Hard bricks and soft power: on the geopolitical importance of the Russian property empire

A 2008 election poster, showing Vladimir Putin (Russia's president, 2000-8, 2012-) and Dmitry Medvedev (president, 2008-12), behind the double-headed eagles which symbolised Imperial Russia. Image:Getty.

Over the past three decades, real estate has gained a new significance on the world stage, as many states have relaxed laws to open up national property markets to international buyers.

This has not only intensified international business activities: it's also offered states a new way of pursuing their global political ambitions. In particular, Russia – perhaps better known for its use of “hard” tactics such as military interventions – has proven to be an adroit user of this “soft” power tool.

In Russia, real estate emerged as a marketable good in the early 1990s, when large-scale privatisation transferred ownership titles from the state to tenants. Initially, because of the political and economic turmoil involved in Russia’s transition from a one-party state to democratic republic, there was little international interest in the country’s property market.

But all this changed in the early 2000s. The election of Vladimir Putin as president, together with institutional reforms that increased transparency and rising oil prices, worked to initiate a period of political stability and economic growth. Foreign investors and capital flocked to Russia to tap into the markets there.

At the same time, Russian investors and state institutions also invested in and built real estate abroa – primarily in former members of the Soviet Union, but also as far afield as Namibia.

These two processes – driven by foreign actors in Russia, and by Russians abroad – created a complex network of relationships and dependencies, which continue to affect the way international relations are negotiated today.

Doing business

The importance of real estate is particularly visible in the opposition between Russia and the rest of Europe over Ukraine. Foreign companies in Russia that own fixed assets such as offices, factories and retail facilities are obviously interested in the economic and political stability of the state. And their interests can directly affect negotiations between international powers.

Merkel – bowing under pressure? Image: Maxense Peniguet/Flickr/creative commons.

For example, German retailer Metro – which owns large shopping centres in Russia – actively opposed the sanctions imposed on Russia in 2014, arguing that such measures would hurt their business.

It is believed in the business community that this kind of pressure has played a big role in preventing Germany’s Merkel government from supporting tougher measures against Russia. Foreign business with stakes in Russia often act like indirect and informal lobby groups, representing Russia’s interests in their native nations.

Leverage in London

The investments of Russians abroad has also shaped the state’s approach to international politics. For example, Russian investment in residential real estate in cities like London is very popular, and gives the Russian state a certain influence in these places.

The strong presence of Russian wealth in London – worth £27bn, or 0.5 per cent of international assets in the city – is considered by some to be a factor in Britain’s stance towards Russia.

This was demonstrated by a confidential report – photographed in 2014 – which suggested that Britain should not support the EU’s trade sanctions against Russia or close London’s financial centre to Russian citizens. Although the EU’s sanctions were still implemented, Britain’s initial reluctance to support them can at least partly be attributed to the presence of Russian capital in London.

Show of strength

The power of real estate can be symbolic, as well as financial – as shown by the international expansion of the Russian Orthodox church. Since the 2000s, the church has purchased numerous properties around the world.

High profile members of the Russian political elite – including Putin himself – have linked the expansion of the Russian Orthodox Church to the project of the “Russian World”. This is the idea that Russian civilisation is a community which spans beyond the country’s current territorial borders.

This has been interpreted by some experts as an attempt by the Russian administration to “gain hold over Russian émigré communities”. For example, French officials have been criticised for smoothing the way for a new Russian Orthodox church in the centre of Paris, with one anonymosu diplomat declaring it to be a “symbol of Russian power”.

All hail. Image: Kvoloshin/Flickr/creative commons.

Russia has also sought to project its power through mega-projects such as sport stadia, urban regeneration schemes and new infrastructure. For example, developments in Sochi for the 2014 Winter Olympics were overwhelmingly realised by companies that were either government controlled or financially dependent on state-owned banks. By deploying the state’s resources in this way, Russia sought to highlight its power and ability to get things done.

Word of warning

But while real estate has offered another way for Russia to pursue its national interests abroad, it has also created new vulnerabilities, which competing states can exploit. For example, the EU and US have restricted Russia’s access to some of its properties abroad, to pressure Russia over Ukraine.

The heavy presence of Russian capital and real estate interests in Ukraine itself is another source of vulnerability: since 2014, Ukrainian radicals have regularly attacked branches of Russian retail banks.

The outflow of Russian capital abroad also presents the country with a serious problem: that is, the erosion of tax revenues, investments and – perhaps most importantly – an educated workforce.

So, real estate abroad is more than just an economic process: it has become a “soft” power tool for states to influence each other, adding a new layer of complexity to international politics.The Conversation

Mirjam Büdenbender is a PhD Candidate at the Katholiek Universiteit of Leuven, and Oleg Golubchikov a senior lecturer in human geography at Cardiff University.

This article was originally published on The Conversation. Read the original article.


Urgently needed: Timely, more detailed standardized data on US evictions

Graffiti asking for rent forgiveness is seen on a wall on La Brea Ave amid the Covid-19 pandemic in Los Angeles, California. (Valerie Macon/AFP via Getty Images)

Last week the Eviction Lab, a team of eviction and housing policy researchers at Princeton University, released a new dashboard that provides timely, city-level US eviction data for use in monitoring eviction spikes and other trends as Covid restrictions ease. 

In 2018, Eviction Lab released the first national database of evictions in the US. The nationwide data are granular, going down to the level of a few city blocks in some places, but lagged by several years, so their use is more geared toward understanding the scope of the problem across the US, rather than making timely decisions to help city residents now. 

