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Assessment of the Impact of Transparency and Affordability of Technological Connection on the Developer's Decision on New Construction in Russian Cities

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  • Oleg O. Smirnov

Abstract

Technological connection of new construction facilities to public infrastructure is one of the key sources of financing for urban infrastructure. It is assumed that in order to attract developers, it is important for cities to have affordable and transparent procedures for technological connection. The purpose of the study is to substantiate the impact of the affordability and transparency of technological connection procedures on the developer's decision on new construction in Russian cities. The scientific hypothesis is that these characteristics should have an impact mainly on the cost indicators of building construction. As part of the study, 152 regulatory documents (decrees, orders, etc.) were analyzed for resource-supplying organizations in 85 regional centers of the constituent entities of the Russian Federation. Based on these data, a methodology for assessing the level of transparency of tariff decisions in the field of technological connection is proposed, and calculations of the cost of technological connection (affordability level) to heat supply, water supply and sanitation systems are attached. Correlation analysis is used to identify the relationship between the characteristics of affordability and transparency with key indicators of housing construction. It is shown that in cities with a population of up to 100 thousand people, and from 500 thousand people and above the cost of technological connection are relatively similar. The lowest connection fees are in cities with a population of 250,000 to 500,000 people. Separately, the discrepancy between the high volumes of construction in cities with over one million people and the low level of transparency of payment for technological connection in them is highlighted. It was also found that the higher the connection cost, the higher the cost and profitability of construction, as well as the price per square meter, and with increased transparency, the profitability of construction also increases. The theoretical significance of the work lies in the development of a methodological approach to assessing the effectiveness of technological connection practices. The practical significance of the work lies in the classification of problems in the field of technological connection and the assessment of their impact on housing construction, which allows us to raise the question of the need to create a unified information system in the field of technological connection.

Suggested Citation

  • Oleg O. Smirnov, 2023. "Assessment of the Impact of Transparency and Affordability of Technological Connection on the Developer's Decision on New Construction in Russian Cities," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(2), pages 355-380.
    • Handle: RePEc:aiy:jnjaer:v:22:y:2023:i:2:p:355-380
    DOI: http://dx.doi.org/10.15826/vestnik.2023.22.2.015
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    More about this item

    Keywords

    utility connection; tariff regulation; utility infrastructure; heat supply; water supply; sanitation.;
    All these keywords.

    JEL classification:

    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General
    • L99 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Other

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