depending on the location. The cost for one year
    would range from \$240 to \$720. Similarly, other cities have a
    rental market, which presents another alternative for temporary
    shelter. Cities could advertise for needed apartments based on
    guaranteed minimal one-year leases and bargain down below market
    rates because of their "buying power".

6.  Use of municipal apartments: Municipalities could set aside a
    certain amount of apartments for bridge housing from a) completed
    but, for whatever reasons, unallocated/uninhabited apartments in new
    city regions, presumably only those where "orders" have not yet been
    issued. (Otherwise, they are already privately owned and, if empty,
    may become available under "5." above); b) units which become
    available in reinforced buildings, formerly registered to families
    who have *already received* new housing. c) unfinished buildings to
    be completed and allocated for bridge housing. and d) only as a
    *last alternative*, constructing new housing which could serve as
    bridge housing initially and ultimately used for permanent social or
    market housing. In "b" and "c" as well, when the housing crisis
    starts to subside, these units ultimately could be allocated/sold as
    permanent housing.

> [Options which require major capital outlays on the part of the
> government should not be considered for bridge housing except as a
> last resort.]{.underline}

[Stimulating the Market: the Role of the Private Sector]{.underline}

Armenia has a long tradition of building and skilled labor. The former
State construction industry has been effectively privatized, although
many companies remain "joint stock" entities with substantial State
interests. Still, there is already a culture of entrepreneurial practice
within the building industry. There are no particular regulatory
barriers to prevent small private builders from competing in the
marketplace.

In all recommended urban development scenarios discussed above, there
will be "priority zones" for housing development in each city and there
will be other areas to be designated as "reserve" or "for future
development".

In *priority areas*, the State will likely clearly define building
programs: a) reinforcements, b) building completions (of unfinished
construction) and possibly c) new construction on sites which are
undergoing activities in "a" and/or "b" above. Building contracts for
reinforcements and completions will most likely be executed through
conventional procedures for bidding State projects (since the tasks are
quite specific). However, It is recommended that *new* construction in
priority zones be executed in whole or in part through an open
solicitation to private firms to submit proposals to be considered under
a competitive environment, either based on an approved set of plans
("project") or potentially on a "design-build" basis. Importantly, these
new projects would be eligible for housing purchase certificates
(including fixed price certificates).

As an example, State construction projects may be underway or planned on
a particular center city site where reinforcements and/or completions do
not either return a site to its former density (where housing existed
before the earthquake) *or*, on new sites, where the highest desirable
densities are not being achieved by the current/planned construction. By
carefully defining future building "envelopes" on these sites for
housing construction, presumably where infrastructure is *already in
place*, private building companies may submit proposals to execute
building projects where they sell units on the open market, the demand
which will be improved by the advent of HPC's. If a private builder
believes it can produce residential units for the designated HPC amounts
for 1, 2, 3 room apartments, etc. it may be inclined to invest on the
basis of this newly stimulated (by government intervention) real
effective demand. Of course, the lack of a system for
construction-period financing will be an obstacle to many potential
participants.

One solution to the lack of financing would be to "pre-sell" a certain
percentage of units (as in the former Soviet "cooperative" system where
upwards to 40% of the sales price is paid up front by buyers). The units
not pre-sold would be available to HPC holders. The State may want to
determine different market prices for "new construction" HPC's versus
"existing (older) housing" HPC's. Still, without some loan program in
place for construction-period financing, private firms' ability to
meeting the capital requirements will be difficult. The HPC Program
could, however, permit a portion of committed HPC funds to be paid *in
advance* to the qualifying, low-risk builder on behalf of the buyer
*only* upon execution of a binding "sales contract" between buyer (HPC
holder) and seller (the builder). The remaining HPC funds would be
released to the builder upon "closing" (transfer of the title to the new
owner upon completion).

Perhaps the greatest potential for the private sector to be creative and
exercise entrepreneurial skills will be in the "future development"
areas. While the municipalities must consider the ongoing costs of
providing public services to these areas, cities may want to adopt a
fairly liberal policy regarding these "non-priority" zones. In short,
every unfinished building, foundation and serviced building site would
be eligible for submission of a proposal by the private
builder/developer. The goal of the respective city would be
[not]{.underline} to maximize payments in advance for the *idle asset*
(in fact, it is expected that these objects may be provided at no cost
to the builder). The essence of the program would permit the builder to
benefit from the improvements already "in the ground" (in most cases,
these expenditures were "grants" provided by the former Soviet
republics). The builder would only need to cover the "incremental" costs
of bringing the building to completion. If a firm calculates that it
*can* do so (and presumably make a profit) within the current "market"
prices for housing (including through HPC's), then the builder would
prepare a formal offer in accordance with pre-established guidelines.

More attractive sites may be allocated through either a more
conventional auction process or perhaps through a "competition" where a
formal RFP (Request for Proposal) is generated by the city soliciting
proposals by the private sector. Unlike an auction, where price is the
main factor, a competition considers the overall package and benefit to
the city in achieving its identified objectives.

Importantly, a detailed "development agreement" must be negotiated and
executed with reasonable guarantees to both parties, the private builder
and the city government. In reality, the city has little to lose by
temporarily transferring the *right to complete* the unfinished
construction (foundation, several stories uncompleted, no roof, etc.) to
another party. At worst, the structure will continue to remain idle; but
chances are, it will be completed. Completion may not necessarily be
exactly in accordance with the project plan: a proposed five story
building with three stories completed may very well be finished as a
three story building, for example, if that is what it requires for an
immediate and sound economic solution, again considering that the
builder is not expected to pay for the \"in ground\" improvements at the
time of "take-over". Similarly, another example may be a proposal for
low density low-rise (one or two story) detached or semi-attached
housing on building "platforms" (serviced pads) even if intended for
much higher densities (per the GenPlan). While, this would not be a
cost-effective solution if starting from zero, it may be viable if only
incremental costs (and *no* land costs) are passed through to the new
builder and ultimately to the buyer. The key question: can units be
produced which will fall within the effective demand (including HPC's)?

With these types of approaches, the builder which offers the best
"package" to the city is the one to be awarded the "building right".
Some illustrative examples of the provisions which a city should be
looking for in a development agreement include:

-   [A \"compulsory build\" requirement]{.underline}. The builder could
    not just hold on to the property as an investment and sell the
    building right to another entity in the future (presumably as values
    increase). This would be an exclusive, non-transferable contract.

-   [A strict time limit within which the building(s) must be brought to
    completion]{.underline}. If the building is not completed within the
    permitted time limit, then the rights revert back to the city.
    Again, the risk to the city is low, as a building/site may be
    \"returned\" to a city, as a result of default on the part of the
    contract builder, which is much closer to completion than before;
    this *withou*t any additional investment by the city.

-   [Additional housing stock for distribution by the city in the EQZ
    program or as part of another social housing program.]{.underline}
    In the best cases, a builder's proposal could commit a predetermined
    number of housing units which will be provided at no cost to the
    city, in return for the builder's right to take over the unfinished
    construction site and sell units in the open market (including
    through HPC's). As an example, if a builder proposes to complete 100
    units of a unfinished structure in the "reserve" zone, and knows
    that by adding 10% to the ultimate incremental cost of completion,
    it can *still* produce units within *the marketable range* and still
    *realize a reasonable profit*, then the builder may be in a position
    to offer the city 10% of the completed units for its use in meeting
    EQ and other social housing obligations. It will be packages like
    this which will make one building proposal more attractive than
    another.

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-   [The cities, in turn, will need to create the most favorable
    conditions for the contract builder under these "incentive programs"
    to succeed]{.underline}. Incentives may include waiving certain
    fees, otherwise required during the building process (inspections,
    etc.), streamlining the review (bureaucratic) process and providing
    for the ability of the builder to contact *and* contract directly
    with HPC's holders. In fact, the city should serve as the
    facilitator in matching sellers and buyers on these projects. The
    city could regularly publish a list authorized projects and approved
    builders along with information as to where new housing will be
    produced within a given period, eligible or not for use with HPC's,
    etc. (It is expected that a similar "buyer-seller match" program
    would be in effect for the *resale market*, where HPC holders would
    be informed through official, frequently updated, city lists, as to
    units for-sale which are eligible for purchase using their HPC's).

> Like in the previous discussion, availability of construction-period
> financing for part of the incremental cost, perhaps with Central
> Government guarantees to banks, might produce reasonable interest
> rates and attractive terms for these special projects.

-   [Other public amenities or facilities (in addition to *or* in lieu
    of housing units for the city) which may be offered as "proffers"
    are also conceivable]{.underline}, *if* these proffers do not make
    the housing project unfeasible. Improvement of a section of road
    near the housing site, provision of utilities which will not only
    serve the subject housing site but other future sites, creation of a
    small park/recreation area for the residents, etc. are all
    possibilities. Obviously, the less attractive a building project is
    (remote location, absence of infrastructure, etc.) the fewer
    proffers will be offered.

In summary, cities must be open to the creativity of private,
profit-motivated entrepreneurs, permitting local Armenian firms to
"sharpen the pencil" and determine if profit can be made on some of the
more attractive unfinished construction sites. If this can be done,
[with little or no additional investment in capital
construction]{.underline} by the government, then the government should
[provide the incentives necessary]{.underline} for a demand-driven
solution, transferring the risk to the private side. At the same time,
while having realistic expectation, cities may receive *additional*
benefits at the end to help further solve the housing crisis.

4.2 Construction Industry Recommendations

The major thrust of the new housing strategy in the earthquake zone does
*not* place a high priority on new construction, but emphasizes
alternatives to new construction, i.e. use of "housing purchase
certificates" (including fixed price certificates) along with *targeted*
the existing waiting lists. Where construction activities are required,
these should be directed towards: a) building reinforcements (for
standing buildings which were damaged as a result of the earthquake);
and b) completion of the unfinished buildings of the highest level and
of the best quality, in regions with adequate infrastructure.

This Report advances the notion that, if the housing purchase
certificate program is implemented along with "a" and "b" above, then
new construction needed to solve the priority tasks in the EQZ will be
very limited (restricted to inner-city sites where there are other
reconstruction activities as discussed in the previous sections).

Therefore, a major effort to explore options for alternative shelter
provisions in terms of *construction-related* activities, including
reform of the construction industry, is *not* a critical element for the
earthquake zone in light of how the new *Housing Strategy* has unfolded
(the alternative shelter provisions take *different* forms). These
issues are more appropriately placed within a national context, and
therefore, it is anticipated that this will be part of the parallel
study also being executed through the Armenia Municipal Development
Project: *Armenia National Housing Policy Study.*

Still, the following thoughts are provided on conceptual *approaches* in
construction methods and industry practices which may result in cost
savings and lower cost housing solutions in the future, and are not
limited to the earthquake zone.

As a result of an analysis of the historic practices within the
construction industry, the following possible approaches may be
considered:

[State Construction Administration]{.underline}

-   The Government may wish to consider a special EQZ "Unified Owner"
    (UO) which will take a lead role in administration of all
    competitive bidding and contract administration within the Zone.

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-   The UO may consider procurement of some building materials and
    supplies, which will be employed in the specific housing projects
    (such as doors, windows, roof materials, floor finishes,
    bathroom/kitchen fixtures, etc.) as bulk purchasing in order to
    reduce unit costs. These materials would be "warehoused" and
    provided to the various projects for a pre-determined price as
    already established in the project "Scope of Work", within the
    contract "allowances" for the specific items. On State projects,
    this approach could save 35-40% on some items.

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-   State projects should be bid and administered in accordance to a
    "Scope of Work" approach, which will require submission of unit
    costs (square/cubic meters of various materials; quantities of
    materials, etc.) as opposed to "lump sum" bids). These "take-offs"
    as required as part of the bid estimation process could then be
    compared to State estimates for the same.

[Construction Industry/Practices]{.underline}

-   It is efficient to carry out construction on available sites in the
    EQZ cities using the principle of the mid-rise housing development.
    This option will provide housing of 4-5 story buildings which is
    relatively inexpensive and easily implemented. Construction of such
    buildings enables the involvement of the local labor force and
    better use of financial resources of the population through
    individual and cooperative construction projects. High-tech
    specialists are not needed to perform construction tasks.
    Construction can be performed using indigenous construction
    materials and the level of operational costs is not high.

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-   Most of the mid-rise buildings constructed in the EQZ during the
    last decade were monolithic, in response to the earthquake. These
    are extremely expensive solutions. More cost effective solutions,
    while still considering the seismic situation, are "monolithic
    frame" (or solid frame construction), where the framed columns are
    formed from monolithic pours on-site, and the filler walls are a
    combination of the native tuff stone with concrete adhesion. This is
    the method being used presently in the American Red Cross housing
    projects in Gyumri and Vanadzor.

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-   4-5 story "broad facade" buildings which are inexpensive and provide
    high density housing solutions, are also acceptable. These buildings
    help to increase the rational use of the site and improve the
    internal environment. The linear density of buildings increases
    which results in a housing density and site housing development
    level increase by 9-15%, depending on the number of stories. The
    thermal efficiency of the building substantially increases which
    results in the decrease of heating fuel by 8-9%. The costs of
    construction decrease by 8-11% depending on the reduction of the
    utility lines and increase of the linear density of the buildings.
    More roof space can be used for the installation of solar panels.

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-   "Mansard apartments" have great potential. The roofs of existing 4-5
    story residential buildings can be remodeled into mansard apartments
    which are less expensive and easily implemented. In this context,
    the existing damaged buildings in the center of the cities have
    great potential.

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-   Taking into account the above-mentioned recommendations, it should
    be mentioned that the industrial housing construction capacities
    [exist]{.underline} in Gyumri and Vanadzor and will provide a
    sufficient volume of construction at the initial stage. In
    particular, Vanadzor *Integrated Home Building Factory* and the
    Gyumri *Armenian Assembly of America Housing Components Factory*
    which are currently operable, are able to carry out construction of
    1-5 story residential buildings. The buildings of this type are
    relatively inexpensive and enable solutions to urban development
    problems.

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-   A number of specialized private construction enterprises are
    functioning in the earthquake zone. They are capable of carrying out
    construction activities of the needed volumes. In order to
    efficiently carry out construction in the earthquake zone,
    production of inexpensive and high quality construction materials
    using simplified technologies and light materials will be desirable.
    The design base for this production exists.

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-   Finally, where it becomes practical to develop low-density
    solutions, such as single-family detached or semi-detached (i.e.
    duplex) units on serviced land, approaches such as the successfully
    implemented UNHCR's "Shelter" Program in Armenia should be
    considered. These duplex homes built on individual lots in the
    communities of Echmiadzin, Masis and Charentsavan were produced for
    about \$3,000 per unit. They have expandable floor plans and so lend
    well to the "incremental housing" concept. This approach may even be
    considered for the "reserve areas" in Gyumri and Vanadzor and in the
    New Spitak, but only where sites may be easily provided with the
    necessary infrastructure.

**Chapter 5**

**SOCIAL PLANNING STRATEGY COMPONENTS**

1.  **Analysis of\
    and Recommendations for\
    Housing Allocation Procedures and Waiting List**

2.  **Case Studies**

# **5.1. ANALYSIS OF AND RECOMMENDATIONS FOR HOUSING ALLOCATION PROCEDURES AND WAITING LISTS**

According to local statistics for the cities of Gyumri, Vanadzor and
Spitak, about 19,500 families, which lost their housing in the
earthquake, are currently assigned to the "waiting lists" as compared
with 14,500 families which lost their homes and have been provided with
new units since 1989.

##  ***[Background of the waiting lists' policy and administration]{.underline}***

The system of housing "waiting lists" was inherited from the Soviet
practice of provision of social housing according to one's place in
line, according to a family's "underhoused" status (less the 9 square
meters per household member) and/or assignment to a certain privileged
category. Among the latter, people honored by the Soviet State, such as
invalids of the "Great Patriotic War" (the Second World War) received
top priority. With respect to demographic policy, large families and
families with twins were given privileged status. Socially vulnerable
groups such as families with disabled children were also assigned
privileged categories. In addition, health issues mattered. (For
example, a person with a contagious form of tuberculoses had to be given
a separate room regardless of the other conditions).

Waiting Lists were administrated both by local authorities and
enterprises, the latter which had their own construction programs for
employees.

## ***[Today's Practices]{.underline}***

Oddly, it appears that three *different* Government Decisions, each with
varying priorities based on political considerations and differences in
values, *simultaneously* regulate the formation and maintenance of
waiting lists in the EQZ. Two of them were issued under Soviet power,
and the third Decision was developed after the creation of the
independent Republic of Armenia. Local authorities in Vanadzor primarily
follow the earliest Decision; local authorities in Gyumri have developed
the City's waiting list according to the most recent Decision while
local authorities in Spitak use all three documents, choosing the
appropriate paragraph to justify decisions based primarily on the
administration's perception of social justice and common sense.

***[The legal basis: Rules and regulations of formation of the waiting
lists in the EQZ]{.underline}*.**

The *Decision of the Council of Ministers of the Armenian Soviet
Republic and Armenian Council of Labor Unions \# 371* of July 25,1989
introduced special rules and regulations for the provision of social
housing in the EQZ. That Decision *supplanted* the former waiting lists
for "underhoused" families and families of privileged status. Instead,
families which lost their homes in the earthquake, including those who
temporarily lived in other places, became eligible for social housing.
Armenian refugees from Azerbaijan, who moved to the EQZ to participate
and potentially benefit in its reconstruction, were placed behind the
earthquake victims on the waiting lists.

After the earthquake, 13 privileged categories were identified (see
Annex 2.1). Top priorities were given to people who lost a family member
in the earthquake or became disabled in the earthquake and to large
families with three or more children under 16 years of age. One category
could include several social groups. (For example, single mothers and
families with children adopted from orphanages were assigned to the same
Category 11).

In particular, *Decision #371* paid particular tribute to "human-factor
disasters" (i.e. disaster with a human factor, for example, invalids of
the first order due to the earthquake and orphans due to the earthquake)
and encouraged increased birth rates and population growth in the EQZ.

The *Decision of the Council of Ministers of the Armenian Soviet
Republic and the Armenian Council of Labor Unions \# 90* of February
23,1990, responding to the suggestions of the Council of Peoples'
Deputies in Leninakan (today Gyumri), developed another list of 18
privileged categories (see Annex 2.2). As opposed to the former rules,
*Decision #90* gave top priority to war invalids. It moved people who
lost a family member in the earthquake from first to eighth place;
people who became disabled in the earthquake from first to fifth place;
and large families from second to tenth place. *Decision \# 90*
maintained the principle of assigning different social groups to the
same category. Single mothers were assigned to the 6th category together
with families with a member disabled from childhood along with single
senior citizens.

By *Decision \# 90*, relative priorities of humanitarian and demographic
origin, were replaced to a large extent by Soviet-type criteria which
honored people having performed a special service to the State.

By *Decision of RA Government #147* of March 7, 1992, a more
sophisticated waiting list of 30 privileged categories was introduced
(see Annex 2.3). Top priorities were given to earthquake invalids of
first order and war invalids of first order. The criteria, implicitly
incorporated into this waiting list, surface as the following:

1.  with respect to "human-factor disasters";

2.  with respect to the service to the Soviet State (for example,
    disabled participants of the Great Patriotic War and other USSR
    military actions abroad);

3.  with respect to the service to the Republic of Armenia (for example,
    families of soldiers killed defending the RA);

4.  with respect to demographic policy, encouraging higher birth rates
    (for example, large families);

5.  with respect to labor-related merits, including disabilities due to
    trauma at the work place (for example, invalids);

6.  with respect to social policy, protecting socially vulnerable groups
    (for example, families with disabled children) and with respect to
    health policy.

**Table 5.1** illustrates the distribution of privileges according to
the above-mentioned criteria.

### Table 5.1

### Distribution of privileged categories by Decision \# 147

+-------------------------+--------------------------------------------+
| #### CRITERIA           | #### RANK OF PRIVILEGED CATEGORIES         |
+-------------------------+--------------------------------------------+
| **Human-factor          | 1, 6, 11, 15                               |
| disaster**              |                                            |
+-------------------------+--------------------------------------------+
| **Service to the Soviet | 2, 4, 12, 14, 20, 21, 22, 23, 24, 26, 27   |
| State**                 |                                            |
+-------------------------+--------------------------------------------+
| **Service to the        | 18, 24, 25, 19                             |
| Republic of Armenia**   |                                            |
+-------------------------+--------------------------------------------+
| **Encouragement of      | 7, 9, 10, 17, 28                           |
| higher birth rate and   |                                            |
| other demographic       |                                            |
| issues**                |                                            |
+-------------------------+--------------------------------------------+
| **Labor merits**        | 5, 13, 22,29                               |
+-------------------------+--------------------------------------------+
| **Social protection and | 3, 8, 16                                   |
| health issues**         |                                            |
+-------------------------+--------------------------------------------+

All three Government Decisions declared the goal of achieving social
justice in provision of social housing. It was presumed that the waiting
list should protect the interests of the earthquake victims who suffered
the most and lost their family members in the earthquake, and socially
vulnerable groups.

