Managing Common Property in Russian Cities: An Economic Analysis of Homeowners Associations

Abstract

Performance of Russian homeowners associations (HOAs) could serve as a litmus test for the Russian societys capacity for self-organization. Efficiency of Russian HOAs is gauged in the paper by using the stochastic frontier technique. The variation of obtained performance indexes reflects observed HOA successes and failures. HOA are shown to be a superior alternative to municipal management of common property in residential housing only if there is a sufficient stock of a special kind of social capital - technical civic competence - in the community of tenants. Lack of social capital and insufficient competition between management companies prevent Russian HOAs from fully realizing their potential.