Relationship of Housing Construction in the Moscow Urban Agglomeration and Migration to the Metropolitan Area

Abstract

Housing construction in the Moscow urban agglomeration is the main incentive mechanism for migration inflow via the lowering of such important barrier as housing prices. There is a positive feedback between the extensive development of the Moscow urban agglomeration and migration inflow to the metropolitan area, leading to hyperconcentration of population and economic activity. Theoretical analysis has shown that there is an equilibrium ratio between the new housing supply and the net migration into the Moscow metropolitan area. Empirical evidence shows that the ability of the Moscow urban agglomeration to accumulate migration in the 2000s at the respective rate of construction fell by half compared to the 1990s. Migration inflow is mostly contributed by extensive model of agglomeration development and urban sprawl due to the dominance of large-scale economy-class construction projects on unoccupied lands in a 30-km zone between the Moscow Automobile Ring Road (MKAD) and the Moscow Small Ring Road (MMK). The construction in this zone is a key regulator of the migration balance in the Moscow urban agglomeration and at the national level. Extensive development is subsidized by regional and federal budgetary investments, including transportation infrastructure, which contradicts state efforts to mitigate interregional inequality through fiscal redistribution.