9 prestige of living in the center; third, by the large share of older tenants, who privatized their apartments so as to be able to bequeath them; and, fourth, by the relatively higher educational level of people living in the center.

In the past few years, as the scale of privatization has become narrower, the high-income groups have become more active than other income groups. The greatest changes in the attitude towards housing privatization occurred among the highest-income group, which indicates that privatization now has a larger role to play as a way of dealing with the housing problem and gaining access to the housing market.

On the whole, privatization has thus far produced a class of owners that is far from uniform. Half of them are households who may well be interested in a further improvement of their housing situation and who can be expected to join the housing market. The other part, pensioner households, are at the opposite end. They have low incomes, a larger part of their lives is already over, and they are unlikely ever to move from their apartments and to become actively involved in market processes. Most of them privatized their housing with just one end in view-leaving it to children or grandchildren.

A substantial share of the owners of privatized housing consists of persons who, given their low income levels, are entitled to housing subsidies. Since Russian law does not allow for discrimination on the basis of property ownership, the limited means available to the fiscal system will have to be extended to the privatized stock at the same time that the purpose of privatization was just the opposite-to alleviate the load borne by the state.

A problem also exists at the other end of the income scale. The municipalities still lease housing to a large part of the above-average income group. For this income group housing is a pressing concern that could motivate them to turn to market methods. At present higher-income households that are not satisfied with their housing conditions do not see much sense in privatization and are biding their time before exercising their right to privatize their residences. Sociological surveys (Guzanova, 1994) show that it is this category that is extremely eager to own dwellings, including expensive country houses. Their seemingly "indifferent" behavior during privatization does not mean that they are opposed to private ownership of housing; rather, under current housing policy they have practically no opportunity to obtain better dwellings. As a result, privatization cannot help them. In the meantime, under other circumstances private housing could become a springboard for the purchase of new dwellings. However, there is no clearly defined procedure that would facilitate such purchases. Mortgage credits are, for all practical purposes, non-existent. Confidence in realty companies is low. And the taxation of the sale and purchase of housing does nothing to promote the housing market (Nozdrina, 1995).

As a result, the rates of housing privatization in small towns recently exceeded those in Moscow, where the process took off earlier, the share of private housing is slightly over 40%/o, and privatization has not appreciably progressed in the last year. The reason is probably the fact that the housing market is out of reach for most people living in big cities: the prices are too high, and supply is too low.

The high rates of privatization of housing in smaller towns show, or so we believe, that their residents have broader opporunities to improve their housing situation (we deal with this issue in more detail in the Section 2). Residential mobility in such towns is indeed high and, in contrast to Moscow, is typical of all income groups, which indicates normal exchange of housing between poor and wealthy families. Also important are the more affordable prices (as compared to Moscow), as well as a wider choice of suitable dwellings (apartment or house).

Of note is the link between housing privatization and housing maintenance and rental reform. A typical feature of provincial towns is the presence of inconvenient housing stock (some of it municipal or enterprise-owned, and some of it privatized) with correspondingly low maintenance and utilities payments. In Gorodets, for instance, rent varies within a wide range. As housing payments rise rapidly, many households can no longer afford them. One way for the poor to solve this problem is to move to lowerquality dwellings after selling their original apartments in more desirable, more expensive locations and