Recent developments in Chinese housing

Recent developments in Chinese housing

HABITATINTL.Vol.lS,No.3,pp. 19-24.1991. 0197-3975/91$5.00 Printed in Great Britain. + 0.00 @ 1992 Pergamon Press plc Recent Developments Chinese...

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HABITATINTL.Vol.lS,No.3,pp.

19-24.1991.

0197-3975/91$5.00

Printed in Great Britain.

+ 0.00

@ 1992 Pergamon Press plc

Recent Developments Chinese Housing* LIN ZHIQUN Ministry of Construction,

in

China

DEVELOPMENT FEATURES OF TWO PERIODS

Since the founding of the People’s Republic of China, housing development in China has turned out different features which can be divided into two periods: from 1949 to 1978, and from 1980 to 1989. The first period included the first Five-Year-Plan Period (1954-1958), the second Five-Year-Plan Period (19591963)) 1964-1965, the third Five-Year-Plan Period (1966-1970), the fourth FiveYear-Plan Period (1971-1975), and the first three years of the fifth Five-YearPlan Period (1976-1980). During these 30 years, China’s total urban housing completion reached 467 million sq. m, with an annual completion of new housing area of 15.57 million sq. m, and a total housing investment of 36.916 billion Yuan, which averaged 1.23 billion Yuan per year. From an overall historic point of view, this period is characterised by the following: l With large-scale economic construction, and the requirements of socialist industrial development, many residential buildings and residential districts were built in new cities and in new districts of existing cities within an urban planning framework. This unprecedented large-scale housing development provided for the working people an improved living environment which facilitated social production and improved their daily life. l On the basis of reference to housing design experiences from the Soviet Union and other East European countries, and taking into consideration the actual conditions of China, such as a large population but relatively little cultivated land, limited resources of steel and cement, and the hardly developed new building material industry, we devoted our main efforts to developing appropriate technologies, including clay brick and lightweight prefabricated concrete components. We formed thereby many building systems for urban housing development, the most widely promoted being brick-and-concrete multi-storeyed buildings. These building systems enjoyed plentiful material sources, easy construction, and the buildings themselves were economical and practical, having a good performance, and suitable both to the technical levels of domestic building industry and to the fundamental needs of people’s life. l To guarantee that workers could have fundamental housing when the State instituted low-wage policies yielding little difference in people’s incomes, a lowrental urban housing system was established, according to which housing construction was carried out by the State. Work units, workers and staff members were allotted housing. This system, similar to social welfare in character, succeeded in providing a significant guarantee to solve the people’s living problems, when China’s economy was far from advanced, and the national distribution system imperfect. l From an overall point of view, however, owing to the impact of political movements and political guidelines, housing development was not given due ‘This paper was originally presented at the UIA International in Transition, Beijing, China, 27-30 November 1989.