However, to a large extent [privileges were assigned to people with
special service to the State]{.underline} (surprisingly, by *Decision \#
147*, recognition of the merits to the Soviet state surpasses the
recognition of the merits to the Republic of Armenia).

Among the socially vulnerable groups, a similar hierarchy was
established.

Generally, disabilities are classified according to three groups
according to the level of inability to work in both the Soviet and
Armenian social insurance systems (basically, the first non-working
group includes handicapped by movement, sight, etc.). The provision of
social housing to disability appears conditional to the *reason* for
invalidity. War invalids are more privileged than labor invalids. People
disabled by crime or non-workplace related accident were not given a
privileged status.

To conclude, **Table 5.2** illustrates the changes of priorities for
social housing policy with regard to different groups of earthquake
victims.

### Table 5.2 

### *Privileged ranks assigned to social groups* 

+---------------------------------+-----------+-----------+-----------+
| #### MAJOR GROUPS               | **P       |           |           |
|                                 | RIVILEGED |           |           |
|                                 | CATEGORY  |           |           |
|                                 | ASSIGNED  |           |           |
|                                 | BY THE    |           |           |
|                                 | D         |           |           |
|                                 | ECISION** |           |           |
+---------------------------------+-----------+-----------+-----------+
|                                 | **\# 371  | **\# 90   | **\#      |
|                                 | (1989)**  | (1990)**  | 14        |
|                                 |           |           | 7(1992)** |
+---------------------------------+-----------+-----------+-----------+
| ##### With respe                |           |           |           |
| ct to the human-factor disaster |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Invalids due to the earthquake: | 1         | 5         | 1         |
|                                 |           |           |           |
| \- of first order               | 1         | 7         | 11        |
|                                 |           |           |           |
| \- of second order              |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Orphans due to the earthquake   | 1         | 2         | 6         |
+---------------------------------+-----------+-----------+-----------+
| Families with a member who died | 1         | 8         | 15        |
| in the earthquake               |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Families with adopted orphans   | 11        | 3         | 10        |
+---------------------------------+-----------+-----------+-----------+
| ##### Wit                       |           |           |           |
| h respect to demographic issues |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Families with at least three    | 2         | 10        | 7         |
| children under 16 years old     |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Single mothers                  | 11        | 6         | 9         |
+---------------------------------+-----------+-----------+-----------+
| ***With respect to services to  |           |           |           |
| the Soviet State***             |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| War invalids                    | 3         | 1         | 2         |
|                                 |           |           |           |
| \- of first order               | 3         | 7         | 12        |
|                                 |           |           |           |
| \- of second order              |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Labor invalids                  | 7         | 4         | 5         |
|                                 |           |           |           |
| \- of first order               | 7         | 7         | 13        |
|                                 |           |           |           |
| \- of second order              |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| ##### Wi                        |           |           |           |
| th respect to social protection |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Families with disabled          | \-        | 6         | 3         |
| children.                       |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Single senior citizens.         | \-        | 6         | \-        |
+---------------------------------+-----------+-----------+-----------+

*[**Administrative Issues**]{.underline}*

Departments for housing distribution within the local administrations
are responsible for maintenance of waiting lists and recommend the
families which are eligible for a new housing unit. Prior to acquisition
of units by beneficiaries, documentation dealing with their rank in the
waiting list is clarified. The local Committee for provision of housing
chaired by a mayor makes the final decisions.

***Registration to the waiting lists. Provision of social housing**.*

######## GYUMRI

During 1992-1994, the Gyumri city administration monitored families'
registration and assignment to waiting lists in accordance with
*Decision \# 147.* Only families

who lost their homes in the earthquake were registered[^12]. According
to the local authorities, starting with the end of 1994, the waiting
list was *not* updated. The family's assignment to the category could
not be changed due to emergence of new factors. (For example, the fact
that the number of children in the family increased from two in 1993 to
four in 1995 would *not* move this family into category 7. According to
local authorities in Gyumri, about **16,000 families** (14,686 families
in the Government Program statistics) are on the waiting list. This
compares with **27,020 families** in Gyumri which lost units in the
earthquake

By the beginning of 1998, families of the first 8 categories were
reported to have received new housing units within Governmental housing
programs. In addition to category-based distribution, there have been
other ways to obtain housing such as receiving housing through one's
enterprise. **Table 3.3** illustrates the distribution of social
housing.

### Table 3.3

######### Distribution of Residential Units According to the Privileges, 1990 -- 1997

<table>
<colgroup>
<col style="width: 20%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td><p id="privilege" class="heading">Privilege</p></td>
<td>1989</td>
<td>1990</td>
<td>1991</td>
<td>1992</td>
<td>1993</td>
<td>1994</td>
<td>1995</td>
<td>1996</td>
<td>1997</td>
<td>1998</td>
<td>Total</td>
</tr>
<tr class="even">
<td>1</td>
<td>0</td>
<td>57</td>
<td>10</td>
<td>2</td>
<td>0</td>
<td>2</td>
<td>2</td>
<td>0</td>
<td>1</td>
<td>0</td>
<td>74</td>
</tr>
<tr class="odd">
<td>2</td>
<td>0</td>
<td>25</td>
<td>15</td>
<td>8</td>
<td>3</td>
<td>4</td>
<td>1</td>
<td>0</td>
<td>4</td>
<td>0</td>
<td>60</td>
</tr>
<tr class="even">
<td>3</td>
<td>0</td>
<td>217</td>
<td>193</td>
<td>86</td>
<td>58</td>
<td>91</td>
<td>82</td>
<td>12</td>
<td>35</td>
<td>13</td>
<td>787</td>
</tr>
<tr class="odd">
<td>4</td>
<td>0</td>
<td>3</td>
<td>5</td>
<td>0</td>
<td>0</td>
<td>1</td>
<td>2</td>
<td>0</td>
<td>1</td>
<td>2</td>
<td>14</td>
</tr>
<tr class="even">
<td>5</td>
<td>0</td>
<td>137</td>
<td>119</td>
<td>80</td>
<td>70</td>
<td>78</td>
<td>72</td>
<td>2</td>
<td>24</td>
<td>9</td>
<td>591</td>
</tr>
<tr class="odd">
<td>6</td>
<td>11</td>
<td>123</td>
<td>104</td>
<td>30</td>
<td>12</td>
<td>25</td>
<td>15</td>
<td>2</td>
<td>13</td>
<td>5</td>
<td>340</td>
</tr>
<tr class="even">
<td>7</td>
<td>0</td>
<td>827</td>
<td>1046</td>
<td>327</td>
<td>144</td>
<td>246</td>
<td>371</td>
<td>54</td>
<td>121</td>
<td>25</td>
<td>3,107</td>
</tr>
<tr class="odd">
<td>8</td>
<td>0</td>
<td>2</td>
<td>85</td>
<td>73</td>
<td>11</td>
<td>42</td>
<td>36</td>
<td>5</td>
<td>8</td>
<td>0</td>
<td>262</td>
</tr>
<tr class="even">
<td>builders (1)</td>
<td>0</td>
<td>216</td>
<td>573</td>
<td>216</td>
<td>79</td>
<td>106</td>
<td>91</td>
<td>64</td>
<td>0</td>
<td>0</td>
<td>1,345</td>
</tr>
<tr class="odd">
<td>pre-designated (2)</td>
<td>0</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>120</td>
<td>133</td>
<td>354</td>
<td>0</td>
<td>607</td>
</tr>
<tr class="even">
<td>co-operative</td>
<td>0</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>81</td>
<td>48</td>
<td>0</td>
<td>129</td>
</tr>
<tr class="odd">
<td>by private means, by sale, dormitories, court decisions, mansard
attics, died in Karabakh.</td>
<td>-</td>
<td>77</td>
<td>105</td>
<td>131</td>
<td>32</td>
<td>37</td>
<td>10</td>
<td>69</td>
<td>44</td>
<td>0</td>
<td></td>
</tr>
<tr class="even">
<td>Total:</td>
<td>11</td>
<td>1684</td>
<td>2255</td>
<td>953</td>
<td>409</td>
<td>632</td>
<td>748</td>
<td>422</td>
<td>653</td>
<td>54</td>
<td>7,821</td>
</tr>
</tbody>
</table>

Notes to table 3.3: (1) there was an agreement that 10% of newly
constructed buildings would be distributed to the builder community; (2)
Dwellers are tied to specific residential buildings.

Certain buildings (totalling 313 units) are [not]{.underline} included
in the computer list. Also, there are no data in the computer concerning
the housing at the Gyumri Airport and the Eighth Military Quarter.

Totally, through the first half of 1998 the number of delivered
residential units have mounted to 8,134 (7821 +313) among which 825 are
from the building strengthening zones. Thus in total, 8,134 Gyumri
families have been provided with new units.

######## SPITAK

Political developments at the local level have had a considerable impact
on the formation of the waiting list. In 1996, the first free elections
for local government led to changes in the local administration. New
administrators found that there were only 610 families on the waiting
list; the waiting lists developed shortly after the earthquake had been
partially lost; and in part, were forgotten in the archives. A call for
*re-registration* was publicized. As a result, **3,653 families** came
to register in 1996. By *Decision \# 147*, **1,664 families** were
assigned to privileged categories ranking from first to fifteenth. In
addition, **1,341 former owners** were on the waiting list for subsidies
or credits to *finish* renovation of their own houses. Among them, **800
families** confirmed their continuing need in 1996.

[Compared with 2,695 families which lost their units in the earthquake,
it appears that the number of families registered in the waiting list
surpasses the number of families which lost housing in
1988.]{.underline}

In actual provision of social housing, the Spitak city administration
also refers to other legal documents. For example, all war veterans
received units, and those decisions were justified by a reference to
*Decision \# 90*. The actual provision of social housing is illustrated
by the waiting list for distribution of 36 apartments expected in 1998
(**Table 4**).

## Table 4.4

***The 1998 top waiting list in Spitak***

+-----------------------------------+-----------------------+----------+
| #                                 | **Justification by    | **Rank   |
| ### Rank in the 1998 waiting list | the city              | by       |
|                                   | administration**      | Decision |
|                                   |                       | #147**   |
+-----------------------------------+-----------------------+----------+
| 1.Family of a participant of the  | Decision \# 90        | 26       |
| Great Patriotic War (in fact, he  |                       |          |
| died, but the family maintained   |                       |          |
| the place on the waiting list)    |                       |          |
+-----------------------------------+-----------------------+----------+
| 2\. Families with invalids of     | Decision \# 147       | 1        |
| first order due to the            |                       |          |
| earthquake.                       |                       |          |
+-----------------------------------+-----------------------+----------+
| 3\. Invalids of Great Patriotic   | All eligible families | 2        |
| War                               | received the units    |          |
+-----------------------------------+-----------------------+----------+
| 4\. Families with disabled        | Decision \# 147       | 3        |
| children                          |                       |          |
+-----------------------------------+-----------------------+----------+
| 5\. Military invalids of first    | Moved back in         | 4        |
| order                             | accordance to         |          |
|                                   | Decision \# 371       |          |
+-----------------------------------+-----------------------+----------+
| 6\. Labor invalids of first order | Moved back in         | 5        |
|                                   | accordance to         |          |
|                                   | Decision \# 371       |          |
+-----------------------------------+-----------------------+----------+
| 7\. Orphans                       | Decision \# 147       | 6        |
+-----------------------------------+-----------------------+----------+
| 8\. Large families                | Decision \# 147       | 7        |
+-----------------------------------+-----------------------+----------+

Since the earthquake, **971 families** which lost their housing received
new units, along with 54 families of refugees. (**1,025 families** in
total).

# *[VANADZOR]{.underline}*

Vanadzor is the only city where the local authorities reported providing
social housing to other groups in addition to earthquake displaced. Five
waiting lists co-exist and are annually renewed. The waiting list for
families who lost their housing in the earthquake has been developed
according to *Decision \# 371*. As opposed to Spitak, social housing is
not provided only to replace the losses in the earthquake, but in order
to meet *current* needs of a families. For example, the family which
occupied one apartment before the earthquake, may be eligible for
*three* units as a result of enlarged size. Because of this, the number
of families on the waiting list *increased* in 1997 comparatively with
1996. **Table 5.5** illustrates the changes to the waiting list.

***Table 5.5***

***The waiting lists for families lost their housing in the EQ in
Vanadzor***

<table>
<colgroup>
<col style="width: 16%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td><h4 id="year">Year</h4></td>
<td>1990</td>
<td>1991</td>
<td>1992</td>
<td>1993</td>
<td>1994</td>
<td>1995</td>
<td>1996</td>
<td>1997</td>
<td>1998</td>
</tr>
<tr class="even">
<td><strong>Number of families</strong></td>
<td>5015</td>
<td>2989</td>
<td>2759</td>
<td>2289</td>
<td>2059</td>
<td>1756</td>
<td>1731</td>
<td>1750</td>
<td>1289</td>
</tr>
</tbody>
</table>

Other waiting lists are developed according to different Decisions of
the Government of the RA: (1) for war invalids, (2) for participants in
military actions to defend the RA (Karabakh), (3) for "underhoused"
families, and (4) for teachers. They currently include 78 families
within the waiting lists \# 1, 2 and 3; and 93 families on #4, the
teachers' waiting list. [In total, **1,460 families** in Vanadzor are on
different waiting lists.]{.underline} Among them, **1,289 families**
lost their housing in the earthquake. (To compare, in 1988, 8,504
families lost their units).

According to the local administration, 90% of units is distributed
according to the earthquake victims' waiting list, and the rest - to the
GPW and Karabakh veterans, "underhoused" families and teachers.

# **A TALE OF TWO CITIES**

The vast majority of multifamily housing in the EQZ is concentrated in
the cities of Vanadzor and Gyumri. Data collected indicate that during
the last 10 years, the cities pursued somewhat different housing
policies, which has had certain consequences in the characteristics of
current problems, including public perception. Social, economic and
demographic backgrounds were also quite different. This should be
carefully examined when formulating the new housing policy for the EQZ.
**Table 6.6** provides the necessary data.

### Table 6.6

Comparison of Gyumri and Vanadzor Housing Characteristics and Attitudes

  ------------------------------------------ -------------- --------------
  **INDICATOR**                              **GUMRI**      **VANADZOR**

  **Total space per capita in the city (sq.  9.9            13.5\*
  m.)**                                                     

  **% of national average for urban areas**  70             97

  **DOMIC INHABITANTS**                                     

  Age of head of household (years)           48.8           43.9

  Female primary breadwinners (%)            26.2           46.4

  Domics in perceived "ownership" (%)        64.5           26.1

  Space per capita (sq. m.)                  9.1            7.8

  Actually lost home in earthquake (%)       89.8           50

  Own other house/apartment and/or land (%)  6.7            33.9

  Believe government should cover 90-100 %   57.1           41.6
  home purchase                                             

  Average government payment to move (\$)    6,000          3,500

  Consider staying in domic with upgrades    24.2           21.8

  Move if State provided help with down      30.2           38.2
  payment                                                   

  **BENEFICIARIES**                                         

  Returned previous domic to state/sold it   31.9 / 6.6     19 / 14.3
  (%)                                                       

  Household member was on the waiting list   82             76
  prior to unit allocation                                  
  ------------------------------------------ -------------- --------------

\*Data for urban population in Lori Marz

The above table indicates that there is basically no need for the
physical increase in the *volume* of housing area. Most people in domic
communities are there *not* because they do not have another place to
live nor other options to solve their housing problem. The domic segment
of the housing sector is integrated with the city and apparently with
the regional real estate market (degree of land ownership). In fact
domics are occupied by at least three different groups:

\- households which lost homes in the earthquake;

\- young families from overcrowded housing in the permanent stock;

-   migrants from rural areas who did not get jobs or lost their jobs
    after a short period in the city.

-   

The Vanadzor municipality, during recent years, had even been
[distributing]{.underline} vacant domics to young families from
overcrowded flats (until they ran out of vacant domics).

The above table indicates that Vanadzor's population is younger and

more market-oriented. Despite the fact that the average quality for
domic housing in Vanadzor (including space per capita indicator), is
less than in Gyumri, households have more realistic expectations of
government obligations. More people would agree to cooperate with the
government in the solution of their housing problems for a less amount
of government subsidy.

Despite the fact that the share of domics in *perceived* ownership in
Vanadzor is about three times less than in Gyumri, *more* beneficiaries
in the latter city return their domics to the State.

On the other hand, the situation in Vanadzor demands more urgent changes
in housing allocation procedures (half of domic dwellers are not
earthquake victims, a significant portion of allocated units are vacant,
etc.). If a *phased* (or *pilot*) strategy is used to implement the new
housing policy, then Vanadzor may be a good place to start.

***[Effectiveness of housing allocation and the waiting
lists]{.underline}**.*

The very essence of registration and management of waiting lists
questions their effectiveness. Some households may obtain new housing
outside the realm of governmental programs, but remain on waiting lists,
while other households may be excluded from the eligible privileged
category from the very beginning. As has been shown, waiting lists for
earthquake victims established in accordance with three Government
Decisions vary greatly in their priorities. Because of their
simultaneous enforcement, a family with the same characteristics may be
considered eligible for priority social housing in Vanadzor, and
non-eligible in Gyumri.

The situation is complicated by differences in the administration of
waiting lists in different cities. In Gyumri, waiting lists were
reported to be "frozen" in 1994. In contrast, in Vanadzor, changes in
family size, etc., could lead to obtaining more privileges. In Vanadzor,
the enlarged family may receive two or three units to replace one unit
lost in the earthquake. The same policy is considered inappropriate by
Spitak authorities.

To conclude, the actual distribution of housing units differs from the
official rules stated by *Decision \# 147* which was intended to replace
former regulations. There are several semi-legal routes to obtain social
housing for families who did *not* lost their units in the earthquake.
For example, *Decision \# 90* did not appeal the general rules for the
provision of social housing as established by *Decision \# 371*.
[Nevertheless, it did *not* explicitly repeat the imperative of
eligibility comditional upon *housing loss in the earthquake*. Referring
to its statement "suffered in the earthquake]{.underline} \[*not* to
families which lost their homes in the Earthquake\] housing should be
provided first to\...", local authorities could include in waiting lists
families within privileged categories regardless of their housing losses
due to the earthquake.

With regard to these administrative issues, findings of the UI/CPA
Survey ("Survey") in regards to waiting lists seem to be less
surprising. The Survey of domic residents shows that the number of
households which stated that they lost their homes in the earthquake
(about 82%) is twice as large as the number of households that have at
least one member on the waiting list (about 42%). Among the latter, over
70% of the respondents does *not* know their category.

This survey of *beneficiary* households shows that 80% of the
respondents who have obtained new housing units had a member who was on
the waiting list. Among them, only 80% attributed their acquisition of a
unit to the waiting list. About 10% of residents were neither on the
waiting list themselves, nor did they buy the unit from original
occupants who were in the waiting list. The conclusions are summarized
in the **Table 5.7**.

### Table 5.7

***Provision of social housing and waiting lists in the*** EQZ

+---------------------------+-----------+---------+---------+---------+
| #### Indicators           | *         | **Van   | **S     | **      |
|                           | *Gyumri** | adzor** | pitak** | Total** |
+---------------------------+-----------+---------+---------+---------+
|                           |           |         |         |         |
+---------------------------+-----------+---------+---------+---------+
| 1\. [Population,          | 230,000   | 174,000 | 21,500  | 425,500 |
| people]{.underline}:      |           |         |         |         |
|                           | 200,000   | 130,000 | 21,500  | 351,500 |
| 1.1. official data        |           |         |         |         |
|                           |           |         |         |         |
| 1.2. estimated data       |           |         |         |         |
|                           |           |         |         |         |
| (by local authorities;    |           |         |         |         |
| with regard to            |           |         |         |         |
| emigration, and birth and |           |         |         |         |
| mortality rates)          |           |         |         |         |
+---------------------------+-----------+---------+---------+---------+
| 2\. [Domics]{.underline}  | 17,050    | 7,704   | 5,191   | 29,950  |
|                           |           |         |         |         |
| 2.1. in total             | 16,000    | 4,2     | 3,300   | 23,600  |
|                           |           | 67[^14] |         |         |
| 2.2. inhabited, (by local | 11,000    |         | 3,300   | 18,600  |
| authorities               |           | 4,200   |         |         |
| assessment)[^13]          |           |         |         |         |
|                           |           |         |         |         |
| 2.3. inhabited, by expert |           |         |         |         |
| estimates                 |           |         |         |         |
+---------------------------+-----------+---------+---------+---------+
| 3\. Families which lost   | 27,020    | 8,504   | 2,695   | 38,219  |
| housing in the Earthquake |           |         |         |         |
| (according to Gov.        |           |         |         |         |
| Program estimates)        |           |         |         |         |
+---------------------------+-----------+---------+---------+---------+
| 4\. [Families on the      | 14,686    | 1,460   | 3,6     | **1     |
| waiting                   |           |         | 53[^15] | 9,799** |
| lists]{.underline}        | no data   | 1,289   |         |         |
|                           |           |         | 3,653   | **n/d** |
| 4.1. total                | 14,686    | 1,052   |         |         |
|                           |           |         | 3,025   | **1     |
| 4.2. lost housing in the  |           |         |         | 8,763** |
| EQ                        |           |         |         |         |
|                           |           |         |         |         |
| by Gov. Program estimates |           |         |         |         |
+---------------------------+-----------+---------+---------+---------+
| 5\. [Families provided    | 8,134     | 5,232   | 1,025   | **1     |
| with new units since      |           |         |         | 4,391** |
| 1989]{.underline}         | no data   | n/d     | 971     |         |
|                           |           |         |         | **n/d** |
| 5.1. in total             |           |         |         |         |
|                           |           |         |         |         |
| 5.2. lost housing in the  |           |         |         |         |
| earthquake                |           |         |         |         |
+---------------------------+-----------+---------+---------+---------+
| 6\. Families on the WL /  | **54.3%** | **      | *       | **      |
| families lost housing, %  |           | 17.4%** | *135%** | 51,8%** |
+---------------------------+-----------+---------+---------+---------+
| 7\. Families received     | **30.4**  | *       | **38**  | **      |
| units / families lost     |           | *61.5** |         | 37,6%** |
| housing in earthquake, %  |           |         |         |         |
+---------------------------+-----------+---------+---------+---------+
| 8\. Empty apartments in   | 7-8%      | n/d     | n/d     | n/d     |
| new                       |           |         |         |         |
|                           |           |         |         |         |
| housing, %                |           |         |         |         |
+---------------------------+-----------+---------+---------+---------+
| 9\. Housing stock per     | 9.9       | 13      | 4.5     | \-      |
| capita, sq. m.            |           |         |         |         |
+---------------------------+-----------+---------+---------+---------+

Surprisingly, the number of families which lost their homes in the
earthquake is *not* equal to the number of families which have received
new units *plus* the number of families on the waiting lists. The former
is higher in Gyumri and Vanadzor, and lower in Spitak. With respect to
the provision of housing, Vanadzor seems to be is *relatively* better
off than other cities.

