In a free market economy, with the absence of rent control, the cost of housing, as of all other goods, is determined by supply and demand. Characteristic of the USSR and the result of its economic system, which abolished private ownership of land and nationalized two-thirds of all urban housing, is the absence of a free market in the field of housing relations.
The role of the state, as the owner and operator of urban housing, continues to increase. As the largest and, in fact, the only builder of large scale housing, the state also assumed the function of distributing the dwelling space among the different groups of the population, as well as the function of regulating all questions brought out through its involvement in the housing problems of its citizens.