With its property prices fluctuating wildly, Shanghai has been
designated as a testing ground for a more centralized, and
hopefully more effective, vertical land administration system.
This is part of a series of moves, taken last week by central
government agencies, to help regulate the land and housing market.
It follows public outcry at rising housing prices in major cities
and shady deals in the real estate market.
The Ministry of Land and Resources last week pledged to rebuild
its administrative system according to the central bank model,
namely by delocalizing a certain number of regional bureaus (nine
in the ministry's case) reporting directly to its central office in
Beijing.
At the same time, the Ministry of Construction, another key
regulator of the market, openly reprimanded 10 land developers and
related firms for trying to defy industry rules.
The central government urged all cities to turn over housing
development programmes before the end of the year, well before the
deadline set in the middle of next year.
Starting from January 2007, according to a central government
decision also adopted last week, inspection teams will be
dispatched nationwide to evaluate current policy
implementation.
In the case of the Ministry of Land and Resources, the other
eight bureaus to be established will be in Beijing, Shenyang,
Nanjing, Jinan, Guangzhou, Wuhan, Chengdu and Xi'an. These will
form a nationwide regulatory network with Shanghai.
The ministry's Shanghai bureau is commissioned to oversee land
issues in Shanghai, along with those in Zhejiang and Fujian
provinces, with an emphasis on Ningbo and Xiamen, two coastal
cities which have also seen rapid housing price rises.
But setting up all nine regional bureaus will be, according to a
ministry official who did not want to be named, "a gradual
process." There is no need, he told China Daily, to set up all of
them at one time.
For the last couple of years, Beijing has tried a plethora of
ways to slow down investment in fixed assets (of which housing is a
major item) and to control illegal activities in land-related
business deals.
But until recently, land supervision seemed to have many
loopholes. In order to attract business investment, many tracts of
land involved only small payments or scrapped land-use fees
altogether according to the ministry's Vice-Minister Li Yuan.
The regional bureaus, whose directors will all be appointed by
and answer directly to the ministry, will supervise the legitimacy
of all local government major land-use plans. They will report to
Beijing all breaches of land-use regulations, and recommend
measures of redress.
Since mid-2006, one policy after another has been rolled out to
stabilize the land and housing market. In July, an increase in the
down payment rate for commercial housing was seen across the
board.
In early November a regulation issued by the ministry, to be
effective as of January 1, 2007, doubled the acquisition price of
arable land for urban development projects.
The shortage of land is felt most acutely in Shanghai with the
economic hub’s per capita amount of land is one twentieth of the
national average.
According to the Shanghai municipal government, the city is
exploring new ways to strengthen land control and management. It
plans to introduce stricter land regulation and make better use of
available land.
(China Daily December 4, 2006)