######## Discrepancy in Figures: Families living in domics and waiting lists

######## 

######## *Initial statistical data and their validity are strongly connected with the provision of housing. The research process has encountered discrepancies in figures, depending on the source, as summarized in Table 5.8.* 

***[Transparency issues]{.underline}***

Controls over the provision and maintenance of social housing is rather
weak. Only the latest waiting lists are available. No local
administration keeps track of the number of families within privileged
categories on the waiting list, and the corresponding distribution of
units since the earthquake. (However, by observation, the Spitak
Administration's system of distribution seems to be more transparent
than others)

There are no independent commissions for conflict resolution. Families
must file a complaint to the same entity which has made the decision
being contested.

Decisions of local Housing Commissions are not publicized through local
media.

***[Poverty issues]{.underline}***

One should emphasize that waiting lists were originally designed for a
rather homogeneous society, in economic terms, than is today's Armenian
society. Presuming that households did not vary considerably in terms of
income distribution, the category/type system of assigning new housing
considered other ideological and social factors as a basis for obtaining
privileges, and never targeted low-income households. The poorest have
not been targeted to be first in line for new housing.

However today, policymakers, designing housing programs, [need to take
poverty and inequality issues into account]{.underline}. Since the
beginning of the 1990s, a majority of Armenian households have faced a
dramatic decrease of real incomes and quality of life while a few have
become more wealthy. According to the National Household's Survey in
1996, median expenditures were 9,900 drams per capita per month, and
median per capita incomes were 5,000 drams (as compared with the
national poverty line of 10,785 drams or about \$25).

According to a 1996 survey, poverty incidence in the EQZ was similar to
nationwide poverty indicators (**Table 5.9**).

### Table 5.9 

### Poverty incidence 

+-------------+-------------+-------------+-------------+-------------+
| **Types**   | *           |             | ####        |             |
|             | *Earthquake |             | Nation-wide |             |
|             | zone**      |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
|             | urban       | rural       | urban       | rural       |
+-------------+-------------+-------------+-------------+-------------+
| non-poor    | 37.4        | 50.9        | 41.2        | 52.0        |
+-------------+-------------+-------------+-------------+-------------+
| Poor        | 29.1        | 23.8        | 29.2        | 23.6        |
+-------------+-------------+-------------+-------------+-------------+
| very poor   | 33.6        | 25.3        | 29.6        | 24.4        |
+-------------+-------------+-------------+-------------+-------------+

However, the "PAROS" program gives the EQZ the vulnerability index of
70%, the highest in the country. The vulnerability index is 62.9% in
Gyumri, 72.4% in Spitak, and 47.5% in Vanadzor[^16]. By PAROS standards,
Spitak is considered the most vulnerable city in the RA.

According to the UI/CPA survey[^17], among *domic* residents, monthly
median per capita *incomes* are \$4**,** compared with median per capita
*expenditures* of \$26.80, and median total household expenditures
monthly are \$116. Among *beneficiaries*, median per capita incomes
monthly are \$3.30, No data are available on expenditures. Informal
economic activities, including liquidation of personal assets,
assistance by relatives/friends support (both domestic and from abroad)
and debts cover the differences between cash expenditures and cash
incomes. In addition, households benefit from *non-cash* humanitarian
assistance, and from relatives' and friends' support (which is
effectively not shown in expenditures).

Poverty incidence among domics residents, estimated with regard to
absolute poverty measures, is illustrated by **Table 5.10** (\$15 - food
basket; \$25 - poverty line. The double subsistence level is \$50).

***Table 5.10***

***Poverty incidence among domic residents***

+-----------------------------------+-----------------------------------+
| **Social groups by per capita per | ####### Familie                   |
| month expenditures**              | s with per capita expenditures, % |
+-----------------------------------+-----------------------------------+
| Very poor - less than\$15         | 22                                |
+-----------------------------------+-----------------------------------+
| Poor - \$15-\$25                  | 25                                |
+-----------------------------------+-----------------------------------+
| Middle income - \$26-\$50         | 31                                |
+-----------------------------------+-----------------------------------+
| Upper middle income - \$51 and    | 12                                |
| over                              |                                   |
+-----------------------------------+-----------------------------------+

Table 5.11 illustrates poverty incidence among domic residents and
beneficiaries, estimated with regard to relative subjective poverty
measures.

### Table 5.11 

## Attitudes toward economic status

  ------------ ----------- -------- ---------- ------- ----------------- -------- ---------- -------
  **Economic   **Domic                                 **Beneficiaries                       
  status**     Residents                               in percent**                          
               in                                                                            
               percent**                                                                     

               Gyumri      Spitak   Vanadzor   Total   Gyumri            Spitak   Vanadzor   Total

  "Rich" and   1.1         1.8      2.7        1.6     1.6               2        0          1.3
  above middle                                                                               

  Middle       43.2        50.8     51.4       46.9    58.2              54       66.1       59.3

  Poor         55.7        47.4     45.9       51.5    40.2              44       33.9       39.4
  ------------ ----------- -------- ---------- ------- ----------------- -------- ---------- -------

The self-perception of *domic* residents as being poor is 12% higher
than the beneficiaries who rate themselves mostly in the middle income
range. However, the percentage of households considering themselves rich
or above rich is quite similar.

**Poverty incidence** among domic residents is about **50%** both by
absolute and relative subjective measures (as compared with 63% of
poverty incidence in the EQZ by the 1996 National Survey).

**Table 5.12** illustrates the distribution of total expenditures among
domic residents.

It appears that households in Spitak have higher total expenditures
comparatively with the other two cities.

***Table 5.12***

### Distribution of total expenditures by cities 

  ------------------------ ------------- ----------- ----------- -----------
  **Indicators**           **Domic                               
                           residents**                           

                           Gyumri        Vanadzor    Spitak      Total

  Median total             110           115         150         120
  expenditures including                                         
  heating, \$ per month                                          

  Median total             80            90          125         90
  expenditures excluding                                         
  heating, \$ per month                                          
  ------------------------ ------------- ----------- ----------- -----------

The transitional period has led to deeper social stratification and a
rapid growth of **inequality** in the Armenian society. The UI/CPA
Survey confirms this tendency, showing a high rate of inequality among
domic residents.

In terms of expenditure distribution, the ratio of share of the richest
20% of households to the share of the poorest 20% of households
approaches **21.3**. This indicator is among the highest in countries
with an economy in transition (as a comparison, the income distribution
ratio is 13.4 in the Russian Federation[^18]).

The possession of various assets, such as automobiles, confirms
inequality (see **Table 5.13**).

### Table 5.13

### Possession of assets

  ------------ ----------- -------- ---------- ------- -------- ----------------- -------- ---------- -------
  **Asset      **Domic                                          **Beneficiaries                       
  type**       residents                                        %**                                   
               %**                                                                                    

               Gyumri      Spitak   Vanadzor   Total   Gyumri                     Spitak   Vanadzor   Total

  other house  1.5         9.6      10.7       5.5     0                          2.0      1.7        0.8

  other        2.6         1.8      12.5       4.7     0.8                        0        3.4        1.3
  apartment                                                                                           

  automobile   8.7         11.4     6.3        8.8     8.6                        10       25.4       13.1
  ------------ ----------- -------- ---------- ------- -------- ----------------- -------- ---------- -------

*[**Efficiency of social housing provision**]{.underline}*

These findings reopen the question of efficiency of a category-based
system of provision of social housing. In theory, this system is
supposed to treat poor and rich on an equal footing. However, the social
stratification behind the categories has an impact on differences in
*social capital* and the corresponding economic opportunities among the
eligible groups. As a result, poor and rich benefit differently through
a category-type system.

## Beneficiaries and domic residents

Unfortunately, it is impossible to compare median expenditures of
beneficiaries and households' eligibility for privileged categories (but
which remain in domics).

The UI/CPA Survey does not provide data on beneficiaries' expenditures.

However, one conclusion may be drawn from the table above. Beneficiaries
possess 1.5 times more automobiles than domics residents, and in
Vanadzor - 4 times more (in Vanadzor the system of provision of social
housing is more "generous" comparatively with other cities. Eligible
households include those that did *not* lose housing in the earthquake).
The fact that some beneficiaries possess other houses and apartments is
particularly troublesome. According to the procedures of acquisition of
social housing, the owner of other houses and apartments were not
supposed to get new units. If the extra unit was bought after moving
into social housing, it again is witness to the fact that public
resources were [not]{.underline} directed to assist the most poor.

***Comparison of income and expenditure distribution among different
waiting list categories.***

(Note: As shown in the Survey, few respondents knew their category)

**Table 5.14** illustrates the tendency of certain categories to be
"richer" and "poorer" (measured by monthly per capita incomes).

***Table 5.14***

***Lowest and highest deciles by mean per capita incomes***

  ------------- ---------------------------- ----------------------------
  **Per capita  **Categories within the      
  incomes,      waiting list**               
  ranks**                                    

                domic residents              Beneficiaries

  Lowest        6, 9, 20, 21, 22, 23, 27     6, 9, 1, 2, 3,

  Low           1, 2, 4, 7, 8, 5, 16         7, 18, construction workers

  Middle        3, 11, 26, 29                11

  Highest       15                           8
  ------------- ---------------------------- ----------------------------

Among the poorest per capita incomes are orphans, single mothers and
invalids of the first order as a result of the earthquake. This
observation is confirmed by the analysis of the domic population
(currently on the waiting list) with regard to total incomes. Here,
orphans and single mothers again appear to be the poorest (100% of
orphans and single mothers are within the lowest 20% by per
capita/monthly incomes). The reason for poverty seems to be based on
gender; namely, the absence of a male breadwinner. These groups are
disadvantaged in terms of their own possibilities of income-generation,
and are more dependent upon public assistance and support from friends
and relatives.

Data on per capita expenditures provide a basis for more a accurate
analysis among domics residents. **Table 5.15** illustrates surprising
findings.

### Table 5.15

***Top privileged categories and poverty groups***

+------------------------+----------------------+----------------------+
| **Category within      | **Mean per capita    | **Group with regard  |
| the**                  | monthly              | to poverty line      |
|                        | Expenditures,        | (\$25)**             |
| **waiting list**       | (\$\$)**             |                      |
+------------------------+----------------------+----------------------+
| 1                      | 20.8                 | poor                 |
+------------------------+----------------------+----------------------+
| 2                      | 51.9                 | upper middle         |
+------------------------+----------------------+----------------------+
| 3                      | 27.0                 | middle               |
+------------------------+----------------------+----------------------+
| 4                      | 26.8                 | middle               |
+------------------------+----------------------+----------------------+
| 6                      | 114.7                | upper middle         |
+------------------------+----------------------+----------------------+
| 7                      | 37.9                 | middle               |
+------------------------+----------------------+----------------------+
| 8                      | 29.3                 | middle               |
+------------------------+----------------------+----------------------+
| 9                      | 22.3                 | poor                 |
+------------------------+----------------------+----------------------+
| 11                     | 38.3                 | middle               |
+------------------------+----------------------+----------------------+
| 13                     | 29.9                 | middle               |
+------------------------+----------------------+----------------------+
| 15                     | 57.3                 | upper middle         |
+------------------------+----------------------+----------------------+

To be accurate, there may be mistakes in assigning the category rank to
a certain social group, because different rules regulate waiting lists
in each of the three cities, so the same rank could be applied to
different categories. However, [it does not challenge the
conclusion]{.underline}. It appears that top categories in the waiting
list are mostly within middle and upper middle groups with regard to
poverty evidence.

One can assume that single mothers (category 9) are certainly poor.
Poverty among the invalids of the earthquake (category 1) can be
explained, if one takes into consideration that only poor families with
lack of *social capital* were not provided with new units, and still
remain in the waiting list, regardless of their high priority category.

# ***CONCLUSIONS AND RECOMMENDATIONS***

The category-based system does *not* contribute to combating poverty. In
terms of targeting social assistance, it is *ineffective and
inefficient*. Top categories currently in the waiting list are mostly
within middle and upper middle groups by absolute poverty measures.

The category-based system encourages inequality, because limited public
resources do *not* go to the poorest households, and middle and higher
income households have historically enjoyed better chances to get social
housing. The comparison of possession of assets between beneficiaries
and domics residents confirms this conclusion.

Today the social policy of the RA Government seeks for better-targeted
means-tested programs aimed at *combating poverty*. The introduction of
family allowances, expected starting in 1999, is aimed at making the
poorest families first in line for social assistance by using proxy
means tests (use of "proxies", i.e. personal or family characteristics,
instead of measuring incomes, to qualify families for allowances
programs).

In terms of combating poverty, the housing policy (and waiting lists in
particular) in the EQZ does *not* go hand-in-hand with the GOA's social
policy. Further provision of housing exclusively according to the
category-based waiting lists will not contribute to decreasing poverty
and inequality.

However in planning the implementation of means-testing the well-known
problems of under-reporting incomes, including moral and sub-cultural
factors, need to be recognized.

Interviews showed that *means-tested* procedures, i.e. family
allowances, seem to be appropriate. On the contrary, moral obligations
of the State to the earthquake survivors who lost their homes and could
not benefit from housing privatization on the equal footing with other
citizens are considered *not* to the conditional upon households'
incomes.

The system of distribution of humanitarian aid has encouraged the
formation of a *sub-culture of victimization*. Both households and local
authorities tend to overestimate the evidence and the depth of poverty
(local authorities tend also to overestimate population in order to
increase the scale of aid available).

# 

Several of the proposed measures do *not* require legal changes.

-   First, regardless to the criteria used, the waiting lists in three
    cities should be put in a universal format.

```{=html}
<!-- -->
```
-   Second, the waiting lists should be publicized. Public information
    is essential for transparency.

Other suggestions need legal changes.

-   The analysis proves that distribution of social housing by the
    category-type waiting lists is *inefficient* in terms of combating
    poverty and inequality. However, we do not recommend dissolving the
    existing waiting lists at this time so as not to provoke growth of
    social tension.

```{=html}
<!-- -->
```
-   At the same time, *new criteria* for defining privileges can be
    introduced for alternative housing programs. Searching for new
    criteria reopens the question of the social costs of both the
    earthquake and of recent economic transformations. In turn, the
    criteria must consider the role of public social policy in providing
    relief to the needy, and in encouraging population growth in the
    EQZ.

```{=html}
<!-- -->
```
-   In the field of providing free social housing, we do *not* recommend
    [replacing]{.underline} the *existing* system by means-tested
    procedures, because:

1\) a new system should *encourage* households which are *eager to
contribute* their own resources to housing programs;

2\) in the case of small subsidies, such as family and housing
allowances,

expected misreported incomes - if any - will *not* have a considerable
impact. In cases of assignment of considerable assets, they will lead to
a significant rate of inclusion and exclusion errors.

-   However, since poverty has become one of the biggest national
    problems, policymakers can use *proxy-means tests* to [identify the
    needy]{.underline}. These tests are planned to be developed in
    Armenia for family allowances programs next

-   year. The *eligibility for family allowances* should be considered
    as an *important factor* for housing eligibilities, providing a
    linkage to benefiting from alternative housing programs such as
    certificates and others.

```{=html}
<!-- -->
```
-   Another recommendation is to introduce *means tested housing
    subsidies* to cover maintenance and communal fees as an integral
    part of a new social assistance system in conjunction with family
    allowances.

Table 5.16 Suggested priority categories

+------------------+---------------------------------------------------+
| **Goals of       | **Top privileged families**                       |
| public policy**  |                                                   |
+------------------+---------------------------------------------------+
| **1. Relief to   | 25% of those eligible for family allowances with  |
| the most needy** | highest ranks                                     |
+------------------+---------------------------------------------------+
| **2. Protection  | 2.1. Families with the ratio of                   |
| of socially      | dependents/breadwinners of at least two.          |
| vulnerable       | (Dependents include children, disabled and        |
| groups**         | pensioners with a minimum pension. Breadwinners   |
|                  | include currently unemployed people).             |
|                  |                                                   |
|                  | 2.2. The following new categories could be        |
|                  | suggested for housing purchase certificates and   |
|                  | other alternative programs                        |
|                  |                                                   |
|                  | (no relative privileges are identified)           |
|                  |                                                   |
|                  | \- Orphans                                        |
|                  |                                                   |
|                  | \- Single mothers                                 |
|                  |                                                   |
|                  | \- Families with three and more children and at   |
|                  | least one disabled member                         |
|                  |                                                   |
|                  | \- Families with three and more children and at   |
|                  | least one pensioner with a minimum pension        |
|                  |                                                   |
|                  | \- Families with at least four children           |
|                  |                                                   |
|                  | \- Families with at least two disabled members of |
|                  | first and second orders of disability.            |
|                  |                                                   |
|                  | Any relative priority according to the *cause* of |
|                  | disability (participation in war actions, etc.)   |
|                  | should be excluded.                               |
+------------------+---------------------------------------------------+
| **3. Population  | 3.1. The following categories can be suggested    |
| growth in the    | (relative privileges are ranked from top to       |
| EQZ**            | bottom):                                          |
|                  |                                                   |
|                  | 1\. Families with at least four children          |
|                  |                                                   |
|                  | 2\. Families with at least three children         |
|                  |                                                   |
|                  | 3\. Single mothers                                |
+------------------+---------------------------------------------------+

The above mentioned socially vulnerable categories (2.2. of the above
table 5.16) are identified on the basis of the *1996 national household
survey*. According to this survey, the expenditure distribution reveals
that some socially vulnerable groups show a higher evidence of poverty
than others. This trend is typified by orphans with 83.3% being "poor"
and single senior citizens with 64.3% being "non-poor".

The growth of the number of dependents has an impact on poverty depth.
Families with at least four children show 40.3% as being "very poor" as
compared to 31.1% among families with three children.

When present in a single family unit, vulnerability factors produce a
higher evidence and depth of poverty. For example, families with three
or more children and at least one disabled member are poorer (64.4% of
poor and very poor) than either a family with at least three children
(58.1% of poor and very poor) or a family with a disabled member (57.5%
of poor and very poor).

