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This article probes the financial and legal implications of Russian enterprise housing divestiture from the perspective of municipalities and enterprises. Since the early 1990s, the federal government mandated that privatizing enterprises divest their housing stock to local authorities. While enterprises, the federal government, and the international donor community were eager to implement the divestitures, local governments feared the financial burden of accepting the stock. The authors use interviews with enterprise directors and local government officials in three Russian cities to determine the bottlenecks in the divestiture process. The report concludes with a general assessment and recommendations for containing the immediate costs to cities.