Raising Funds Through Multiple Channels and Involving Multiple Entities: Urban Renewal in Super Large Cities
Urban renewal has always been a crucial aspect of the high-quality development process of large and medium-sized cities. Recently, the Ministry of Housing and Urban-Rural Development announced that very large and megacities in China are actively promoting the transformation of urban villages. This renovation will be carried out in three categories: demolishing and building new buildings that meet the conditions, carrying out regular renovation and improvement, and implementing a combination of demolition and renovation.
Urban villages in China face various common problems, such as high public health and safety risks, numerous hidden dangers in house safety and fire safety, backward supporting facilities, and dirty and poor environments. Hence, they are in urgent need of transformation. In July of this year, the General Office of the State Council issued the “Guiding Opinions on Actively and Steadily Promoting the Transformation of Urban Villages in Super-Large and Mega-Cities”. Localities are now actively formulating supporting policies, identifying the number of urban villages, and preparing transformation project plans in accordance with the government’s deployment. The Ministry of Housing and Urban-Rural Development’s Urban Village Renovation Information System has already included 162 urban village renovation projects in its database over the past two months.
Chen Xiao, a senior analyst at the Zhuge Data Research Center, stated that there are eight megacities in China, including Shanghai, Beijing, Shenzhen, Chongqing, Guangzhou, Chengdu, Tianjin, and Wuhan, as well as Hangzhou and Zhengzhou. These cities have a permanent population of over 5 million and serve as important driving forces for national development. However, these cities also face challenges such as high living costs and a mismatch between housing supply and demand. The promotion of urban village renovation in these megacities is not only significant for improving housing conditions but also for stimulating the demand for commercial housing purchases.
Urban renewal in very large and megacities plays a vital role in improving people’s livelihoods, enhancing living quality, and enhancing the overall appearance of the city. Wen Shuyue, senior director of Savills North China, highlighted that Beijing, being one of the first pilot cities for urban renewal under the Ministry of Housing and Urban-Rural Development, has gained valuable experience through various explorations. The previous model of large-scale construction as the leading factor in urbanization is gradually coming to an end, and the urbanization process is now emphasizing both incremental and stock factors. In order to promote high-quality urban development, it is essential to transform urban development and construction methods and address urban renewal challenges within the current legal framework.
Wen Shuyue also emphasized the need to update and improve the existing renovation and development model, as the large-scale demolition and construction approach is no longer sustainable. This includes clarifying the participants and related interest relationships of urban renewal, identifying sources of urban renewal funds, implementing fiscal measures, and coordinating the disposal of materials, space, and environmental problems. The professionalism of post-maintenance and operation also requires urgent improvement.
Funding for urban renewal has always been a focus in the industry. The Ministry of Housing and Urban-Rural Development stressed the importance of utilizing multiple funding channels for renovation. In addition to funds from the city government, social funds will also be introduced, and banking financial institutions will provide policy support and commercial loan assistance.
Beijing, as a leading city in urban renewal, has continuously explored and improved coordination mechanisms and completed the top-level design of urban renewal. The implementation of the Urban Renewal Regulations earlier this year has established a multi-subject joint participation mechanism in Beijing. This mechanism leverages the advantages of different market players and provides policy support for the conversion of commercial service industry usage. It also explores financial incentive mechanisms, strengthens financial and taxation policy innovation, and enhances the participation of social capital in existing commercial real estate. Additionally, for the first time, a flexible land allocation method has been proposed, allowing for more flexibility in land use during the urban renewal process.
Overall, the transformation of urban villages in super large cities is a significant step towards improving people’s lives, enhancing living quality, and beautifying the urban landscape. With multiple entities and funding channels involved, these cities aim to promote high-quality urban development while ensuring sustainable and efficient urban renewal.