²ÕÛáõë³Ï 5.8 î²ð´ºðàôÂÚàôÜÀ Âì²ÚÆÜ îìÚ²ÈÜºðÆ ØÆæºô

Table 5.8 DISCREPANCY IN FIGURES

Ä³Ù³Ý³Ï³íáñ ÙÇ³íáñÝ»ñáÙ\` §¹áÙÇÏÝ»ñáõÙ¦, ³åñáÕ ÁÝï³ÝÇùÝ»ñÇ ¨
Ñ»ñÃ³óáõó³ÏÝ»ñÇ ïÝ³ïÝï»ëáõÃÛáõÝÝ»ñÁ

## Households Living in "Domics" as Only Residence and Households on Waiting Lists

(ÙÇ ß³ñù ³ÕµÛáõñÝ»ñÇó)

(from various sources)

+------+-----------+-----------+------------+---------+---------------+
| *    | **²Õ      |           |            |         |               |
| *²Ýá | µÛáõñÝ»ñÇ |           |            |         |               |
| õÝ** | ³ÝáõÝÁ**  |           |            |         |               |
|      |           |           |            |         |               |
| **Na | **Name of |           |            |         |               |
| me** | Sources** |           |            |         |               |
+------+-----------+-----------+------------+---------+---------------+
|      | ä         |           | î»Õ³Ï³Ý    |         | Ð³Û³ëï³ÝÇÝ    |
|      | ³ßïáÝ³Ï³Ý |           | Ï³é³       |         | ûÅ³Ý¹³ÏáõÃÛ³Ý |
|      | ïíÛ³ÉÝ»ñ  |           | í³ñáõÃÛáõÝ |         | ýáÝ¹          |
|      |           |           |            |         |               |
|      | Official  |           | Local      |         | Fund for      |
|      | Data of   |           | Government |         | Armenian's    |
|      | G         |           |            |         | Relief        |
|      | overnment |           |            |         |               |
+------+-----------+-----------+------------+---------+---------------+
|      | §¸        | Ð»        | §          | Ð»ñÃ    | §¸áÙÇÏÝ»ñÇ¦   |
|      | áÙÇÏÝ»ñÇ¦ | ñÃ³óáõó³Ï | ¸áÙÇÏÝ»ñÇ¦ | ³óáõó³Ï | ï             |
|      | ïÝ³ïÝ     |           |            |         | Ý³ïÝï»ëáõÃÛ³Ý |
|      | ï»ëáõÃÛ³Ý | Waiting   | ïÝ³ï       | Waiting |               |
|      |           | List      | Ýï»ëáõÃÛ³Ý | List    | ù³Ý³ÏÁ        |
|      | ù³Ý³ÏÁ    |           |            |         |               |
|      |           |           | ù³Ý³ÏÁ     |         | Number of     |
|      | Number of |           |            |         | Households in |
|      | H         |           | Number of  |         | "Domics"      |
|      | ouseholds |           | Households |         |               |
|      | in        |           | in         |         |               |
|      | "Domics"  |           | "Domics"   |         |               |
+------+-----------+-----------+------------+---------+---------------+
| *    | 17,050    | 14,686    | 16,000     | 14,686  | 16,824        |
| *¶Ûá |           |           |            |         |               |
| õÙñÇ |           |           |            |         |               |
| Gyum |           |           |            |         |               |
| ri** |           |           |            |         |               |
+------+-----------+-----------+------------+---------+---------------+
| **   | 5,191     | 1,052     | 3,300      | 3,653   | 4,267         |
| êåÇï |           |           |            |         |               |
| ³Ï** |           |           |            |         |               |
|      |           |           |            |         |               |
| **   |           |           |            |         |               |
| Spit |           |           |            |         |               |
| ak** |           |           |            |         |               |
+------+-----------+-----------+------------+---------+---------------+
| *    | 7,704     | 1,460     | 4,267      | 1,289   | 4,267         |
| *ì³Ý |           |           |            |         |               |
| ³Óáñ |           |           |            |         |               |
| Va   |           |           |            |         |               |
| nadz |           |           |            |         |               |
| or** |           |           |            |         |               |
+------+-----------+-----------+------------+---------+---------------+
| **²  | \-        |           | \-         |         | 32,542        |
| Õ»ïÇ |           |           |            |         |               |
| ·á   |           |           |            |         |               |
| ïÇÝ  |           |           |            |         |               |
| ÁÝ¹  |           |           |            |         |               |
| Ñ³   |           |           |            |         |               |
| Ýáõñ |           |           |            |         |               |
| ³éÙ³ |           |           |            |         |               |
| Ùµ** |           |           |            |         |               |
|      |           |           |            |         |               |
| **T  |           |           |            |         |               |
| otal |           |           |            |         |               |
| E    |           |           |            |         |               |
| QZ** |           |           |            |         |               |
+------+-----------+-----------+------------+---------+---------------+

**5.2 CASE STUDIES\
**

Anticipated behavioral responses by the Earthquake Zone population to
the recommended housing and social policies need to be carefully and
thoughtfully explored. Otherwise, any program might fail regardless of
whether or not it is economically sound. To explore the impact of the
cultural and economic environment, this report includes short case
studies of families from Gyumri, Vanadzor and Spitak. What household
survival strategies have been adopted by the domic population? How do
they interact with public policy?

# **HOUSEHOLDS' STRATEGIES IN THREE ECONOMIES**

Households in the earthquake zone have had to develop various strategies
of survival, investing their economic, educational, social and cultural
assets in various proportions into three major sectors: *the informal
economy, the State-funded economy, and the \[formal} market economy.*

Informal economic activities are comprised of home production, bartering
within social networks and small-scale sale of homemade products. They
contribute to income generation and social safety within primary groups
(mostly family, relatives and friends). Informal activities play a major
role in the lives of domic residents.

The State-funded sector mostly includes public services, education, etc.
It's low paying, but these lower risk jobs provide a sense of stability
and are considered valuable under conditions of mass unemployment. In
the past, employment in the Soviet industry provided the opportunity to
"squeeze out" private economic activities form the State facilities.
Today the deterioration of former State enterprises significantly limits
not only official employment, but the "shadow economy" as well and has
led to a rapid decline of real incomes.

Employment in commercial structures, or the market sector, is
characterized by considerably higher earnings. At the same time, it
requires higher entrepreneurial motivation and certain *social capital*.
Few domic residents succeed in obtaining permanent employment in the
market sector.

In total, representatives of five domic households from three cities
were interviewed at the beginning of November 1998. The cases included
illustrations of three types of households within the emerging new class
divisions:

1.  Engaged in or aspiring to small businesses;

2.  Wage earners at the State sector, with supplementary income in the
    informal sector; and

3.  Unemployed with supplementary income in the informal sector.

**CASE 1. DOMIC RESIDENTS: SMALL BUSINESSES**

One of the domics attracted our attention by its solid appearance,
resembling permanent housing. It was located within a mixed neighborhood
of domics and multistory buildings, some of the latter waiting to be
strengthened. Lilit, an elderly woman met us to explain that her brother
Ashot, a businessmen, currently lives in Russia and permits his
relatives to occupy the domic. She was grateful for his offer because
she and her husband had to share their own domic with her daughter's
family, and family relations were not really good. Ashot seemed to be
the main supporter for Lilit's family.

She hesitated a bit to speak on behalf of the domic owner. By her
estimation, though, she felt that Ashot would agree to accept land and
construction materials to build his own permanent house and be removed
from the waiting list. Lilit pointed out that it doesn't make any sense
to repair the domic; it is better to build a new one in a place with
necessary infrastructure.

We met another family linked with small business in the \[Spitak\]
neighborhood of prefabricated domics from Italy. Tamara and Gagik
graduated from a technical college. Until recently she worked as an
accountant, and he was mostly engaged in trade activities. The family
possessed a car, and this vehicle let them organize their small
business. One day the car was stolen. Today Tamara and Gagik depend
mostly on informal activities. However, they feel relatively better than
their neighbors do. For example the family is able to use an electric
heater. At the same time, Tamara reported that they had a debt for water
and maintenance fees.

Tamara said that at the moment of the interview they could not afford to
participate in housing programs which would require their own cash
contribution. At the same time, she believed that they might find some
ways to improve their incomes and had not considered alternative housing
programs in general.

**CASE 2. DOMIC RESIDENTS: WAGE EARNERS**

Nvrar, Hrachik and their two children live in a two-bedroom domic. He is
a police officer, and she is a housewife. Nvrar sadly said:

> *"Probably, it is sin to say so, but if the earthquake had to be, why
> did it happen in1988, not a year later? In 1988 our family was second
> in line to receive an apartment. For years we were renting a room at a
> private house. Today we are not even on the waiting list".*

Hrachik stated that they need about \$2,500 to move into a permanent
residence. With a loan of \$1,000-1,500, they will be able to collect
the rest by themselves.

This case reopens a question of housing problems of domic residents who
did not lose their homes because they did not enjoy their own social
housing under socialism.

**CASE 3. DOMIK RESIDENTS: SUB-CULTURE OF VICTIMIZATION**

**The family of unemployed and dependents**

The household consists of two middle-aged workers with no permanent
employment, a pensioner and a child of 12 years old.

Before the earthquake, Manuk and Narine, both with secondary school
educations, earned their living at the Sewing Factory. She was a
seamstress; he had no particular job specialty. The couple shared a
one-room apartment with Manuk's mother. They occupied a living space of
16 square meters and a tiny kitchen. Manuk mentioned in passing that
they could not enjoy any privacy there, and the young married couple
constantly quarreled:

> *" It was impossible to have a normal family life. Either my mother or
> we went to spend a night in the kitchen. The only good thing here \[in
> the domic\] is that all of us have a place to sleep on our own".*

Today the family occupies two rooms, a kitchen and a small corridor with
the estimated total space of 60 square meters. The family's major
complaint is not housing, but difficulties in making ends meet. Their
reported total monthly incomes of \$8 consist of a pension and a child
allowance. Today the parents do not receive unemployment allowance,
because they have exceeded the limits. Manuk pointed out that they did
not have money (about 1,000 drams) needed to re-register at the
unemployment office:

> *"We do not even have petty cash to buy the certificate which would
> state that I had held a job and thus became eligible again for
> unemployment benefits."*

We visited this family in the afternoon. The sick child was in bed. The
grandmother said that they came up with enough money to feed the child,
but the rest of the family can afford only one meal of macaroni per day.
The elderly woman said that electricity was cut off because they could
not pay the bill, and there was no money to buy medicine.

In the evening we visited the family again to inform them about the
process to get free medicine which we learned from an earlier discussion
with the city authorities earlier. In addition, the director of the
Social Protection Department ensured us that he would find a way to
provide a sick child of unemployed parents with electricity.
Surprisingly, the domic welcomed us by the TV set and lamps turned on.
The family de-emphasized the fact that the electricity was not really
cut-off and talked about the debt they're in just to buy bread.

Responding to the question about their expectations with regard to new
housing, Manuk stressed that they did not believe in anything:

> *"We gave up. I do not hope to receive a new unit".*

However, he rejected any alternatives, including the option of taking
possession of the land and receiving construction materials:

> *"I do not have money to pay the construction workers and do not know
> how to do it myself. We lost our home in the earthquake. The State
> should keep the promise to house people who suffered like this".*

The next day, the parents went to the municipality and received the
information on how to get medicine for the child. The senior doctor at
the local hospital assisted them. However, there's no happy ending. The
only breadwinner in the family is Narine, who works in one of the
"underground" sewing workshops. Her earnings are not sufficient to give
the family a chance to participate in alternative housing programs.

***A Subculture of victimization and dependency***

The system of distribution of humanitarian aid has encouraged the
formation of a sub-culture of victimization. Both households and local
authorities tend to overestimate the evidence and the depth of poverty.

*Means-tested* procedures within the family allowance program prove that
tricks such as under-reporting incomes and hiding assets just before the
visit of a social worker are widespread and considered absolutely
ethical.

One should emphasize that this is *rational and rea*sonable behavioral
response to the system, encouraging victimization. Households are not
immoral or guilty in developing the most effective survival strategy for
the existing conditions.

Overcoming the side effects of the existing system of humanitarian
assistance requires time. New factors such as a need for development of
a better environment for foreign investments demand eliminating the
"victimization factor". According to Mrs. Ter-Nigogosyan, Director of
the Department of Investment and Export Policy of the Ministry of
Industry and Trade, "the information we spread \[about Armenia\] through
the media is problematic and troublesome. Crying about our fate makes
potential foreign investors overly conscious of these issues and even
prevents them from coming here.

Of course, Armenia has problems \... but we need to create our image in
dynamics, in comparison with neighboring states and other countries with
economies under transition. We need to emphasize the strong points such
as a better-qualified work force, less corruption\... We need to focus
not on the problems themselves, but on our efforts to solve them."
(Delovoi Express, \# 42 (288), 1998, p.8)

## 

## 

## **CASE STUDIES: CONCLUSION**

Normally, if the labor force supply and social networks are sufficient,
households prefer not to "put all their eggs in one basket" and
therefore invest their assets in different sectors. However, the
economic and social developments in the EQZ have created stronger
correlation between employment opportunities, new social order, class
division and housing conditions. Case studies of families will show how
*social exclusion* is being created. According to one of respondents, an
elderly woman with a higher education:

> *"Every morning I open my eyes and see these slums. It is deeply
> humiliating. I have begun to hate myself. There are kids who grew up
> here and do not know anything else, only slums. They go to school, but
> the lessons they absorb from their surroundings are stronger. How will
> they become normal people and find normal jobs? The worst thing is not
> the absence of money. It is living here in this deteriorating
> self-esteem and loss of dignity".*

The feeling of social exclusion is especially clear in Vanadzor, where
domics form a large isolated area. Peculiarly, families met in Vanadzor
were the most aggressive towards the Central Government and local
authorities and eager to identify corruption as the culprit. Immediately
upon our arrival, a large group assembled to reveal the mismanagement
and corruption in housing distribution and show us their neighbors who
are suffering the most. Responding to the question of acceptance of
*means-testing* housing programs, one of the domic residents angrily
complained:

> *"It does not make sense to test who is poorer in domics. Here all are
> disadvantaged. That is absolutely unfair. Somebody else lives in a new
> house built on money stolen from international assistance which was
> supposed to help people like us. Test him, not us, and give the
> thieves' houses to the most needy in domics. Because of thieves we
> live here, and \[our bodies\] have become decayed".*

Obviously, domic residents are very sensitive to these sorts of issues.

**Chapter 6**

**FINANCIAL PLANNING\
STRATEGY COMPONENTS**

**6.1. Government Obligations to Improve Earthquake Victims' Housing
conditions: Programmatic Solutions, Financial Mechanisms and Policy
Options**

**6.2. Illustrative Investment Plans**

6.1. GOVERNMENT OBLIGATIONS TO IMPROVE EARTHQUAKE VICTIMS' HOUSING
CONDITIONS: RECOMMENDATIONS FOR PROGRAMMATIC SOLUTIONS, FINANCIAL
MECHANISMS AND POLICY OPTIONS

[Background]{.underline}

Current legislation of the Republic of Armenia (ROA) includes several
statements regarding the Government of Armenia's (GOA's) obligations
towards people's housing needs. Article 31 of the Constitution declares
that "every citizen is entitled to an adequate standard of living for
himself or herself and his or her family, including adequate
housing\...The State shall provide the essential means to exercise these
rights." This statement places housing conditions and the adequate level
of housing consumption as an element of the overall living standard and
stresses the enabling role of the State rather than that of direct
provider of housing. This definition based on principles of a market
economy coexists with provisions of the 1983 Housing Codex (which has
not been revised except for one article) which declares the GOA's
obligations to provide housing to certain categories of people and sets
up priorities within these categories. Norms of housing provision
established in the Housing Codex are not related to the economic ability
of society to maintain and reproduce the established level of housing
consumption. And prioritization of categories reflects the ideology and
social structure of Soviet society (see *Waiting Lists*). The GOA
decrees in response to housing provision to the 1988 earthquake victims
are basically derived form the logic of the Housing Codex.

Coexistence of two ideologies in the current legislation and the
inability of the GOA to follow standards set by the previous system
cause many problems and uncertainties. To make the situation stable and
transparent, the GOA should either revisit its obligations to provide
housing to entitled categories of people or set up rules for the
*transition* period when both principles would coexist. The former
assumes cancellation of obligations inherited from the previous system
to all or certain categories of the earthquake victims. This does not
seem to be acceptable not only for moral reasons but also because of
economic and legal ones:

\- During the last ten years, entitled households have been planning
their lives based on the expected realization of the Government's
promise, so there is an "opportunity cost" which cannot be ignored.

-   It is probably not possible to just drop off certain categories:
    even the Soviet- era Hosing Codex states that all victims of natural
    disasters (Art. 39) have priority in access to State assistance over
    all categories established on the basis of their service to the
    State, social and humanitarian criteria (Art. 38). In principle this
    provides the grounds to rearrange waiting lists using the categories
    just as indicators of relative housing need. However, this would
    result in severe political and administrative problems and also
    would preserve the Soviet housing provision and distribution system
    until the ultimate solution for the Earthquake zone (EQZ) problem.

# Recommendations

The following *principles* of a *transitional housing policy* for the
EQZ are recommended:

1.  The Government [confirms its obligations to provide housing to the
    *eligible* households]{.underline} according to Government decrees
    on the EQZ on Waiting List as of 1.01.99. Nobody can be added to the
    Waiting List after that period.

2.  The Government declares that *each year*, a certain amount of
    [Housing Purchase Certificates (HPC's) will be released and offered
    to all people on the waiting list]{.underline} sequentially
    according to their position on the List until all funds allocated
    for HPC's for that year have been used. Households which accept
    certificates are [removed from the waiting list]{.underline}. (See
    *Housing Purchase Certificates* section).

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3.  A certain number of [land plots]{.underline} for individual housing
    construction will be offered. The Government guarantees that
    authorized banks participating in the program will offer [loans for
    housing construction]{.underline} under the conditions to be
    announced.

4\. The Government shall undertake measures to ensure timely relocation
of beneficiaries to the allocated housing units and timely payment for
housing and communal services, as well as for any cost recovery
payments, if applicable. If a family [has not moved to the allocated
unit within a set period of time, the unit is then re-allocated to
another household]{.underline} or used as reserve stock. The family is
returned to the Waiting List, in a new category, to be determined.

5\. [Every year]{.underline}, the GOA will [adopt a Decision on the
allocation of funds]{.underline} to be earmarked to housing programs in
the EQZ among new construction, housing completions, housing
reinforcement and Housing Purchase Certificates, based on the long-term
Government program, the current situation in the marketplace and the
results of the previous stages of program implementation. The Government
will also announce annually how many loans will be made by banks
participating in the program under the established conditions.

6\. The annual Decision will also be made as to the [share of units in
newly built or completed housing to be sold to households holding
HPC's]{.underline}. This could be done in the form of auctions in the
most valuable areas, or the authorities could set the price for units
according to market value and criteria for HPC eligibility (such as,
"only HPC's covering 100% of entitled unit may participate").

7\. If the unit is purchased for a price [less than HPC]{.underline}
value, the difference (but not more than a given, pre-determined
percentage of the initial HPC value) may be [deposited into another
special "home improvement" in the name of the beneficiary
account]{.underline} and, within a given period of time, be [used for
repairs and upgrading]{.underline} of the housing according to the
established procedures).

8\. There should be special rules in case of building reinforcement:
Flats will be allocated to [households who *occupied* the units *before*
the earthquake]{.underline}. If a household, which had previously
occupied the respective building, is no longer on the Waiting List, [the
unit is allocated in accordance to the Waiting List]{.underline}.

9\. There should be special rules for new construction on a site cleared
of "domics". Several domic sites planned for clearance and new
construction are to be identified. A list is prepared of domics needed
to be demolished/removed for the new construction. Households from the
Waiting List categories, which, at the time of construction initiation,
are [actually entitled to receive housing]{.underline} (as of today -
Categories 1-7) [are offered a free housing unit]{.underline} in the
future building and [new temporary housing for the period of
construction]{.underline}. Other households in the waiting list [are
offered HPC\'s]{.underline} with two options: 1) based on *standard*
procedures (see *Housing Purchase Certificates* section) in which case a
[household is not provided a unit in the future housing on the
particular site]{.underline}; and 2) the [price of the unit to which the
household is entitled is calculated on the basis of the projected price
of the unit]{.underline} in the future building. Authorities commit to
sell a unit to the household with a HPC at the agreed upon price. In
both cases, the household is provided with temporary housing. Households
in domics on the respective site but *not* on the Waiting List are
[provided compensation equal to the *market value* of their
domic]{.underline} or their domic may, if practical and cost-effective,
be relocated to another site. Construction starts at the *first* site
where all households have accepted one of the offers made to them by the
authorities.

10\. After the completion of the EQZ housing program, the system may
merge with the National Policy of assistance to people in housing
acquisition. During the EQZ housing program implementation period, the
[GOA initiates needed changes to housing legislation]{.underline}, sets
new criteria for entitlement for State housing (if any) and new criteria
for HPC provision.

## HOUSING PURCHASE CERTIFICATES

The Housing Purchase Certificate (HPC) is a document which certifies
that, if during the set period of time (suggested as 6 months), from the
date when the granted household signs the housing purchase agreement,
the designated bank will pay to the seller the specified amount of money
at settlement (at the time of actual transaction). The purchased unit
must be in the registered housing stock (i.e. not temporary shelter) and
have not less than a certain amount of square meters per person (may be
less than the norm for housing provision but close to the average
housing conditions in multifamily housing. The suggested interval is
between 6-9 sq. m. per person.

During the period of HPC validity, the money is placed in a special
account in the designated bank. Banks participating in the HPC program
are selected by the GOA on a competitive basis. The main criteria
include: ability to maintain the value of the money during the HPC
period, cost of servicing fees requested and other factors. The GOA
could set as one of the requirements, the bank's commitment to provide
market-based interest loans to HPC holders for the amount for which they
qualify, according to the designated bank's standards and the requested
amount (*if* the HPC does *not* cover 100% of the market value of the
unit for which they are entitled). It would be the [bank's obligation to
evaluate]{.underline} and confirm that the housing to be acquired [meets
established standards]{.underline}.

