GOVERNMENT : With Public Buildings Occupied Rent-Free, Russia Is Losing Millions

It hardly seems like much of a prize, this sagging concrete building with broken windows, crumbling brick and an ill-fitting, dented metal door. But as soon as Zinieda Yefimovskaya saw it, she wanted it.

So she marched right in and took it.

Sure, the building belonged to someone else--the municipal education department, in fact. Yet it was empty. And Yefimovskaya figured she had as much a right as anyone to use it.

In Russia’s chaotic property market, as it turned out, she did.

Although Yefimovskaya has not paid a ruble in rent for more than three years, the education department lets her run a shelter for abused and runaway girls in the cavernous building. She said they even encouraged her to move in, after a deserted school she had illegally commandeered filled up with other squatters.

Only recently have officials grumbled about ousting her--and then only because they dislike the way she runs the shelter.

“It’s not a question of rent,” said Vladimir A. Sovalev, vice chairman of the education department. “If everything going on in the shelter was absolutely proper, no one would want her out of the building. No one would bother her at all.”

That hands-off attitude toward managing public property has cost the Russian government plenty.

Interior Minister Anatoly S. Kulikov estimates that the federal treasury lost $20 million last year by failing to collect rent from firms camped out in government buildings.

On the city level, no one has tallied the revenue lost when squatters take over municipal properties, such as the former college dormitory now known as the Yefimovskaya Shelter for Girls.

To be sure, the Yefimovskaya Shelter is too run-down to fetch a premium price as office space.

But with its grandly sweeping staircase and hall after hall of rooms, it has the potential to attract investment as a fixer-upper. And St. Petersburg, like most Russian cities, could certainly use the cash.

Yefimovskaya, however, considers her work at the shelter payment enough for use of the building.

Taking care of 45 high-school dropouts, former prostitutes and teen mothers should count for something, she said. After all, if she didn’t feed and clothe the girls, they would probably be roaming St. Petersburg’s streets, burdens and menaces to society.

Such reasoning infuriates real-estate renovator Igor P. Dobrovolsky, who has long urged the government to squeeze all possible value out of its property holdings.

“If everyone paid for the space they occupy, the budget would have enough money to take care of every social need,” Dobrovolsky said.

In a survey commissioned by officials in Moscow, Dobrovolsky found that 40% of the space along a stretch of the capital’s prestigious Tverskaya Street was occupied illegally.

Rather than negotiate with government landlords, he said, tenants had struck private deals with bureaucrats--paying bribes to keep their rent low or evade it altogether.

Dobrovolsky released the results of his survey a year and a half ago, hoping to stir up indignation. It didn’t work.

Though he offers no statistics, he believes that Moscow is still being cheated of “huge” sums.

Bridling at criticism that they squander city resources, officials in St. Petersburg and Moscow insist that they have no problems with deadbeat tenants. They say they maintain strict control over public property.

Yet in Moscow, an advisor to the municipal housing department acknowledged that poor planning has allowed squatters to commandeer some valuable real estate.

In the early 1990s, in the first rush of privatization, the Moscow government ordered some buildings vacated to prepare them for renovation and sale.

Once the properties stood empty, officials belatedly realized that they lacked the money to fix them up, housing advisor Aleksei A. Guralnik said.

While bureaucrats bickered about what to do next, freeloaders slipped into vacant buildings and set up shop.

“Unfortunately,” Guralnik said of the city plan, “it was a very disorganized process.”

Like any landlord, the government does have the right to boot out illegal squatters.

“But of course, it’s not that easy,” Guralnik said.

Russian courts operate so slowly and ineffectively that lawsuits seem a waste of time. And police tend to view eviction as a landlord responsibility.

So tenants who organize resistance usually gain the upper hand.

Yefimovskaya seems to have beaten back attempts to evict her, at least temporarily, by simply refusing to budge.

To keep the shelter running, Yefimovskaya sells gloves and stuffed animals that her girls sew during their morning work hours, before their school day begins at 1 p.m. She also scrounges for donations, hitting up humanitarian aid organizations and local entrepreneurs.

The girls she cares for share Yefimovskaya’s determination to remain in the converted dormitory.

The building is chilly and the lighting is dim, but the rooms are cheery, decorated with hand-painted murals and cluttered with toys, books and maps.

“We’ve made this building nice, and we’re going to stay here,” said 17-year-old Anya, who fled to the shelter from abusive parents.

“I wouldn’t have any idea where to live if we couldn’t live here,” 19-year-old Lena added, as she jiggled her infant son on her shoulder. “I consider this my home.”

Simon was recently on assignment in St. Petersburg.