July 12, 2012: The Russian government is trying to find out who is making a fortune with thousands of homes provided for the families of career soldiers during the Cold War. This is yet another mysterious situation arising out of the difficult transition of the Russian military from the Cold War era "Red Army" to the much smaller armed forces of the Russian Federation.

Reducing and reforming the Russian military has been difficult and has produced a lot of corrupt practices. That's how we got to the mystery over who actually owns many the of homes built for military families. Since the number of people in the military has shrunk 80 percent in the last two decades, there should be a lot of surplus military family housing. In fact, there isn't. This arises from a common practice during the Soviet period (1921-91) when factories, universities, and organizations of all sorts established separate towns or neighborhoods for their employees. These were literally "company towns" as was sometimes found in the West, especially during the 19th century. These towns contained housing, schools, utilities, shops and municipal services. The owning organization provided the money to pay for all this.

When the Cold War ended and a lot of the state-owned "companies" these company towns belonged to were sold off or went bankrupt. At that point the company towns were found to be very valuable. That's because there had always been a housing shortage during the Soviet period, and now you could charge whatever the market would bear for whatever housing you could get possession of.

Most of the military company towns were not sold off, despite repeated orders from the government to do so. What actually happened was that many unneeded military towns were taken over by retired officers. Several hundred thousand officers were forced to retire after 1991, and letting them stay in their military housing seemed like a prudent solution to a potentially explosive situation. This was often done without consulting with government departments in charge of selling off surplus property. Most of the retired officers, and their families, had no place to live if they were evicted. Most of the retired officers were not being replaced because the units they served in had been disbanded. Military bases, adjacent to their company towns, were easy to sell off, as the government ordered. But no one wanted to be responsible for tossing retired officers, and their families, out into the street. These guys were being paid tiny pensions and were pretty poor already. So the government chose to simply look the other way as many retired or fired officers were allowed to remain in their homes.

But now it's become widely known that a lot of this military housing is occupied by the children of the retired officers or someone else entirely. While the retired officers did not own the housing they were living in, housing was still in short supply and tenants were easy to find for this housing. You were technically breaking the law living there and could find yourself evicted if the government ever got around to actually selling off these company towns.

Eventually, there will be very few retired officers (or their elderly widows) left living in this military housing, but politicians are daring each other to "clean up the mess" and at least take back the houses inhabited by civilians. It's doubtful if the government will ever dare to move against the retired officers. Some things are still, more or less, sacred in Russia. But Russian politicians are still being criticized for not selling off this surplus military housing, which no one wanted to admit was not really surplus.