The amount of the HPC is determined in two steps:

1.  The market value of the housing unit for which a family is eligible
    according to the pertinent legislation. The value is determined
    based on market prices in the respective city where the household is
    on the waiting list. The value is determined based on average prices
    per value zone in the city and the quality of housing, either new
    housing or "First Degree" \[state of depreciation\] housing only
    (see tables). The assumption on potential increases in market prices
    as a result of the HPC program implementation is also to be made. As
    the differences in prices between cities are not very significant,
    the average price of \$65 per sq. m. will be used for the following
    [simulations]{.underline}. This gives us the following range of
    values:

#### Table 6.1. Assessment Examples

  -----------------------------------------------------------------------
  **Household size** **Value of the unit**

  (based on 15 sq. m. per person)

  2 persons \$2,000

  3 persons \$3,000

  4 persons \$4,000

  5 persons \$5,000
  -----------------------------------------------------------------------

At the implementation stage, market prices used for the HPC calculations
for the EQZ cities are to be officially published on an annual basis.

2\. The order in which HPC's are offered corresponds to the current
Waiting List ([those who lost homes in the earthquake
only]{.underline}). If undistributed HPC's remain they may be offered
to: 1) households who have lived in domics since the Earthquake and have
no other place to live but are *not* registered as earthquake victims;
and 2) other households on the Waiting List.

The HPC value offered to each household (as a percentage of full market
value of the unit for which they are entitled) will depend on a set of
criteria which may be quite different than that in the current Waiting
List system. The following *illustrative* set of criteria could be
suggested for [discussion purposes]{.underline}:

## Table 6.2. Criteria for Targeting the Waiting Lists

**Criteria** **Percent of unit price deducted**

### The reported income is above the

National Poverty Line but by less - 5%

than two times

The reported income is two times or more

above the National Poverty Line - 10%

The household [did register]{.underline} up for the

"PAROS" program - 20%

The household is [not eligible]{.underline} for a "family allowance" -
10%

The household does not belong to priority categories

set for the HPC program (for options, see the *Waiting List*

section of the report) - 10%

The ratio of dependents to breadwinners is less

than two (2) - 5%

The household is [registered in standard housing]{.underline} - 30%

The current shelter ("domic" or other temporary unit)

has all standard conveniences and significant

upgrading has been made - 10%

(about 20% of upper quality domics)

The household has other housing (in addition to a domic) - 20%\*

-   The level of deduction is subject to the Government policy on
    encouraging or discouraging return of first generation "newcomers"
    to cities back to rural areas

Thus, the HPC in this illustration could cover 30-100% of the market
price of the housing for which it is entitled.

The HPC is issued for a specific city but [valid throughout the entire
country]{.underline} (Yerevan could be the potential exception if the
Government policy is to discourage further population growth in
Yerevan).

Some share of HPC\'s could be issued originally as ["fixed price"
certificates]{.underline} with the likely values of \$1,000, \$1,500 and
\$2,000. In this case, they [do not depend]{.underline} [directly on
market prices]{.underline} for housing or household characteristics
which affect the contribution rate (by the beneficiaries). These
certificates ["spiral down" down the Waiting List until they
"connect"]{.underline} with a household which is ready to be
[voluntarily removed from the Waiting List]{.underline} for the given
amount of money. This instrument is targeted to stimulate the
involvement of households which are the most ready to use their means
for solving their housing problems.

The use of HPC's, then, allows for involving the means of households
which are [ready, willing and able to contribute to the solution of
their particular housing]{.underline} [problem]{.underline}. It could
also act as a *self-selecting* means-testing mechanism as households are
offered a [trade-off between the value of time to be spent on the
Waiting List and the contribution of their own means]{.underline}.
Households will also make their own choices of housing according to
their needs and ability to pay for maintenance and services. Survey
results show that about 20% of households in domics spend more than 30%
of their expenditures on housing and communal services (*without* heat
expenditures). If figured at the 15 sq. m. per person norm for standard
housing, their housing expenditures would increase at least 1.5 times.
With an HPC, a household could choose between a normative *quantity*
(floor area) of housing of average *quality* [or]{.underline} less
housing with *better* quality.

**[Housing Purchase Certificates and Transparency Issues.]{.underline}**

The implementation of the system of HPC's could serve as a tool to
increase transparency of the system of Waiting List development and
administration. The lack of transparency has been identified as one of
the main impediments to expansion of donor activities in housing
construction in the EQZ. As an example, according to a Jinishian
Memorial Program representative, the Program would be able to deliver at
least 50 units every year if they were convinced that there was fairness
in the housing distribution procedure. They maintain that other donors
have the same attitude.

To overcome this situation and to ensure equity and fairness in
distribution of Government and donor funds, it is recommended that:

1.  The Government should [set uniform standards for Waiting List
    record-keeping formats]{.underline} for *all* the EQZ settlements.

2.  Local governments should be required to [redevelop their *current*
    Waiting List(s)]{.underline} in the standard format and officially
    [submit one copy to Ministry of Finance and Economy]{.underline}.

3.  Housing Purchase Certificates will be allocated [on a priority basis
    to the jurisdictions which fulfill the above requirements
    *first*]{.underline}.

4.  The Housing Purchase Certificate allocation will be administered by
    the Ministry of Finance and Economy. An *[administration
    committee]{.underline}* may include representatives of the Ministry
    for Social Protection and representatives of the donor community
    contributing housing, which should supervise within the EQZ
    jurisdictions the allocation of Housing Purchase Certificates [in
    cooperation with local authorities]{.underline} in accordance with
    the set procedures.

OPTIONS FOR DECREASING THE NEEDED IN FUNDS TO SOLVE THE EQZ HOUSING
PROBLEM

The potential for decreasing costs required for meeting the housing
needs in the EQZ is based on the following facts:

1\. The [market price]{.underline} for housing [is significantly less
than the cost of construction]{.underline} of similar housing;

2\. Survey results show that a [substantial number of households would
be ready to solve their housing problems themselves *if* provided with a
given amount of money]{.underline} which is definitely [*less than* the
cost of new construction]{.underline};

3\. The current status of housing stock in the area equates to [limited
new construction for solutions]{.underline}; the [stock's housing area
distribution is the extremely uneven]{.underline} which causes an acute
housing problem.

4\. [Housing needs]{.underline} for people who lost homes in the
earthquake [have merged over ten years with needs due to other
circumstances]{.underline}. Not all domic dwellers are there because
they are earthquake displaced or do not have another place to live.
Careful [re-evaluation of the housing needs in terms of Government
obligations]{.underline}, is required.

Thus the following steps of analyses are to be undertaken:

\- [Reassessment of the number of households]{.underline} to be
sheltered;

\- [Reevaluating housing standards]{.underline} and the [rational use of
*existing* housing stock]{.underline};

\- [Reallocating the available funding allocation among *different*
strategies]{.underline} in order to decrease the per household cost of
solving the shelter problem

It is apparent that there will be [no single criterion]{.underline} to
assess efficiency of the suggested policy measures. At least four
indicators should be taken into account:

\- number of domics demolished or converted to non-residential uses;

\- number of households removed from the waiting list;

\- the cost to the Government for solving each case's housing problem;

\- the impact of policy measures on development of the overall housing
market in Armenia.

## 

## **NUMBER OF HOUSEHOLDS TO BE SHELTERED**

The housing need in the EQZ consists of the following strata:

1\. Households who lost their housing in the earthquake and still do not
have permanent housing;

2\. Households who lost their housing in the earthquake but today live
in some form of standard housing (often shared with relatives);

3\. Households which lived in an EQZ city before the earthquake, did not
lose their housing but now live in domics as their only place of
residence (these include those who lived in dormitories, or rented a
private unit);

4\. Households belonging to certain privileged categories who neither
lost their home in the earthquake nor have to live in temporary shelter;

5\. Households with a great housing need who belong neither to
earthquake displaced nor to other privileged categories (some also live
in domics, i.e. young families).

Presently, waiting lists in the EQZ cities consist of households in
categories 1,2 and 4 (above).

Government obligations are [unquestionable appropriate for Category
1]{.underline}. The situation is [not as clear with respect to
Categories 2 and 4]{.underline}. In terms of *housing* needs, the
conditions within these categories do not look much different as
compared with Categories 3 and 5, to which the Government today bears no
obligations.

In real numbers, the situation looks the following way:

Of 26,409 housing units to be provided in Shirak Marz and Lori Marz
according to the Government Program, more then 60% would be provided in
Shirak Marz (16,040 units of which about 16,000 units are to meet the
needs of Gyumri). This corresponds to the reported number of domics in
the city. However the distribution of population between different types
of housing stock shown in the following table indicates that [*no more
than 40,000* citizens or *9,000 households* have their *only* residence
in a domic]{.underline}.

Some households supposedly are [registered in permanent housing and
still keep their domics for alternative or seasonal use]{.underline} or
somehow manage to [maintain registration in both places]{.underline}.
This could be one of the explanations for the difference between the
*reported* number of domics in Gyumri and the *simulated* number of
households in domics. Thus, only 70% of domics are *occupied* which
approaches the portion provided in Vanadzor - 80%. The remainder is used
either for [non-residential purposes]{.underline} or used as [second
housing during the warmer seasons]{.underline} (especially those with
land plots). Even if one assumes that some households are registered in
Third Degree (of deterioration) buildings (though they should not be),
the conservative estimate for the number of households in Gyumri [which
lost their houses and do not have other standard housing
would]{.underline} [not exceed 11,000]{.underline}.

## Table 6.3. Gyumri -- Local Government Expert Estimation of Need

+-------------------------+--------+--------+--------+--------+--------+
|                         | **U    | ##     | **H    | **Pe   | *      |
|                         | nits** | Build- | ouse-h | ople** | *Total |
|                         |        |        | olds** |        | S      |
|                         |        | **     |        |        | pace** |
|                         |        | Ings** |        |        |        |
+-------------------------+--------+--------+--------+--------+--------+
| **State, Department,    | 9,684  | 334    | 22,400 | 1      | 5      |
| Coop Multifamily**      |        |        |        | 00,200 | 88,000 |
+-------------------------+--------+--------+--------+--------+--------+
| **- of which considered | \      | 150    | \      | \~     | n/a    |
| not suitable for living | ~4,500 |        | ~2,500 | 11,000 |        |
| (degree III) but in     |        |        |        |        |        |
| reality 50% occupied    |        |        |        |        |        |
| (but not                |        |        |        |        |        |
| registered)\*\*\***     |        |        |        |        |        |
+-------------------------+--------+--------+--------+--------+--------+
| **State 1-story**       | 1,001  | 853    | 4,600  | 20,700 | 90,000 |
+-------------------------+--------+--------+--------+--------+--------+
| **Individual            | 9,700  | 9,700  | \~     | 70,000 | n/a    |
| permanent**             |        |        | 16,500 |        |        |
+-------------------------+--------+--------+--------+--------+--------+
| **Domics**              | 1      | 1      | \~     | 39     | n/a    |
|                         | 6,000/ | 6,000/ | 11,000 | ,300\* |        |
|                         |        |        |        |        |        |
|                         | 10     | 10     |        |        |        |
|                         | ,000\* | ,000\* |        |        |        |
+-------------------------+--------+--------+--------+--------+--------+
| **Total**               | 36,385 | 26,887 | 54,500 | 2      | N/a    |
|                         |        |        |        | 30,000 |        |
+-------------------------+--------+--------+--------+--------+--------+

Source: Information from housing department of the City of Gyumri.

\* Calculated as the difference between the official population of the
city (230,000) and the sum of families registered in other types of
housing for the given number of household members

\*\*Domic survey results (1998)

\*\*\* Estimation by city officials and expert simulations

Thus about 5,000-7,000 households which were *initially* domic residents
have apparently joined other households (relatives) in permanent
housing. By this action, they effectively have [moved themselves from
the category of those who *lost* housing as a result of the earthquake
to the category of those whose housing conditions *worsened
significantly* as a result of the earthquake]{.underline}. Their housing
conditions today are [not much different than those who did not lose
housing but were in critical housing need at the time of the
earthquake]{.underline} and subsequently lost any hope for the
assistance by the State. Nor are they much different from those whose
housing needs drastically increased during the last 10 years.

The Government should consider one of the following approaches to these
issues:

\- [do not commit to provide any assistance to the aforementioned
households under the EQZ housing program]{.underline}; *or*

\- make them [eligible for an HPC covering only 50%]{.underline} of the
price of the housing unit to which they are entitled; *or*

\- reevaluate its obligations [only after all households having the only
place of residence in substandard domics are placed in permanent
shelter]{.underline}.

The amount of housing need could be also reassessed based on the
following information:

1.  According to estimates of city authorities, the *actual* population
    in the cities of Gyumri and Vanadzor is [20% less]{.underline} than
    the *official* numbers (presumably calculated by "propiskas"
    (registration of official residency). Of those who left these
    cities, 50% will not come back in the foreseeable future.

2.  One of the strata of the cities' populations are new arrivals from
    rural areas who either never got jobs in the city or got them for a
    very short period of time before the city's industry collapse.
    Furthermore, some never received permanent registration in the
    respective city. For example, currently, [over a third of domic
    residents in Vanadzor have land and/or housing in another
    place]{.underline} (survey results).

## HOUSING STANDARDS AND THE USE OF EXISTING HOUSING STOCK

The established norm for housing in Armenia is 13 sq. m. per household
member in urban areas and 16 sq. m. in the countryside.

The housing consumption in the Earthquake Zone in comparison with the

national averages is characterized by the following numbers:

## Table 6.4. Housing Consumption in the Earthquake Zone

  ------------------- ----------- ----------- ------------ -------------- ------------
                      **Armenia   **Armenia   **Gyumri**   **Vanadzor**   **Spitak**
                      total**     urban**                                 

                                                                          

  **Housing before    ?           ?           11.0         11.5           13.7
  earthquake (sq. m.                                                      
  per person)**                                                           

  **Housing as of     15.8        13.8        9.9\*\*      13.5\*\*       4.6\*\*\*
  01.01.98 (sq. m.                                                        
  per person)\***                                                         

  **Housing           \-          \-          12.0         14.0           22.5
  conditions of                                                           
  people registered                                                       
  in standard                                                             
  housing**                                                               
  ------------------- ----------- ----------- ------------ -------------- ------------

\* Does not include floor area of domics but includes domic population

\*\* Data for Marz urban population (Government Program, table 1)

\*\*\*Data from Spitak city administration

This Table (above) demonstrates that at the time of the earthquake,
[cities already experienced significant]{.underline} shortages, and in
Gyumri and Vanadzor, nearly half of households qualified for being put
on a waiting list. However, during the last ten years, the housing
provision in Vanadzor has increased to about the national average for
urban areas whereas in Gyumri and Spitak, it is still at a level
significantly lower than the pre-earthquake one.

At the same time, in Vanadzor, about 6% of households do not have
permanent housing (not all of them are earthquake displaced). This
suggests that there is a sharp differentiation within the existing
housing stock. This can partly be explained by the existence of a
significant number of individual housing units (single or semi-detached,
low rise) in urban areas with a floor area which is significantly
greater than in multifamily housing. But there seems to be significant
[disparity among the multifamily housing as well]{.underline}. This
could result from the extremely high differentiation of incomes and
wealth in Armenian society and the [lack of economic stimuli for the
rational consumption of existing housing stock]{.underline}. To test
these hypotheses, a more careful look at Gyumri housing distribution,
including the domic segment, was undertaken.

**[The Case of Gyumri]{.underline}**

Today, the City of Gyumri has the following housing distribution:

## **Table 6.5 Gyumri Housing Distribution**

  --------------------------- -------------- -------------- --------------
                              **People**     **Total        **Space per
                                             Space**        person**

  **State, Department, Coop   100,200        588,000        5,9
  Multifamily**                                             

  **State 1-story**           20,700         90,000         4,5

  **Individual permanent**    70,000         n/a            n/a

  **Domics**                  40,000\*       n/a            8,9\*\*

  **Total**                   230,000        n/a            9,9\*\*\*
  --------------------------- -------------- -------------- --------------

Source: Information from Housing Department of Gyumri.

\* Calculated as the difference between the official population of the
city (230,000) and the sum of registered households in other types of
housing based on the number of household members

\*\*Domic survey results (1998)

\*\*\*Data for Shirak Marz urban population

Several conclusions and can be made from the preceding table:

1\. A certain level of equilibrium has been achieved in the housing
market. People in domics have [less quality]{.underline} of housing but
[more housing space]{.underline} compared with residents of permanent
housing, This can also be illustrated by the fact that [a significant
portion of newly built or reinforced housing is vacant]{.underline}.
People are not rushing to occupy new units until the needed improvements
are made and/or convenient access to public transportation is organized.

2\. Even if one was to assume that all households which have supposedly
moved to permanent stock from domics during the last 10 years and then,
*moved back* to domics as their sole residence, those in multi-family
housing would *still* have only 7 sq. m. per person. This is
significantly different than the situation both at the national level
where the average urban housing space is 13.8 sq. m. per person and in
urban areas of the Shirak Marz (9.9 sq. m. per person). The latter
number apparently contains a [very big differentiation]{.underline}
between housing conditions in individual, single houses in urban areas
(including State housing) and those in multifamily buildings.

3\. The *differences* between market values of domics and permanent
apartments are much *less* than expected.

## Table 6.6. Market Values of Housing

+---------+---------+----------+----------+------------+------------+
| ## City | **Domic | **Median | **Median | **Median   | **1 sq. m. |
|         | Median  | Domic    | Value of | Purchase   | market     |
|         | Value   | Purchase | 1 sq.m.  | Price of 1 | price of   |
|         | (if not | Price    | of       | sq. m. of  | standard   |
|         | 0)**    | (if not  | Domic**  | domic**    | housing    |
|         |         | 0)**     |          |            | (new.cons  |
|         | **\$**  |          | **\$**   | **\$**     | tr./Degree |
|         |         | **\$**   |          |            | 1)**       |
|         |         |          |          |            |            |
|         |         |          |          |            | **\$**     |
+---------+---------+----------+----------+------------+------------+
| ##      | n/a     | n/a      | \-       | \-         | 45/35      |
|  Gyumri |         |          |          |            |            |
+---------+---------+----------+----------+------------+------------+
| **Van   | n/a     | n/a      | \-       | \-         | 54/34      |
| adzor** |         |          |          |            |            |
+---------+---------+----------+----------+------------+------------+
| **S     | n/a     | n/a      | \-       | \-         | 44/-       |
| pitak** |         |          |          |            |            |
+---------+---------+----------+----------+------------+------------+
| **      | 300     | 500      | 10       | 16         | \~45/35    |
| Total** |         |          |          |            |            |
+---------+---------+----------+----------+------------+------------+

The above table indicates that, despite a market value for domics which
is 8-10 times less than the price for a standard 2-room unit, the
[difference is only about three times in terms of value per sq.
m.]{.underline} This means that the average household in a domic already
has assets amounting to 25-30% of the means needed to put itself in
standard housing with similar spatial conditions and about 12-15% of the
means needed for housing it is entitled to according to the GOA Program
(15 sq. m. per person). In other words, the market treats the housing
conditions of the people in domics in the following ways:

-   almost 2 times worse than the average current conditions of their
    neighbors living in permanent multifamily housing;

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```
-   about 4 times worse as compared to the situation when a family is
    relocated from a domic to permanent housing with the same floor area
    conditions;

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```
-   about 8 times worse as compared to conditions that the GOA is
    obligated to provide according to its current obligations.

Though it could be argued that the value of the domic household's asset
consists basically of the [value of the land plot]{.underline}, the
household is already involved in market transactions and definitely take
this value into consideration in developing its housing strategies. This
makes certain issues extremely important, namely: the legal status of
domics and compensation to owners or renters, in the case when domics
are removed.

The following conclusions may be made from examination of the
distribution of existing housing stock in the EQZ:

\- there is an [extremely high differentiation in housing area per
person]{.underline} among both different segments of the urban housing
stock and within multifamily housing;

\- people in domics have shelter upon which the [market places *some*
value]{.underline}; at least 10% of the upper quality domics could be
seriously considered as potential for upgrading to permanent housing;
the Government could implement this aspect of the housing program for
the EQZ under only moderately urgent conditions;

\- conditions in permanent housing are also poor and its [differences
within the domic sector are *not as striking*]{.underline} as it might
be expected; there is a great need within permanent housing with no
Government obligations;

\- except for the most ramshackle and dilapidated ones, [domics with an
acceptable quality when vacated will be occupied by young families in
great need now living in permanent housing]{.underline}. Local officials
will try to keep those domics for redistribution because a significant
number of young families would accept moving to a domic.

## 

## 

## ABILITY TO PAY FOR HOUSING AND COMMUNAL SERVICES

The payments for housing and communal services at the current levels,
which is often significantly lower than the official norms, are still
quite a burden in terms of people's incomes.

Survey results show that in the domic segment of the population, for the
median level of household expenditures which are at \$120/month, about
15% or \$18 goes towards payments for housing and communal services
(both numbers are expenditures with heat distributed over a 12 month
period). 16% of households spend more than 35% of their monthly
expenditures on housing and communal services even without heat
payments. In the absence of a housing allowance system, even the
households living in domics experience significant difficulties in
meeting these obligations. When provided with standard housing, they
will have even more difficulty as the amount of communal payments will
increase.

