Yeltsin Acts to Provide Homes and Counter Scams

President Boris N. Yeltsin, adding a touch of populism Friday to his free-market reforms, announced steps to provide millions of Russians with new homes and to protect them from ruin by financiers promising fabulous returns on their savings.

“It is an impermissible situation whereby the majority of the population cannot afford to buy an apartment,” he told a Kremlin news conference. “Every individual has to be given a chance.”

Under a flurry of presidential decrees, public housing projects stalled by lack of government funds will be auctioned off to private investors to spur construction.

The revenue will underwrite a broad program of credits, subsidies and vouchers to help Russians pay for the new homes.

More than 10 million Russians are on years-long waiting lists for public housing. Many are waiting in communal apartments, hostels, army barracks, school buildings and shantytowns unfit for human habitation. Many young people live with parents long after growing up and starting their own families.

Yeltsin said that from now on, “any young person getting a job” will immediately receive a credit to buy or build a home--up to 70% of the cost. “And then, as everywhere in the civilized world, he will have 30 years to repay.”

Such credit possibilities are untested on a large scale in Russia, 2 1/2 years into Yeltsin’s post-Communist reforms, so the program will be government supervised.

If it works, officials say, the construction boom could fuel a recovery of the slumping economy.

Relatively few in Russia have benefited so far from the reforms, under which the government has freed prices and sold off most state-owned enterprises.

Yeltsin admitted Friday that nearly half of all Russians now live near or below the poverty line.

But looking back on the last year--in which he disbanded the hostile Supreme Soviet, crushed its armed defenders with a tank assault, won voter approval of a new constitution and oversaw the election of a new, somewhat less hostile Parliament--he claimed to have achieved political stability.

“A new political reality has been formed in this country,” Yeltsin said. “The principle ‘All power to the soviets’ has become invalid. . . . We now have an opportunity to focus our efforts on creative activities, on alleviating economic and everyday problems of common people.”

Besides the housing shortage, Yeltsin complained about the proliferation of unregulated investment funds, quasi-banks and joint stock companies that promote get-rich-quick schemes on the airwaves, ad pages, billboards and telephone lines.

Officials say the number of scam victims is easily in the hundreds of thousands, and their losses run to the tens of millions of dollars.

Yeltsin signed a decree imposing a truth-in-advertising ethic on such investment companies, under pain of losing their licenses.

From now on, the firms must disclose the size of dividends paid during the previous year and refrain from making claims about future profitability.

“You can promise the public only what you have in reality,” Yeltsin warned.

Yeltsin’s wide-ranging news conference was held on the eve of a three-day holiday marking Russia’s 1990 declaration of independence from the Soviet Union. It also marks the end of his third year through a five-year presidential term. The 63-year-old leader looked fit and feisty.

He predicted that the country’s long industrial recession will hit bottom next month.

He said he will travel to the Greek island of Corfu to sign a partnership with the European Union if an agreement is reached before the June 24-25 meeting.

Under the proposed deal, European nations would phase out quotas on many Russian exports and replace them with tariffs.

To meet one of Europe’s conditions, Yeltsin signed a decree Friday allowing foreign banks gradual entry into the Russian market.

The measure lifts a restriction he imposed last November at the request of Russian bankers that said foreign banks operating in Russia could serve only foreigners.