Although most urban land is not privatized, an active market for buildings has developed. Privatized enterprises generally have ownership rights to the buildings they occupy and in many cases have been able to lease unneeded space to other businesses. In addition, millions of Russian citizens have become owners of their apartments through laws adopted in 1991, and apartments are now being bought and sold. In addition, significant markets for apartment leases have developed in Moscow and St. Petersburg, and leasing generally occurs without government interference. Despite the progress made in Russian land reform so far, the security of people's rights to land and their ability to freely use and transfer these assets in response to market conditions are still stifled.
Several factors contribute to the problem.
First, rights of private possession, use, and alienation of land are inadequately defined and not clearly protected in the law. In the United States, the system of private land rights developed over a period of two hundred years. In Russia, by contrast, almost no tradition of private land rights exists, so the procedures and customs for protection and use of land rights must be created from scratch. Also, because the Soviet system controlled almost all decisions regarding land, many Russian lawmakers and advisors continue to believe that the law must dictate what transactions are allowed and prohibit the rest. Accordingly, Russia will need to develop a detailed set of rules on the rights of private land owners and others to conduct land transactions.