*Officially*, the Government no longer subsidizes housing maintenance.
But in fact, it *does* in two ways:

1.  The inability of a significant portion of households to meet their
    housing obligations results in huge arrears. According to the Gyumri
    city administration, households' debt for maintenance alone amounted
    to \$80,000 (40 mln. drams). The debt for heat and electricity is
    about 20 times higher. The administration of Vanadzor scores the 25%
    collection rate of payments for water as \"good\". No comprehensive
    enforcement procedures seem to be in place.

2.  As the maintenance fees could barely cover the most urgent needs,
    deferred maintenance and repair items accumulate. In a few years it
    may result in yet a new increase of households without permanent
    shelter as their current buildings become unsafe to inhabit. The
    Government will have to make good on deferred expenditures, by
    subsidizing repairs or otherwise face solving new problems of
    another homeless sector.

The difference between the average housing area available per person
*and* the high degree of need in certain segments indicates that the
number of "overcrowded" households (compared with the norms of housing
provision) is *substantial* and these factors contribute a significant
portion to the debt for maintenance and communal services. It would be
natural to assume that in the absence of a real enforcement system,
[families with the means do not pay for maintenance either]{.underline}.

In order to set up [economic stimuli for a rational distribution of the
existing housing stock]{.underline}, which will decrease the magnitude
of debt and increase the market supply of housing to meet the rise in
the [*effective* demand caused by HPC's]{.underline}, the Government may
do the following:

1.  Significantly increase payments for maintenance in multifamily
    buildings for units above a designated size normative, say 13 - 15
    sq. m. per person. In privatized housing stock, this could be done
    with three options: a) by increasing rents in State-owned buildings
    and/or the "service fee" applied to *both* private (if *not* in a
    registered condominium) and State-owned housing; b) property tax
    increases for private housing; and c) by introduction of a special
    capital improvements fund. The third could be tied with the
    Government's obligation to return the collected funds in the form of
    subsidies in the case where a building establishes a condominium and
    starts its own program of rehabilitation. The total payment for
    housing and communal services should be [determined more by the size
    of the occupied]{.underline} unit rather than the size of household.

2.  Set legal enforcement procedures against those who have not paid for
    maintenance for more than, say, 6 months AND have more than say, 15
    sq. m. per person. In State housing, households may be relocated to
    a unit with less housing space, 6-9 sq. m. per person. In private
    housing, the authorities could claim a "lien" (debt) against the
    value of real estate in ownership.

3\. Set a system of assistance and protection to those who would like to
move "voluntarily" from their housing to one with less space.

4\. The intent would be not to initiate a large number of court
procedures but, rather, to set a precedent which would [add momentum to
the natural process of redistribution]{.underline} of the existing
housing stock according to the *effective* demand.

## **POLICY OPTIONS**

It is clear that to achieve timely and effective solutions to the
housing problem in the EQZ, [all the above-listed strategies should be
employed]{.underline}. However, the issue of primary importance is [how
much weight each of them should have and the most effective
combination]{.underline} to achieve the ultimate goals of the chosen
housing policy for the EQZ. The following policy matrix helps to develop
a comprehensive approach to housing policy in the Zone.

The matrix suggests increasing the share of funds allocated to Housing
Purchase Certificates and to new construction at the expense of housing
completions.

## **Table 6.7. Policy Matrix**

+-------+----------+-----------+-------------+----------+-----------+
| **    | **New    | **Housing | **Housing   | **Home   | **Loans   |
| Crite | Constr   | Reinfo    | C           | Purchase | for self  |
| ria** | uction** | rcement** | ompletion** | Cert     | con       |
|       |          |           |             | ificates | struction |
|       |          |           |             | (could   | including |
|       |          |           |             | be       | domic     |
|       |          |           |             | combined | upgrade** |
|       |          |           |             | with     |           |
|       |          |           |             | mortgage |           |
|       |          |           |             | loans)** |           |
+-------+----------+-----------+-------------+----------+-----------+
| Cost  | The cost | The cost  | The av.     | Families | Families  |
| of    | of unit  | of unit   | completion  | would be | would be  |
| so    | would be | would be  | cost per    | ready to | ready to  |
| lving | \$10,00  | \$5,      | sq. m. is   | be       | be        |
| a     | 0-15,000 | 000-7,000 | \$58 for    | removed  | removed   |
| h     | and the  | and the   |             | from     | from      |
| ouseh | cost of  | cost of 1 | unfinished  | waiting  | waiting   |
| old's | 1 sq. m. | sq. about | housing     | list for | list for  |
| ho    | about    | \$100     | which *has  | the      | a loan of |
| using | \        |           | already     | average  | \$2,      |
| pr    | $150-200 |           | been        | subsidy  | 000-3,000 |
| oblem |          |           | completed*  | of       | (case     |
|       |          |           | (since      | \$5,000  | studi     |
|       |          |           | 1994). But, | (survey  | es/survey |
|       |          |           | the cost    | results) | results)  |
|       |          |           | today for   |          |           |
|       |          |           | subsequent  |          |           |
|       |          |           | completions |          |           |
|       |          |           | could be    |          |           |
|       |          |           | much        |          |           |
|       |          |           | higher;     |          |           |
|       |          |           | final costs |          |           |
|       |          |           | with        |          |           |
|       |          |           | infr        |          |           |
|       |          |           | a-structure |          |           |
|       |          |           | could       |          |           |
|       |          |           | approach    |          |           |
|       |          |           | new         |          |           |
|       |          |           | c           |          |           |
|       |          |           | onstruction |          |           |
|       |          |           | costs.      |          |           |
|       |          |           | Sites with  |          |           |
|       |          |           | lowest      |          |           |
|       |          |           | costs for   |          |           |
|       |          |           | completion  |          |           |
|       |          |           | and         |          |           |
|       |          |           | rei         |          |           |
|       |          |           | nforce-ment |          |           |
|       |          |           | should be   |          |           |
|       |          |           | identified. |          |           |
+-------+----------+-----------+-------------+----------+-----------+
| I     | The cost | A         | The cost of | Increase |           |
| mpact | is       | dditional | completion  | of the   |           |
| on    | 25-50%   | supply of | could be    | e        |           |
| real  | more     | housing   | higher than | ffective |           |
| e     | than the | would     | the market  | demand   |           |
| state | market   | push down | value of    | would    |           |
| m     | value of | market    | the         | raise    |           |
| arket | housing. | prices on | building,   | real     |           |
|       | Ad       | housing   | p           | estate   |           |
|       | ditional |           | articularly | market   |           |
|       | supply   |           | in remote   | prices   |           |
|       | of       |           | areas       | and make |           |
|       | housing  |           |             | private  |           |
|       | would    |           |             | in       |           |
|       | further  |           |             | vestment |           |
|       | push     |           |             | in       |           |
|       | down     |           |             | housing  |           |
|       | prices   |           |             | more     |           |
|       |          |           |             | at       |           |
|       |          |           |             | tractive |           |
+-------+----------+-----------+-------------+----------+-----------+
| I     | Allows   | Limits    | Limits      | Though   |           |
| mpact | solving  | housing   | development | giving   |           |
| on    | urban    | de        | to existing | up domic |           |
| urban | planning | velopment | sites often | could be |           |
| pla   | issues   | to older, | with        | one of   |           |
| nning | i        | existing  | substantial | the      |           |
| and   | nvolving | b         | negative    | co       |           |
| urban | dev      | uildings. | side        | nditions |           |
| dev   | elopment | The value | effects for | of the   |           |
| elop. | of the   | of        | the future  | home     |           |
|       | most     | r         | urban       | purchase |           |
|       | adequate | einforced | d           | subsidy  |           |
|       | land     | building  | evelopment. | pr       |           |
|       | plot,    | is higher | Sometimes   | ovision, |           |
|       | e        | than in   | requires    | it is    |           |
|       | xecuting | case of   | significant | likely   |           |
|       | c        | co        | investment  | that the |           |
|       | learance | mpletions | in          | sig      |           |
|       | of domic | as more   | inf         | nificant |           |
|       | set      | land plot | rastructure | portion  |           |
|       | tlements | (         | upgrading   | of       |           |
|       |          | location) |             | domics   |           |
|       |          | is more   |             | will be  |           |
|       |          | valuable  |             | retained |           |
+-------+----------+-----------+-------------+----------+-----------+
| **    | **New    | **Housing | **Housing   | **Home   | **Loans   |
| Crite | Constr   | Reinfo    | C           | Purchase | for self  |
| ria** | uction** | rcement** | ompletion** | Cert     | con       |
|       |          |           |             | ificates | struction |
|       |          |           |             | (could   | including |
|       |          |           |             | be       | domic     |
|       |          |           |             | combined | upgrade** |
|       |          |           |             | with     |           |
|       |          |           |             | mortgage |           |
|       |          |           |             | loans)** |           |
+-------+----------+-----------+-------------+----------+-----------+
| P     | Provides | Creates   | Provides    | Reveals  | Only      |
| ublic | the      | potential | the visible | the      | upper     |
| p     | visible  | conflict  | ju          | current  | income    |
| olicy | justi    | between   | stification | trend of | strata    |
| and   | fication | dis       | of the      | de       | h         |
| p     | of the   | tribution | Government  | creasing | ouseholds |
| ublic | Go       | of        | care for    | housing  | could     |
| accep | vernment | housing   | the EQZ     | s        | afford    |
| tance | care for | units     | housing     | tandards | loans     |
| im    | the EQZ  | based on  | problem;    | as       |           |
| plica | housing  | current   | creates     | people   |           |
| tions | problem; | needs and | problem     | will     |           |
|       | creates  | waiting   | with future | purchase |           |
|       | problems | list      | maintenance | as much  |           |
|       | with     | p         | of the      | housing  |           |
|       | future   | riorities | building    | as they  |           |
|       | mai      | *and*     |             | would be |           |
|       | ntenance | a         |             | able to  |           |
|       | of the   | llocation |             | afford   |           |
|       | building | to former |             | services |           |
|       |          | residents |             | for      |           |
+-------+----------+-----------+-------------+----------+-----------+
| Imple | Requires | Implies   | No          | No       | Temporary |
| menta | solution | the risk  | temporary   | t        | housing   |
| -tion | for      | of        | housing     | emporary | could be  |
| i     | t        | con       | needed      | housing  | needed    |
| ssues | emporary | struction |             | needed;  | for some  |
|       | housing  | "f        |             | cert     | stages of |
|       | issue    | reezing"; |             | ificates | con       |
|       | during   |           |             | could    | struction |
|       | the      |           |             | expire   |           |
|       | cons     |           |             | in a     |           |
|       | truction |           |             | fixed    |           |
|       | period;  |           |             | period   |           |
|       | implies  |           |             | of time  |           |
|       | the risk |           |             |          |           |
|       | of       |           |             |          |           |
|       | cons     |           |             |          |           |
|       | truction |           |             |          |           |
|       | freezing |           |             |          |           |
+-------+----------+-----------+-------------+----------+-----------+
| Co    | P        | \_        | Preserves   | Provides | \_        |
| ntrib | reserves |           | the Soviet  | the      |           |
| ution | the      |           | housing     | right of |           |
| to    | Soviet   |           | d           | choice   |           |
| ho    | housing  |           | istribution | to       |           |
| using | dist     |           | system,     | people.  |           |
| p     | ribution |           | households  | A        |           |
| olicy | system,  |           | would have  | ddresses |           |
| r     | ho       |           | little      | their    |           |
| eform | useholds |           | influence   | demand   |           |
|       | would    |           | on          | to       |           |
|       | have     |           | parameters  | control  |           |
|       | little   |           | of housing  | use of   |           |
|       | i        |           | they would  | s        |           |
|       | nfluence |           | obtain      | ubsidies |           |
|       | on       |           |             | th       |           |
|       | pa       |           |             | emselves |           |
|       | rameters |           |             | and      |           |
|       | of       |           |             | their    |           |
|       | housing  |           |             | negative |           |
|       | they     |           |             | ex       |           |
|       | would    |           |             | perience |           |
|       | obtain   |           |             | with     |           |
|       |          |           |             | go       |           |
|       |          |           |             | vernment |           |
|       |          |           |             | agencies |           |
+-------+----------+-----------+-------------+----------+-----------+
| Ind   | Does not | \_        | \_          | Involves | Involves  |
| irect | co       |           |             | banking  | banking   |
| ef    | ntribute |           |             | sector   | sector    |
| fects | to       |           |             | into     | into      |
|       | dev      |           |             | housing  | con       |
|       | elopment |           |             | finance  | struction |
|       | of       |           |             | system;  | period    |
|       | housing  |           |             | does not | financing |
|       | finance  |           |             | co       |           |
|       | system   |           |             | ntribute |           |
|       | in       |           |             | to       |           |
|       | Armenia, |           |             | dev      |           |
|       | would    |           |             | elopment |           |
|       | have     |           |             | of       |           |
|       | positive |           |             | cons     |           |
|       | effect   |           |             | truction |           |
|       | on jobs  |           |             | building |           |
|       | in the   |           |             | material |           |
|       | cons     |           |             | industry |           |
|       | truction |           |             |          |           |
|       | industry |           |             |          |           |
+-------+----------+-----------+-------------+----------+-----------+

## **6.2 ILLUSTRATIVE INVESTMENT PLANS**

The current strategy of the Government EQZ program does prescribe
different strategies for the EQZ cities. In Gyumri, almost all units are
programmed to be obtained through completion of unfinished sites and
building reinforcement whereas in urban areas of Lori Marz, these two
sources are expected to cover needs in less than 50% units of the
proposal. The share of new construction (mostly in Spitak) and subsidies
for housing purchase from the market are much greater.

However in terms of the implementation strategy, the Program assumes a
more rapid start in Gumri where, during the first year of the Program
implementation, close to 5% of the needed units will be provided (in
Lori Marz - only 1%).

## Table 6.8. Government Program. October 1998 Draft

  ----------------------- ----------------------- -----------------------
                          Shirak Marz             Lori Marz

  Housing units to be     16,040                  10,369
  built obtained in                               
  1998-2001 (Gov.                                 
  program)                                        

  of which                                        

  new construction        6.0%                    24.1%

  purchase at market      4.4%                    8.6%

  unfinished construction 50.1%                   18.4%

  Reinforcement           36.0%                   10.2%

  loans in urban areas\*  1.2%                    \-

  loans in rural areas    2.3%                    38.7%
  ----------------------- ----------------------- -----------------------

\* for condominium building construction in the central area of the
city. Not only domic dwellers or earthquake victims are entitled

The following tables compare the structure and cost of the policy
measures according to the Government Program for the EQZ with the
[alternative scenarios suggested by this Report]{.underline} (Tables
6.9, 6.10 and 6.11).

The average costs for units according to the Government Program are
simulated from the Program data (required capital investment/number of
units). Assumptions for alternative scenarios are made on the basis of
construction costs and housing market data collected during the current
study.

**Table 6.9 Gyumri: Illustrative Investment Plan**

  ---------------- ------------ ----------- ----------- ------------- ----------- ----------
                   Government                           Alternative               
                   Program                              Scenario                  

                   \# of units  Cost per    Program     \# of units   Cost per    Program
                                Unit (\$)   Cost                      Unit (\$)   Cost
                                            (\$mln.)                              (\$mln.)

  **Assessment of  **14,686**   **8,870**   **130.2**   **11,000**    **6,900**   **76,0**
  the need                                                                        
  (units)**                                                                       

  Of which                                                                        

  New construction 900          12,000      10.2        1000\*\*      14,000      14.0

  Purchase on the  700          3,850       2.7         2500          4,000       10.0
  market with                                                                     
  HPC's                                                                           

  Housing loans    186\*        4,300       0.8         \-            \-          \-

  Housing          7311         11,400      83.5        2,000\*\*     10,000      20
  completions                                                                     

  Reinforcements   5589         5,800       32.4        5,500         6,000       33
  ---------------- ------------ ----------- ----------- ------------- ----------- ----------

\*loans to condominium associations; apparently are not targeted to
earthquake victims or households on the waiting list; number in
parentheses does not include loans to condominiums

\*\* In fact, the real number of housing construction and completions
could be larger as [some]{.underline} units would be sold for HPC's

The [alternative scenario]{.underline} for Gumri is characterized by a
[serious cut in the projected number of units to be
completed]{.underline} which are limited to remaining unfinished housing
sites in Ani and Mush 2 districts (2,479 units) of which about 80% are
assumed to be worth completing. At the same time, there is a [rapid
increase in the amount of certificates]{.underline} for purchase of
existing housing.

**Table 6.10. Vanadzor: Illustrative Investment Plan**

  ---------------- ------------ ----------- ---------- ------------- ----------- ----------
                   Government                          Alternative               
                   Program                             Scenario                  

                   \# of units  Cost per    Program    \# of units   Cost per    Program
                                Unit (\$)   Cost                     Unit (\$)   Cost
                                            (\$mln.)                             (\$mln.)

  **Assessment of  **1,952**    **6,350**   **12.4**   **1,470**     **5,450**   **8.0**
  the need                                                                       
  (units)**                                                                      

  Of which                                                                       

  New construction \-           \-          \-         100           10,000      1.0

  Purchase on the  700          3,600       2.5        900           4,000       3.6
  market with                                                                    
  HPC's                                                                          

  Housing loans    \-           \-          \-         \-            \-          \-

  Housing          638          9,200       5,9        215           9,000       1.9
  completions                                                                    

  Reinforcements   614          6,500       4,0        255           6,000       1.5
  ---------------- ------------ ----------- ---------- ------------- ----------- ----------

The alternative scenario for Vanadzor assumes a [limited amount of new
construction]{.underline} as justification for demolition of domic
settlements in the very center of the city. According to official data,
the city has about 500 units in unfinished buildings -- the alternative
scenario for the investment plan includes about 40% of those units. The
assessment of total housing need is based on the number of households
which lost their housing in the earthquake and are put on the waiting
list according to the information provided by the local administration.
The housing market in Vanadzor has the greatest capacity among the three
cities in terms of housing supply so the share of housing certificates
is the biggest both in the Government Program and in the alternative
scenario.

**Table 6.11. Spitak: Illustrative Investment Plan**

  ---------------- ------------ ------------ ---------- --------------- ----------- ----------
                   Government                           Alternative                 
                   Program                              Scenario                    

                   \# of units  Cost per     Program    \# of units     Cost per    Program
                                Unit (\$)    Cost                       Unit (\$)   Cost
                                             (\$mln.)                               (\$mln.)

  **Assessment of  **3,025**    **10,750**   **32.5**   **2,886^\*^**   **5,450**   **24.6**
  the need                                                                          
  (units)**                                                                         

  Of which                                                                          

  New construction 2,110        12,100       25.5       1,671           10,000      16.7

  Purchase on the  100          3,000        0.3        250             4,000       1.0
  market with                                                                       
  HPC's                                                                             

  Housing loans/   150          6,000        0.9        300             5,000       1,5
  Domics upgrading                                                                  

  Housing          537          9,700        5.2        537             9,000       4.8
  completions                                                                       

  Reinforcements   128          4,700        0.6        128             5,000       0.6
  ---------------- ------------ ------------ ---------- --------------- ----------- ----------

\* The assumption for the total need in the alternative scenario for
Spitak is based on the difference between official numbers of housing
units damaged by the earthquake and that of units constructed or
restored to date (3911 -- 1025 = 2886). The scenario also suggests
increasing the number of housing loans under the assumption that they
would be provided not only for new construction in the rural suburbs of
Spitak but for selected domic upgrading as well.

In total, the alternative scenarios for the three cities [imply the need
for only \$108.6 mln. compared with \$175 mln. according to the
Government Program]{.underline}. Even if the magnitudes of housing needs
remain exactly as stated in the official Government document, the sum of
need for alternative scenarios [should not exceed \$135
mln.]{.underline}

**ANNEXES**

###  ANNEX 1

### 

### Excerpt

###  from 

### The Immediate Program of the Earthquake Zone Restoration 

##### Content

#### Introduction

I.  **Analyses of the Present Situation**

II. **The Project Implementation Principles**

III. **Investments and Actions Necessary for the Implementation of the
     Program**

#### Introduction

The December 7, 1988 natural disaster covered nearly 40% of the
Republic's area, which had 1 million population. 406 residential units
were completely or partially destroyed. More than 530 thousand of people
remained homeless. 40 thousand people were taken out from the ruins, 25
thousand of who were dead.

230 industrial units (82 working places) or nearly 25 % of the
Republic's industrial potential were completely or partially destroyed.

As a consequence of the earthquake, 8.9 million sq. m. total residential
area were damaged in the cities and villages, among them 4.3 million sq.
m. of State and 4.6 million sq. m. of individual ones. Schools with
150.2 thousand seats, kindergartens with 47.5 thousand seats, 416
medical units were ruined or damaged.

The picture of the damaged housing stock, schools and medical units by
marz and large residential areas is the following.