Eviction Lab’s new Eviction Tracking System, however, provides weekly updates on evictions by city and compares them to baseline data from past years. The researchers hope that the timeliness of this new data will allow for quicker action in the event that the US begins to see a wave of evictions once Covid eviction moratoriums are phased out.

But, due to a lack of standardization in eviction filings across the US, the Eviction Tracking System is currently available for only 11 cities, leaving many more places facing a high risk of eviction spikes out of the loop.

Each city included in the Eviction Tracking System shows rolling weekly and monthly eviction filing counts. A percent change is calculated by comparing current eviction filings to baseline eviction filings for a quick look at whether a city might be experiencing an uptick.

Timely US eviction data for a handful of cities is now available from the Eviction Lab. (Courtesy Eviction Lab)

The tracking system also provides a more detailed report on each city’s Covid eviction moratorium efforts and more granular geographic and demographic information on the city’s evictions.

Click to the above image to see a city-level eviction map, in this case for Pittsburgh. (Courtesy Eviction Lab)

As part of their Covid Resource, the Eviction Lab together with Columbia Law School professor Emily Benfer also compiled a scorecard for each US state that ranks Covid-related tenant protection measures. A total of 15 of the 50 US states plus Washington DC received a score of zero because those states provided little if any protections.

CityMetric talked with Peter Hepburn, an assistant professor at Rutgers who just finished a two-year postdoc at the Eviction Lab, and Jeff Reichman, principal at the data science research firm January Advisors, about the struggles involved in collecting and analysing eviction data across the US.

Perhaps the most notable hurdle both researchers addressed is that there’s no standardized reporting of evictions across jurisdictions. Most evictions are reported to county-level governments, however what “reporting” means differs among and even within each county. 

In Texas, evictions go through the Justice of the Peace Courts. In Virginia they’re processed by General District Courts. Judges in Milwaukee are sealing more eviction case documents that come through their courtroom. In Austin, Pittsburgh and Richmond, eviction addresses aren’t available online but ZIP codes are. In Denver you have to pay about $7 to access a single eviction filing. In Alabama*, it’s $10 per eviction filing. 

Once the filings are acquired, the next barrier is normalizing them. While some jurisdictions share reporting systems, many have different fields and formats. Some are digital, but many are images of text or handwritten documents that require optical character recognition programs and natural language processors in order to translate them into data. That, or the filings would have to be processed by hand. 

“There's not enough interns in the world to do that work,” says Hepburn.

Aggregating data from all of these sources and normalizing them requires knowledge of the nuances in each jurisdiction. “It would be nice if, for every region, we were looking for the exact same things,” says Reichman. “Instead, depending on the vendor that they use, and depending on how the data is made available, it's a puzzle for each one.”

In December of 2019, US Senators Michael Bennet of Colorado and Rob Portman of Ohio introduced a bill that would set up state and local grants aimed at reducing low-income evictions. Included in the bill is a measure to enhance data collection. Hepburn is hopeful that the bill could one day mean an easier job for those trying to analyse eviction data.

That said, Hepburn and Reichman caution against the public release of granular eviction data. 

“In a lot of cases, what this gets used for is for tenant screening services,” says Hepburn. “There are companies that go and collect these data and make them available to landlords to try to check and see if their potential tenants have been previously evicted, or even just filed against for eviction, without any sort of judgement.”

According to research by Eviction Lab principal Matthew Desmond and Tracey Shollenberger, who is now vice president of science at Harvard’s Center for Policing Equity, residents who have been evicted or even just filed against for eviction often have a much harder time finding equal-quality housing in the future. That coupled with evidence that evictions affect minority populations at disproportionate rates can lead to widening racial and economic gaps in neighborhoods.

While opening up raw data on evictions to the public would not be the best option, making timely, granular data available to researchers and government officials can improve the system’s ability to respond to potential eviction crises.

Data on current and historical evictions can help city officials spot trends in who is getting evicted and who is doing the evicting. It can help inform new housing policy and reform old housing policies that may put more vulnerable citizens at undue risk.

Hepburn says that the Eviction Lab is currently working, in part with the ACLU, on research that shows the extent to which Black renters are disproportionately affected by the eviction crisis.

More broadly, says Hepburn, better data can help provide some oversight for a system which is largely unregulated.

“It's the Wild West, right? There's no right to representation. Defendants have no right to counsel. They're on their own here,” says Hepburn. “I mean, this is people losing their homes, and they're being processed in bulk very quickly by the system that has very little oversight, and that we know very little about.”

A 2018 report by the Philadelphia Mayor’s Taskforce on Eviction Prevention and Response found that of Philadelphia’s 22,500 eviction cases in 2016, tenants had legal representation in only 9% of them.

Included in Hepburn’s eviction data wishlist is an additional ask, something that is rarely included in any of the filings that the Eviction Lab and January Advisors have been poring over for years. He wants to know the relationship between money owed and monthly rent.

“At the individual level, if you were found to owe $1,500, was that on an apartment that's $1,500 a month? Or was it an apartment that's $500 a month? Because that makes a big difference in the story you're telling about the nature of the crisis, right? If you're letting somebody get three months behind that's different than evicting them immediately once they fall behind,” Hepburn says.

Now that the Eviction Tracking System has been out for a week, Hepburn says one of the next steps is to start reaching out to state and local governments to see if they can garner interest in the project. While he’s not ready to name any names just yet, he says that they’re already involved in talks with some interested parties.

*Correction: This story initially misidentified a jurisdiction that charges $10 to access an eviction filing. It is the state of Alabama, not the city of Atlanta. Also, at the time of publication, Peter Hepburn was an assistant professor at Rutgers, not an associate professor.

Alexandra Kanik is a data reporter at CityMetric.