+-------------------+-----------+-------------+---------+------------+
| Marz, residential | Housing   | Schools     | Ho      | P          |
| area              | stock     |             | spitals | oliclinics |
|                   |           | (working    |         |            |
|                   | (thousand | places)     | (Beds)  | (atte      |
|                   | km.)      |             |         | nd./shift) |
+-------------------+-----------+-------------+---------+------------+
| Disaster          | 8906.3    | 150172      | 5795    | 14880      |
| zone(total)       |           |             |         |            |
+-------------------+-----------+-------------+---------+------------+
| Among them:       |           |             |         |            |
| according to      |           |             |         |            |
+-------------------+-----------+-------------+---------+------------+
| [Shirak           | 3677.0    | 64012       | 3235    | 6630       |
| marz]{.underline} |           |             |         |            |
+-------------------+-----------+-------------+---------+------------+
| c\. Gyumri        | 2193.4    | 33900       | 2160    | 4500       |
+-------------------+-----------+-------------+---------+------------+
| c\. Artik         | 141.3     | 47.60       | 370     | 500        |
+-------------------+-----------+-------------+---------+------------+
| Amassia reg. area | 175.2     | 2300        | 130     | \-         |
+-------------------+-----------+-------------+---------+------------+
| Ani regional area | 180.0     | 4600        | \-      | 50         |
+-------------------+-----------+-------------+---------+------------+
| Artik regional    | 124.4     | 4370        | \-      | \-         |
| area              |           |             |         |            |
+-------------------+-----------+-------------+---------+------------+
| Akhourian reg.    | 618.3     | 9432        | 572     | 1480       |
| area              |           |             |         |            |
+-------------------+-----------+-------------+---------+------------+
| Ashotsk regional  | 128.6     | 4650        | \-      | 100        |
+-------------------+-----------+-------------+---------+------------+
| ## Lori marz      | 3953.4    | 61680       | 2860    | 6370       |
+-------------------+-----------+-------------+---------+------------+
| c\. Vanadzor      | 1993.5    | 23400       | 1730    | 2500       |
+-------------------+-----------+-------------+---------+------------+
| c\. Alaverdi      | 31.4      | 4320        | \-      | \-         |
+-------------------+-----------+-------------+---------+------------+
| c\. Spitak        | 281.9     | 7320        | 250     | 500        |
+-------------------+-----------+-------------+---------+------------+
| c\. Stepanavan    | 306.6     | 3800        | 380     | 850        |
+-------------------+-----------+-------------+---------+------------+
| Gougark reg. area | 312.0     | 3520        | 250     | 150        |
+-------------------+-----------+-------------+---------+------------+
| Tashir reg. area  | 155.9     | 4500        | 250     | 50         |
+-------------------+-----------+-------------+---------+------------+
| Spitak reg area   | 353.6     | 8440        | \-      | 770        |
+-------------------+-----------+-------------+---------+------------+
| Stepanavan reg.   | 200.1     | 5180        | \-      | 1500       |
| area              |           |             |         |            |
+-------------------+-----------+-------------+---------+------------+
| Toumanian reg.    | 318.4     | 1200        | \-      | 50         |
| area              |           |             |         |            |
+-------------------+-----------+-------------+---------+------------+
| ## Tavoush marz   | 832.9     | 13010       | \-      | 420        |
+-------------------+-----------+-------------+---------+------------+
| c\. Ijevan        | 116.6     | 630         | \-      | \-         |
+-------------------+-----------+-------------+---------+------------+
| c\. Dilijan       | 267.8     | 4980        | \-      | \-         |
+-------------------+-----------+-------------+---------+------------+
| Ijevan reg. area  | 346.9     | 510         | \-      | 60         |
+-------------------+-----------+-------------+---------+------------+
| Noemberian reg.   | 76.5      | 3320        | \-      | 360        |
| area              |           |             |         |            |
+-------------------+-----------+-------------+---------+------------+
| Tavoush reg. area | 25.1      | 3570        | \-      | \-         |
+-------------------+-----------+-------------+---------+------------+
| #                 | 442.8     | 11470       | \-      | 1460       |
| # Aragatsotn marz |           |             |         |            |
+-------------------+-----------+-------------+---------+------------+
| c\. Aparan        | 17.8      | \-          | \-      | \-         |
+-------------------+-----------+-------------+---------+------------+
| c\. Talin         | 63.9      | \-          | \-      | \-         |
+-------------------+-----------+-------------+---------+------------+
| Aparan reg. area  | 35.0      | 1960        | \-      | \-         |
+-------------------+-----------+-------------+---------+------------+
| Aragats reg. area | 212.4     | 3470        | \-      | 900        |
+-------------------+-----------+-------------+---------+------------+
| Talin reg. area   | 113.7     | 6040        | \-      | 560        |
+-------------------+-----------+-------------+---------+------------+

Great damage occurred to the agricultural-industrial complex. More than
80 recycling enterprises, 4 poultry farms and other industrial units
were ruined or damaged.

A significant part of the construction industrial base went out of
order. A great portion of commercial, public, food, communication,
transportation, municipal utilities and other units were damaged or
ruined.

Experience in the elimination of earthquake consequences of similar
scale shows that doing so by means and capacity of the country,
experiencing the disaster is actually not possible.

Almost all countries\' governments abroad, organizations, the Armenian
Diaspora, individual benefactors, and public associations participated
in assistance in elimination of disaster caused by Earthquake and
helping sufferers.

Together with financial aid, foreign countries have implemented
significant construction work in the disaster zone.

I.  **Analyses on Present Situation**

Aiming to eliminate the earthquake consequence the former Soviet
government adopted several decisions, foreseeing restoration of the
disaster zone with the help of Soviet Republics, ministries and
departments.

In spite of implemented works of large scale and the assistance of the
world society, the restoration program of the disaster zone was not
completed for different reasons. Since 1991, the entire burden of the
restoration implementation has actually rested on the ROA Government.

Taking into account the situation created the ROA Government adopted a
new disaster zone program (#17 decision) on October 7, 1994. The new
program clarified the volume subject to restoration and the
implementation period of specific spheres of disaster zone residents.

The program aimed to restore the damaged housing stock, as well as
educational, medical, public food, communication and transportation,
construction industry, municipal utilities and other industrial units.

Accounting for all sources of 1989-1997 financial assistance,
3.28million sq. m. of total housing area have been put into use. Schools
of 50.5 thousand seats, hospitals of 2.6 thousand beds, polyclinics with
4.2 thousand attendance/shift, as well as pre-school, industrial and
municipal units have been built.

The picture of 1989-1997 exploited units in EQZ according to marzes and
residential places is the following:

+-------------+-------------+-------------+-------------+-------------+
| Marz,       | Housing     | Schools     | Hospitals   | Policlinics |
| residential | stock       |             |             |             |
| area        |             | (working    | (Beds)      | (att        |
|             | (thousand   | places)     |             | end./shift) |
|             | km.)        |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Disaster    | 3278.4      | 50522       | 2589        | 4225        |
| zone(total) |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Among them: |             |             |             |             |
| according   |             |             |             |             |
| to          |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| [Shirak     | 1525.6      | 21032       | 1950        | 2875        |
| marz]{      |             |             |             |             |
| .underline} |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| c\. Gyumri  | 852.7       | 8544        | 1318        | 2635        |
+-------------+-------------+-------------+-------------+-------------+
| c\. Artik   | 58.5        | 2728        | 270         | 50          |
+-------------+-------------+-------------+-------------+-------------+
| Amassia     | 64.6        | 1085        | \-          | \-          |
| reg. area   |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Ani         | 68.3        | 931         | 110         | \-          |
| regional    |             |             |             |             |
| area        |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Artik       | 142.0       | \-          | 60          | \-          |
| regional    |             |             |             |             |
| area        |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Akhourian   | 233.8       | 3132        | 70          | 40          |
| reg. area   |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Ashotsk     | 105.7       | 4612        | 122         | 150         |
| regional    |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| #           | 1300        | 24747       | 590         | 1300        |
| # Lori marz |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| c\.         | 438\.       | 11696       | 110         | 650         |
| Vanadzor    |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| c\.         | 17.2        | \-          | \-          | \-          |
| Alaverdi    |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| c\. Spitak  | 91.6        | 2524        | 200         | 400         |
+-------------+-------------+-------------+-------------+-------------+
| c\.         | 90          | 2716        | 150         | 250         |
| Stepanavan  |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Gougark     | 142.9       | 782         | 60          | \-          |
| reg. area   |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Tashir reg. | 65.1        | 1292        | \-          | \-          |
| area        |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Spitak reg  | 322.9       | 2877        | 70          | \-          |
| area        |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Stepanavan  | 100.1       | \-          | \-          | \-          |
| reg. area   |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Toumanian   | 24.8        | 2860        | \-          | \-          |
| reg. area   |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| ## T        | 186.0       | 2036        | 49          | 50          |
| avoush marz |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| c\. Ijevan  | 31.9        | 1004        | \-          | 50          |
+-------------+-------------+-------------+-------------+-------------+
| c\. Dilijan | 45.6        | \-          | \-          | \-          |
+-------------+-------------+-------------+-------------+-------------+
| Ijevan reg. | 58.5        | 400         | 25          | \-          |
| area        |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Noemberian  | 31.8        | 320         | 24          | \-          |
| reg. area   |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Tavoush     | 18.2        | 312         | \-          | \-          |
| reg. area   |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| ## Arag     | 266.5       | 2707        | \-          | \-          |
| atsotn marz |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| c\. Aparan  | 9.6         | \-          | \-          | \-          |
+-------------+-------------+-------------+-------------+-------------+
| c\. Talin   | 12.2        | \-          | \-          | \-          |
+-------------+-------------+-------------+-------------+-------------+
| Aparan reg. | 96.0        | 392         | \-          | \-          |
| area        |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Aragats     | 85.8        | 779         | \-          | \-          |
| reg. area   |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| Talin reg.  | 62.9        | 1536        | \-          | \-          |
| area        |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+

Within the period mentioned, different programs (UN, Red Cross and
others) have implemented construction work in the EQZ oriented to
satisfying needs of other categorical residents (refugees, sufferers
along the boarders, and other categorically privileged people). 32
percent of already constructed total housing stock has been implemented
at the expense of private means of the population, involving not only
losers directly from the earthquake, but also other categorical
residents.

During the previous period,the Government has provided people with
apartments at higher standard. The level of provision was more high (in
terms of the number of provided apartments), than it was before the
earthquake. As a consequence, the State responsibilities in the disaster
zone, in terms of the volumes of residential construction, have not
declined proportionate to the already constructed housing stocks.

The situation is especially difficult in the cities of Gyumri, Spitak,
as well as Vanadzor and Stepanavan, in the villages of Spitak and
Akhourian regional areas. The delivery of units with comparatively small
damages is occurring. By certain reconstruction activities, the service
period of temporary dwellings and buildings has been prolonged, classes
with two session have been organized, the capacity of medical units has
been increased due to pressure, and reconstruction work of pre-school
institutions temporarily stopped.

**III.** **Project Implementation Principles**

10 years later, the situation created by the reconstruction process in
the EQZ, and improvements that are going on in the Republic create new
problems and the necessity for clarifying the reconstruction policy
appears.

The solution of housing and social issues in the region has become of
immediate concern in terms of direct state interference and resources.
The necessity appears for a differentiated approach towards EQZ cities
and villages appears.

Demographic changes in the EQZ during the passed period create new
problems that need solution. Whether the construction of ruined or
damaged schools and medical units has to be made at previous volumes is
to be determined.

In the 10-year period, many changes have been made in the assessment of
deterioration rates of non-reinforced damaged houses and buildings.

Taking into account that according to the ROA Law on \" Privatization of
State, Public and Municipal Housing Stock\" and the August 19, 1994,
#386 ROA Government Decision that the grade I, II, and III damaged
houses shall be subject to privatization (the reinforcement work of
grade III damaged houses is expected to be done at the expense of the
State Resources), a necessity of reconsideration of State
responsibilities appears. The result is to renovate only buildings that
need reinforcement (grade III damaged buildings) and construct new
apartments, to replace destroyed or subject to demolition (grade IV)
buildings.

The aforementioned and other similar problems create the necessity to
reconsider the 1994 complex program on restoration and construction
works in the disaster zone.

The new program foresees the following basic principles for the State
responsibilities towards homeless citizens:

To provide with apartments:

-   those residents displaced from units destroyed or designated for
    demolition as a result of earthquake, who are on the list
    officially,

-   homeless residents of grade III damaged, unoccupied housing units
    which are considered as State, public and municipal property .

Taking into account the specific character of village areas, the
implementation of improvement of house conditions of homeless and
residents on the waiting list, is foreseen to be achieved through giving
privatization right to non-finished structures built under the State
ownership, and also giving a long-term credit for constructing those
apartments.

In cases of a lack of sufficient land for agricultural activities in
village areas, citizens may receive an appropriate land in other places.

The immediate program of the housing restoration foresees the provision
of the implementation of State responsibilities towards homeless
families, by constructing (reinforcing), acquiring and distributing, or
giving a credit for an adequate number of apartments to replace those
damaged by the earthquake.

State responsibilities in terms of educational and medical field are
formed by the following principles:

To restore schools, hospitals and polyclinics, which

-   have been destroyed or are subjected to be demolished

-   are of grade III damage and are not being used.

The restoration of units the like (mentioned above) in the residential
areas is expected to be implemented taking into account the volumes of
earthquake damage. The restoration must not exceed normative demands,
defined for the construction of these units.

Other issues which are not involved in the immediate program, and demand
state intervention, i.e., the reinforcement of grade III damaged,
occupied units, the completion of unfinished construction units not
involved in the program, cleaning up and bringing into order houses,
subjected to be demolished, the improvement of apartment conditions, the
construction of sub-structural units and other issues, connected with
residential problems, are going to be implemented within the context of
other programs.

In accordance with the principles mentioned above, the initial basic
data are clarified, and State responsibilities towards the homeless
people (because of earthquake) are founded. It is foreseen, according to
this, to provide families of 20.605 destroyed and subject to demolition
housing units, of 5706 housing units subject to reinforcement, which are
not occupied.

IV. **Investments and Actions Necessary for the Implementation of the
    Program**

The immediate program of the total restoration, which involves all
financial sources, is expected to be implemented from 1998-2001.

Taking into account the economic expediency and existing possibilities
to solve the problem the program is expected to be implemented [through
the housing field]{.underline}

-   by occupying buildings subject to reinforcement,which are not
    occupied yet:

After occupying the aforementioned buildings (not reinforced), it is
foreseen to distribute these apartments to renters, and empty apartments
to those on the waiting list, i.e., to homeless residents of ruined and
subject to be demolished residential buildings.

The estimation of necessary capital investment for units without an
estimation cost has been made according to 50 thousand drams extended
indices of cost per sq. meter.

-   with official purchase and distribution of apartments:

Market values of apartments have been investigated through monitoring
with the help of working groups together with regional and local
governments. As a result an appraisal was assigned to a number of
apartments for sale existing in the market.

As a base for purchase estimation, indices of cost in terms of average
apartment has been adopted: in the cities, that totals 1800 thousand
drams (30 thousand drams per sq. meter total area), in the village
areas - 600 thousand drams (10 thousand drams per sq. meter total area).

-   by contributing long-term credits to build apartments:

It is foreseen to contribute long-term credit (up to 5 million drams),
connected with the existence of unfinished structures, and their degree
of completion, to build apartments in the village areas. Taking into
account the degree of completion of existing unfinished units in the
disaster zone, the appraisal of resources necessary has been made
according to an average of an estimated 3 million drams per unit for one
family.

-   with completion of unfinished housing, completing first the
    construction of those housing units that are part of one
    construction complex, and have a great degree of completion. While
    doing this the existence of intra-neighborhood engineering
    infrastructure should be accounted. It is expedient also to reduce
    the total area of apartments of unfinished housing units, which were
    designed with more than the standard area per one family, and to
    deliver additional apartments after redesigning.

-   by possessing unfinished housing units, or areas for building new
    houses, to private investors under favorable terms. The purpose is
    to deliver these apartments (after construction) to homeless
    citizens under privileged conditions (long-term rent delivering
    under privileged conditions, acquisition of apartments and so on).

-   By implementing new constructions.

The Government should have a preference for those citizens to
participate in new construction process in a prominent district (they
mean probably the old city) who are on the waiting list (1); who wish to
participate with their own resources (2); those participating with
governmental assistance (a compensation to the extent of the index of
cost of an apartment in a certain area a person is going to acquire)
(3); and finally those who wish to participate in the way of cooperation
or condominium (4).

The estimation of investment necessary (in previous four ways) for units
without estimation cost has been made according to 100 thousand drams
extended indices of cost per sq. meter total area necessary for housing
construction, as well as taking into account the degree of completion of
the unit. In the case of reconstruction of other buildings into housing,
with a purpose to estimate the expenses the extended indices of
expenditure multiplier are used.

With the help of redesigning there emerges a possibility to provide 20
percent increase in the number of apartments in the framework (range) of
existing unfinished houses. However the result is 3 percent increase in
the estimated value of units that are going to be built.

Meantime, it is expected to create necessary conditions, in order to
provide resettlement in unoccupied apartments of grade III damaged
houses.

[Through the social field]{.underline}

-   With the reinforcement of grade III, damaged unoccupied buildings,

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-   by reconstructing other buildings, schools hospitals and
    polyclinics,

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```
-   with exploitation (use) of unfinished constructions,

-   by implementation of new construction.

It is expected to allot areas from the occupied houses and other
buildings to build medical and nursing centers where needed.

The appraisal for necessary capital investments of buildings without an
estimation cost for the social field restoration has been made in
accordance with the extended indices of costs. One school (pupil) seat
in terms of new construction is 200 thousand drams; reinforcement
(change in type) - 250 thousand drams, a bed in hospitals: new
construction - 5000 thousand drams, reinforcement (change in type) -
2012 thousand drams, the attendance unit of policlinics: new
construction -750 thousand drams, reinforcement (change in type) - 400
thousand drams. In the case of the necessity to change the type of a
social sphere building the unit capacity cost of a building increases
nearly 20 percent in connection of equipment\'s (facilities) prices for
hospitals/clinics.

The volume of investment necessary for reconstruction of housing and
social units is given in the program by cost calculation (inc. redesign
expenses), according to which total volumes for investment necessary for
program implementation are estimated.

Final values of units to be built should be defined legislatively after
projecting and estimation documents are carried out, as well as orders
made (as a result of competition) for construction work.

130.2 billion drams of capital investment are expected to be contributed
during the programmed period from all sources: 1.1 billion drams shall
go for intra-neighborhood engineering network construction; 3.0 billion
drams for acquisition of apartments: 14.0 billion drams as a budgetary
long-term credit. It is also expected to restore 1,878.7 thousand sq.
meters of total area of housing units, schools with 38,153 thousand
school seats, hospitals with 1,519 beds, polyclinics with 2,050
attendance/shift.

Factually, 66 city and village areas in terms of housing construction,
as well as 95 residential areas in terms of schools, also 14 residential
areas in terms of hospitals, and 17 ones in terms of polyclinics from
406residential areas, that have suffered from the earthquake have no
solutions yet.

Annual subprograms of the 1999-2001short-term restoration program are
expected to be created in the period when annual social-economic
development programs of the ROA Government are carried out. The amount
of money necessary for measures (operations, activities) going to be
implemented at the expense of State resources should be involved in the
ROA state budget for the certain year.

# **ANNEX 2.1**

**LIST OF PRIVILEDGED CATEGORIES OF PEOPLE ELIGIBLE FOR SOCIAL HOUSING
IN THE EQZ**

By the Decision of the Council of Ministers of the Armenian Soviet
Republic and Armenian Council of Labor Unions \# 371 of July 25, 1989

*"In settlements, Citizens who suffered from the Earthquake will receive
housing in the following order of priority...":*

+---+-------------------------------------------------------------------+
| 1 | Families with a member who died in the eaqrthquake.               |
| \ |                                                                   |
| . | Families with a member disabled in the earthquake.                |
+---+-------------------------------------------------------------------+
| 2 | Large families with three and more children under 16 years old.   |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 3 | Invalids of the Great Patriotic War.                              |
| \ |                                                                   |
| . | Families of soldiers and partisans killed in the Great Patriotic  |
|   | War and other families with the same status[^19].                 |
+---+-------------------------------------------------------------------+
| 4 | Heroes of the Soviet Union, Heroes of Socialist Labor, people     |
| \ | awarded with the "Glory medals" and the medals "For Service to    |
| . | the Motherland in the Armed Forced of the USSR" of all three      |
|   | ranks.                                                            |
+---+-------------------------------------------------------------------+
| 5 | War veterans who participated in the Civil War, the Great         |
| \ | Patriotic War, and other USSR's military actions, partisans and   |
| . | other participants of the military actions to defend the USSR.    |
+---+-------------------------------------------------------------------+
| 6 | Retired military officers.                                        |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 7 | Labor invalids of first and second order.                         |
| \ |                                                                   |
| . | Military servicemen who became invalids of first and second       |
|   | order.                                                            |
+---+-------------------------------------------------------------------+
| 8 | People who suffer from an illness within the List of Illnesses    |
| \ | issued by the Order of the USSR Ministry of Health \# 330 of      |
| . | March 28,1983.                                                    |
+---+-------------------------------------------------------------------+
| 9 | Families with a member who died in State or public service, or in |
| \ | an accident at the workplace.                                     |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 1 | People who have been conscientiously working at least 15 years in |
| 0 | industry.                                                         |
| \ |                                                                   |
| . | People who have been conscientiously working at least 10 years    |
|   | under hazardous conditions within the List of Work Places Under   |
|   | Hazardous Conditions by the Order of the State Labor Committee of |
|   | #298 of October 25, 1974.                                         |
+---+-------------------------------------------------------------------+
| 1 | "Mother-Heroines" (with seven and more children).                 |
| 1 |                                                                   |
| \ | Single mothers.                                                   |
| . |                                                                   |
|   | Families with children adopted from orphantages.                  |
+---+-------------------------------------------------------------------+
| 1 | Families with twins.                                              |
| 2 |                                                                   |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 1 | Communist Party veterans (at least 50 years of membership).       |
| 3 |                                                                   |
| \ | Pensioners awarded by special pensions of the USSR and the Arm.   |
| . | SSR.                                                              |
+---+-------------------------------------------------------------------+

**ANNEX 2.2**

[LIST OF PRIVILEDGED CATEGORIES OF PEOPLE ELIGIBLE FOR SOCIAL HOUSING IN
THE EQZ]{.underline}

By the Decision of the Council of Ministers of the Armenian Soviet
Republic and the Armenian Council of Labor Unions \# 90 of Feb. 23,1990

*"In settlements, Citizens who suffered from the Earthquake will receive
housing in the following order of priority...":*

+---+-------------------------------------------------------------------+
| 1 | Invalids of the Great Patriotic War and other invalids of the     |
| \ | USSR's military actions with the same status.                     |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 2 | Orphans as a result of the earthquake.                            |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 3 | Families which lost a breadwinner and families which adopted      |
| \ | orphans.                                                          |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 4 | Labor invalids of the first order.                                |
| \ |                                                                   |
| . | Military servicemen who became invalids of the first order.       |
+---+-------------------------------------------------------------------+
| 5 | Families with an invalid of first order who became disabled in    |
| \ | the earthquake.                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 6 | Families with a member disabled from his/her childhood.           |
| \ |                                                                   |
| . | Single senior citizens. Single mothers.                           |
+---+-------------------------------------------------------------------+
| 7 | Invalids of second order.                                         |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 8 | Families with a member who died in the eaqrthquake.               |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 9 | People who suffer from an illness within the List of Illnesses    |
| \ | issued by the Order of the USSR Ministry of Health \# 330 of      |
| . | March 28,1983.                                                    |
+---+-------------------------------------------------------------------+
| 1 | "Mothers-Heroines" (with seven and more children).                |
| 0 |                                                                   |
| \ | Large families with three and more children under 16 years old.   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 1 | Invalids of third order of the Great Patriotic War.               |
| 1 |                                                                   |
| \ | Families of soldiers and partisans killed in the Great Patriotic  |
| . | War and other families with the same status                       |
+---+-------------------------------------------------------------------+
| 1 | Families with a member who died in State or public service, or in |
| 2 | an accident at the workplace.                                     |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 1 | People who have been conscientiously working at least 15 years in |
| 3 | industry.                                                         |
| \ |                                                                   |
| . | People who have been conscientiously working at least 10 years    |
|   | under hazardous conditions within the List of Work Places Under   |
|   | Hazardous Conditions by the Order of the State Labor Committee of |
|   | #298 of Oct. 25,1974.                                             |
+---+-------------------------------------------------------------------+
| 1 | Heroes of the Soviet Union, Heroes of Socialist Labor, people     |
| 4 | awarded with the "Glory medals" and the medals "For Service to    |
| \ | the Motherland in the Armed Forced of the USSR" of all three      |
| . | ranks.                                                            |
+---+-------------------------------------------------------------------+
| 1 | War veterans who participated in the Civil War, the Great         |
| 5 | Patriotic War, and other USSR's military actions, partisans and   |
| \ | other participants of the military actions to defend the USSR.    |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 1 | The Communist Party veterans (at least 50 years of membership).   |
| 6 |                                                                   |
| \ | Pencioneers awarded by special pensions of the USSR and the Arm.  |
| . | SSR.                                                              |
+---+-------------------------------------------------------------------+
| 1 | Families with twins.                                              |
| 7 |                                                                   |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 1 | In other cases forseen by the laws of the USSR and Arm. SSR.      |
| 8 |                                                                   |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+

**ANNEX 2.3**

**LIST OF PRIVILEDGED CATEGORIES OF PEOPLE ELIGIBLE FOR SOCIAL HOUSING
IN THE EQZ**

**By the Decision of RA Government #147 of 07.03.1992**

**All categories apply to *"Citizens who suffered from the
Earthquake":***

  ------ ------------------- --------------------------------------------------------------
  1\.    Invalids of first   
         order as a result   
         of the earthquake.  

  2\.    Invalids of first   
         order of the Great  
         Patriotic War.      

  3\.    Families with       
         disabled children.  

  4\.    War invalids of     
         first order.        

  5\.    Labor invalids of   
         first order.        

  6\.    Orphans (lost both  
         parents)            

  7\.    Families with at    
         least three chidren 
         under 16 years old, 
         including families  
         with:               

         7.1.                one parent died in the earthquake;

         7.2.                a member who suffers from an illness within the List of
                             Illnesses issued by the Order of the USSR Ministry of Health
                             \# 330 of March 28,1983;

         7.3                 a member who is disabled of order group;

         7.4.                a child adopted from an orphantage;

         7.5.                four and more children;

         7.6.                a war invalid of third order or a pensioneer;

         7.7.                a member who died in the earthquake;

         7.8.                a labor veteran (more than 30 years of work);

         7.9.                three children under 16 years old.

  8\.    Single senior       
         citizens.           

  9\.    Single mothers.     

  10\.   Families with       
         adopted orphans.    

  11\.   Invalids of second  
         order as a result   
         of the earthquake.  

  12\.   Invalids of second  
         order of the Great  
         Patriotic War.      

  13\.   Labor invalids of   
         second order.       

  14\.   War invalids of     
         second order.       

  15\.   Families with a     
         member who died in  
         the earthquake.     

  16\.   Families with a     
         member who suffers  
         from an illness     
         within the List of  
         Illnesses issued by 
         the Order of the    
         USSR Ministry of    
         Health \# 330 of    
         March 28,1983.      

  17\.   "Mother-Heroines"   
         (with seven and     
         more children).     

  18\.   Families with a     
         member who died     
         defending the       
         Republic of         
         Armenia.            

  19\.   Families with a     
         soldier who died or 
         is missing in       
         action in the Great 
         Patriotic War and   
         other families      
         equated to this     
         category.           

  20\.   Invalids of third   
         order of the Great  
         Patriotic War and   
         others equated to   
         this category.      
         (continued on next  
         page)               
  ------ ------------------- --------------------------------------------------------------

+---+-------------------------------------------------------------------+
| 2 | Families with a member who died in the State or public service,   |
| 1 | or in an accident at the workplace.                               |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 2 | People who have been working at least 10 years under hazardous    |
| 2 | conditions within the List of Work Places Under Hazardous         |
| \ | Conditions by the Order of the State Labor Committee of #298 of   |
| . | October 25, 1974.                                                 |
+---+-------------------------------------------------------------------+
| 2 | Heroes.                                                           |
| 3 |                                                                   |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 2 | People awarded with the "Glory medals" and the medals "For        |
| 4 | Service to the Motherland in the Armed Forced of the USSR" of all |
| \ | three ranks.                                                      |
| . |                                                                   |
|   | Large families with three and more children under 16 years old.   |
+---+-------------------------------------------------------------------+
| 2 | Soldiers who have become disabled defending the Repblic of        |
| 5 | Armenia.                                                          |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 2 | War veterans who participated in the Civil War, the Great         |
| 6 | Patriotic War, and other USSR's military actions, partisans and   |
| \ | other participants of the military actions to defend the USSR.    |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 2 | Pensioners awarded by special pensions of the USSR and the Arm.   |
| 7 | SSR.                                                              |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 2 | Families with twins.                                              |
| 8 |                                                                   |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 2 | People who have been conscientiously working at least 15 years in |
| 9 | industry.                                                         |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+
| 3 | In other cases forseen by the RA Constitution.                    |
| 0 |                                                                   |
| \ |                                                                   |
| . |                                                                   |
+---+-------------------------------------------------------------------+

# **[List of Persons Interviewed/Briefed]{.underline} ANNEX 3**

## 

##  [Central Government and other officials]{.underline}

1.  Gagik Yeganian Minister, Ministry of Social Protection

2.  Andranik Andreassian First Deputy Minister, Ministry of Urban
    Development

3.  Gagik Ananian Deputy Minister, Ministry of Statistics, State
    Register and Analysis

4.  Kamo Khachatrian Head of Housing Policy Department,

## Ministry of Urban Development

5.  Karen Grigorian Economist, World Bank Office in Armenia

6.  Michael Melkumian Seismic Inst.; Former Dir. of EQZ / MDP;

7\. Hrachya Petrossian Chief-Administrator, Ministry of Statistics,
State Register and Analysis

8\. Julliet Maglouchiants Chief of Households Department, Ministry of
Statistics, State Register and Analysis

9\. Susanna Gharibian Head of Demographic Department, Ministry of
Statistics, State Register and Analysis

10\. Vova Baghdasarian Municipal Development Project Management Unit,
Ministry of Finance and Economics

# [Non Governmental/InternationalOrganizations]{.underline}

11\. Armine Zhamkochian Director of Jimishian Foundation

12\. Gail Howard American Red Cross

# [Gyumri, Local Government Officials]{.underline}

13\. Edik Baghramian Head of Housing Department, Gyumri Municipality

14\. Levon Avdalian Head of Social Security Department, Gyumri
Municipality

15\. Artyusha Stepanian Head of Housing Stock Distribution Department,
Gyumri Municipality

# [Vanadzor, Local Government Officials]{.underline}

16. Andranik Haruotunian The Mayor of Vanadzor

17. Sona Matevosian City Architect

18\. Volodia Mashurian Special Assistant to City Administration

##### [Spitak, Local Government Officials]{.underline}

23\. Hrair Mkhitarian Head of Housing Stock Distribution Department,
Spitak Municipality

# **ANNEX 4.1**

# **[Participants in the Interim Report Presentation on the Housing Strategy in the EQZ]{.underline}**

October 29, 1998

+-----------------------+----------------------------------------------+
| **Name**              | > **Organization**                           |
+-----------------------+----------------------------------------------+
| Fuller, Donald        | > Amer.Univ. of Armenia, Vice-president      |
+-----------------------+----------------------------------------------+
| Sharoyan, Rita        | > Horizon Television                         |
+-----------------------+----------------------------------------------+
| Avetisian, Souren     | > Spitak Mayor                               |
+-----------------------+----------------------------------------------+
| Avoyan, Varazdad      | > MDPMU-Director                             |
+-----------------------+----------------------------------------------+
| Davtian, Armen        | > ROA Ministry of Finance and Economics,     |
|                       | > chief-department of capital costs          |
+-----------------------+----------------------------------------------+
| Ghoukasian, Rouzanna  | > MDPIU, expert on public connections        |
+-----------------------+----------------------------------------------+
| Baghdasarian,         | > MDPIU, Construction department engineer    |
| Vladimir              |                                              |
+-----------------------+----------------------------------------------+
| Khachatrian, Kamo     | > Ministry of Urban Development,             |
|                       | >                                            |
|                       | > Chief of Department of Housing Policy      |
+-----------------------+----------------------------------------------+
| Sahradian, Vardan     | > ROA Ministry of Finance, senior expert of  |
|                       | > department financing projects in various   |
|                       | > economic spheres                           |
+-----------------------+----------------------------------------------+
| Grigorian, Hasmik     | > TACIS project                              |
+-----------------------+----------------------------------------------+
| Petrosian, Sousanna   | > Journalist, Noyan Tapan NewsS agency       |
+-----------------------+----------------------------------------------+

**Project Team Members**: Steven Anlian, UI; Lucig Danielian, CPA;

[Contract Consultants]{.underline}: Sashur Kalashian, Haik Ayvazian,
Mnatsakan Gevorgian,

Eric Mesropian, Garik Petrosian, Hovik Iskandarian;

[CPA Research Assistants]{.underline}: Varuzhan Hoktanian, Tereza
Khorozian, Anahit Hagopian

[Translator]{.underline}: Ruzanna Gyurgian

# **ANNEX 4.2**

# 

# **[Participants\* in the Gyumri Presentation: Housing Strategy in the EQZ]{.underline}**

Dec 2, 1998

+---------------------------+------------------------------------------+
| Name                      | Organization                             |
|                           |                                          |
| Gomtsian, A.              | Shirak Marzpet                           |
|                           |                                          |
| Vardanian, M.             | Gyumri Mayor                             |
|                           |                                          |
| Poghosian, N.             | Lori Marzpet Administration              |
|                           |                                          |
| Grigorian, A.             | Vanandzor City Council                   |
|                           |                                          |
| Simonian, Zh.             | Shirak Marzpetaron                       |
|                           |                                          |
| Khachatrian, K.           | Min. of Urban Development                |
| Hagopjanian, R.           |                                          |
|                           | Chief, Gyumri Housing Department         |
| Avoyan, V.                |                                          |
|                           | Dir., Municipal Development Proj.        |
| Ghukasian, R.             |                                          |
|                           | Same                                     |
| Baghdasarian, V.          |                                          |
|                           | Same                                     |
| Duebel, A.                |                                          |
|                           | The World Bank, Washington DC            |
+---------------------------+------------------------------------------+

**Project Team Members**: Steven Anlian, UI; Alexander Puzanov, IUE

[Contract Consultants]{.underline}: Irina Vanian, Sashur Kalashian,
Garik Petrosian,

Hovik Iskandarian

\* There were many others attending from the Gyumri community-at-large,
but only the invited individuals who were present are listed here.

# **ANNEX 4.3**

# Participants in the FINAL Presentation Housing Strategy in the EQZ Dec 16, 1998

+-------------------------+--------------------------------------------+
| # **Name**              | # **Organization**                         |
|                         |                                            |
| Pirumian, F.            | Minister of Urban Development              |
|                         |                                            |
| Andreassian, A.         | First Deputy Min. of Urban Development     |
|                         |                                            |
| Machkalian, G.          | Ministry of Finance                        |
|                         |                                            |
| Gharibjanian, G.        | National Assembly                          |
|                         |                                            |
| Gasparian, V.           | Municipality of Spitak                     |
|                         |                                            |
| Khachatrian, K.         | Min. of Urban Devel., Housing Chief        |
|                         |                                            |
| Babajanian, A.          | Min. of Urban Devel., Inspec. Chief        |
|                         |                                            |
| Avoyan, V.              | Dir., Municipal Development Proj.          |
|                         |                                            |
| Ghukasian, R.           | Same                                       |
|                         |                                            |
| Baghdasarian, V.        | Same                                       |
|                         |                                            |
| Simonian, Zh.           | Shirak Marzpetaran                         |
|                         |                                            |
| Panoyan, A.             | Lori Marzpetaran                           |
|                         |                                            |
| Azizian, G.             | Hye Pet Naghgits                           |
|                         |                                            |
| Sogomonian, P.          | Same                                       |
|                         |                                            |
| Mushegain, G.           | Advisor to the President                   |
|                         |                                            |
| Haroutunian, B.         | Armenian Assembly of America               |
|                         |                                            |
| Kiesling, B.            | First Sec., US Embassy                     |
|                         |                                            |
| Avetian, D.             | USAID/ICMA, REACT Center                   |
|                         |                                            |
| Nasoyan, G.             | Same                                       |
|                         |                                            |
| Howard, G.              | American Red Cross                         |
|                         |                                            |
| Caruso, E.              | Same                                       |
|                         |                                            |
| Khachatrian, V.         | Same                                       |
|                         |                                            |
| Yengibasian, L.         | Same                                       |
|                         |                                            |
| MEMBERS of PRESS        | Hye Lour TV; "NORK" TV; "AR" TV;           |
|                         |                                            |
|                         | Mayekakhak TV; Armenpress                  |
+-------------------------+--------------------------------------------+

**Project Team Members**: Steven Anlian, UI; V. Hoktanian, G.
Khachatrian, and T. Khorzorian, CPA Research Assistants; Nune
Ghazakhetsian, UI Assistant.

[Contract Consultants]{.underline}: Irina Vanian, Sashur Kalashian,
Garik Petrosian.

**ANNEX 5**

**List of References**

1.  The Reconstruction of the Armenia Earthquake Zone Primary Program,
    Yerevan, 1988.

2.  Armenia: Human Development National Report, 1996 (UNDP).

3.  Armenia: Human Development National Report, 1997 (UNDP).

4.  Information of the Ministry of Statistics, State Register and
    Analysis of Armenia.

5.  "Informal Sector: Armenia Housing Sector and Housing Issues of the
    Earthquake Zone of Armenia" (3^rd^ Draft), (World Bank), 1997.

6.  "Final Report on the Armenia Earthquake Zone Temporary Shelter
    Census" (Armenian Relief Fund), October, 1997.

7.  "Survey of Households Income and Expenditure in Yerevan" (Center for
    Economic Policy Research and Analysis), 1997. Unpublished Interim
    Report.

8.  Housing market Monitoring in Yerevan: Armenia Real Estate
    Association Annual Report for 1996, Yerevan, 1997.

9.  Real Estate Scientific-Information Center: Housing Market in the
    Earthquake Zone (Analysis of factual data), Yerevan, 1998.

10. American Red Cross (Gale Howard): Information on the New Residential
    Construction in Gyumri and Vanadzor.

11\. Municipal Development Project office Information (construction
costs).

[^1]: Source: Governmental Program (1998)

[^2]: Unless otherwise noted, all 1996 figures used in comparisons come
    from the Living Standards Study conducted by the Social Department
    of the Ministry of Statistics in November and December of 1996. The
    recently completed UI/CPA beneficiary survey will be analyzed in the
    next phase of the project. Also, the data presented here will be
    used to project housing demand over the next five years and analyze
    housing affordability.

[^3]: Armenia has two absolute poverty measures based on a basket of
    food and non-food items. The national food line is based on the food
    component of the basket, whereas the national poverty line is based
    on both food and non-food items. The government defines the "very
    poor" as those with per capita monthly expenditures below the food
    line. It defines the "poor" as having per capita monthly
    expenditures above the food line but lower than the poverty line. At
    the end of 1996, the national poverty line was about \$25, and the
    national food line was about \$15.

[^4]: The figures from the two surveys are not exact equivalents. The
    domic survey asked for total space, which differs from the living
    space concept used in the 1996 Living Standards Study. The latter
    measure excludes kitchens and bathrooms. The upward bias of the
    domic study space variable, however, is offset to some degree by the
    design of domics, which often lack normal kitchen and bathroom
    facilities.

[^5]: Casual field observations suggest that domics situated directly
    over the location where their apartment once stood have relatively
    easy access to existing infrastructure (if the networks were not
    destroyed during the earthquake).

[^6]: Because it focuses on a narrower range of questions (i.e., those
    related to targeting efficiency), the UI/CPA survey instrument
    contains far fewer questions than the earlier World Bank instrument.
    The World Bank results are summarized in an informal sector note
    entitled, "The Armenia Housing Sector and Earthquake Zone Housing
    Issues," dated September 26, 1997.

[^7]: Technically, the UI/CPA sample is a sample of units provided
    through government programs. The units were selected without
    reference to who was occupying them. As can be seen in the following
    section, the original beneficiaries may no longer occupy the unit.

[^8]: ^(\*)^ This figure is currently calculated by the Ministry of
    Statistics, State Register and Analysis of Armenia

[^9]: ^\*T^he source is the Primary Earthquake Zone Reconstruction
    Program, Yerevan, 1998.

    Symbol (-) means not available data

[^10]: ^\*^ Symbol (-) means not available data

[^11]: ^\*D^ata of the Table are presented by Municipal Development
    Project office based on the real construction costs of structures
    built in 1994-1997. These costs do not include infrastructure
    construction costs.

    > Symbol (-) means not available data.

[^12]: In fact, collection of primary data was mostly
    enterprise-related. The enterprise administration and trade union
    leaders documented the cases of their employees and presented the
    completed lists to the local authorities. Households of unemployed
    were registered through the employment offices, and the remaining
    single pensioner and other remaining families, solely under social
    protection, were registered through municipalities. The local
    authorities did not check primary data, nor make sample surveys in
    order to identify whether a family had been missed during
    registration.

[^13]: need urgent repair - 6000 domics

    dilapidated - 1000 domics

[^14]: Among them, 3,500 are in municipal possession

[^15]: 1,664 families within 15 categories.

[^16]: Targeting of Social Assistance. The PAROS-2 project. Ministry of
    Social Security of the RA. Yerevan, 1996.

[^17]: Further analysis is based on this survey.

[^18]: Survey of household incomes and expenditures in Yerevan, 1995-96.
    CEPRA, AUA, Yerevan.

[^19]: War veterans included veterans of the Great Patriotic War (Second
    World War) and the USSR's military actions abroad such as in Angola
    and Afganistan.