19

Symposium

on Asian Cities and Architecture

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Lin Zhiqun

attention in this period. The investment level remained low, and the total investment in urban housing of the 30 years occupied only 0.78% of the GNP (Gross National Product) over the same period. This, plus investment in housing in rural areas (there were no statistics available of rural housing investment which could hardly be more than the investment in urban housing), took the total housing investment of the whole society to about 1.5% of GNP, far less than the 3.0% proposed by the United Nations. l Housing development saw many ups and downs. Housing completion in 1959 reached 32.46 million sq. m, about 208% of the average annual completion for the 30 years; yet, in 1962, housing completion was 7.68 million sq. m, only 49% of the average. During the 5 years from 1965 to 1970, the average annual completion was 10.80 million sq. m, only 69% of the average. Fluctuations existed not only in figures, but also in quality standards: there was a period of “rational design but irrational use”, and a period which stressed “simple construction” and “low standard”. o Rural housing was hardly an item on the State agenda. In the macroclimate, when rural economic development was abnormal, it was quite natural that farmers had difficulty in building or renovating houses solely with their own financial and material resources. The second period was from 1979 until today. The general situation of this period was in line with the new historic era starting from the 3rd Plenary Session of the 11th Congress of the CPC, when the economic reform and open-door policy and political rectification were formulated. The main features of this period include: l Contrary to past practice, the housing issue began to receive due attention. The State, enterprise and individual all devoted great efforts to tackling the problem of housing. In 1979 and 1980, matters began to show signi~cant changes: the State and enterprise invested in urban housing 7.728 billion and 12.009 billion Yuan, occupying 1.99 and 2.77% of the years’ GNP, respectively. Housing development in rural areas saw a completion.of 0.1 billion sq. m in 1978, but it shot up to 0.4 billion and 0.5 billion sq. m in 1979 and 1980, respectively. According to estimation, investments of the whole society in these two years were roughly 4 and 5.5% of the respective year’s GNP, approximate to the target of 5% proposed by the UN for housing investment in developing countries. l Since 1981, housing development in both urban and rural areas has kept on a trend of high investment ratio and large-scale development. From 1981 to 1987, housing investment of the whole society was 29.575, 35.711, 41.610, 46.561,64.163,72.935 and 87.206 billion Yuan, occupying 6.39,7.09,7.39,6.89, 7.70, 7.71 and 7.89% of the respective year’s GNP. Housing completions in urban and rural areas reached 694.44, 714.59, 865.40, 758.20, 909.72, 1176.67, and 1076.87 million sq. m, respectively, in those years. Completion in urban areas was 116.61, 138.30, 140.90, 147.18, 187.80, 193.02 and 193.13 million sq. m, totalling 1.11694 billion sq. m in the seven years, averaging 159.56 million sq. m per year, co~esponding to 1025% that of the previous 30 years’ average. Such high investment ratios and large-scale developments rank high, not only in the developing countries but also in the whole world. o During the years after 1981, the vitalisation of the urban and rural economy promoted a continuous increase in the scale of individual home-building. In county towns and townships, individual home-building sharply increased. From 1981 to 1987, rural home-building in successive years was 557.40,942.01,695.94, 578.38, 695.42, 944.68 and 855.24 million sq. m, whereas individual homebuilding in urban areas was 18.75, 20.41, 25.21, 40.36, 63.07, 72.35 and 82.94 million sq. m in the seven years, respectively. Urban individual home-building already occupied 16.11, 14.76, 17.89, 27.42, 33.58, 37.48 and 42.95% of the

Recent Developments

in Chinese Housing

21

respective year’s total housing completion in urban areas. In the period from 1982 to 1985, individual home-building in county towns and townships was 14.04, 17.34, 30.38 and 49.34 million sq. m, occupying 68.79, 64.47, 75.29 and 78.23% of the respective year’s total individual home-building in urban areas. This trend continued in 1986 and 1987. In the seven years from 1981 to 1987, individual home-building already occupied 82.97, 78.71, 83.33, 81.16, 83.38, 86.43 and 87.12% of the housing completion of the whole society. l After 1984, with the carrying out of comprehensive development in urban areas, sales of commodity housing began. In recent years, the development of commodity housing had been included in national economic and social development planning. It means not only that the end product of the building industry has been acknowledged by the whole society as a commodity, but that sales of commodity housing have promoted the revitalisation of the real estate market which died out soon after the founding of PRC, and which now begins, as a key element in production, to function in the market system during the primary stage of socialism. As the expenditure on infrastructure and graded rents for urban land have been included in the price of commodity housing, today’s price concept of housing and its actual structure are different from what they were in the period of production economy. l These urban housing system reforms were put forward in 1980. After theoretical exploration of housing needs, it has been widely recognised that, despite the commodity attribute of housing, welfare policies can still be applied to some social strata. The imperative of urban housing reform has become deeprooted in people’s minds, after a variety of reform schemes had been carried out in pilot cases. Significant schemes include: to sell public housing to individuals while subsidising two-thirds of the price; to issue housing coupons while raising rents (such as on the Yantai pattern); and to sell public housing to individuals at favourable prices without issuing subsidies. The latter two schemes are widely influential in the scheme and implementation of reform in many places in China. l Starting in 1982, the State Science and Technology Commission, the State Planning Commission and the State Economic Commission organised hundreds of experts to discuss and work out, on the basis of past experiences, “Guidelines of Technical Policy Concerning Urban and Rural Housing Development .” The guidelines were endorsed by the State Council in 1986. The target was incorporated in policy that, by the year 2000, each urban and rural household will have an economical and practical housing unit with an average living floor areaper capita in urban areas of 8 sq. m, a little less than that in rural areas. Also included in the policy were guidelines concerning the control of construction standards; conservation in land use, comprehensive development of residential districts with complete support infrastructure, speeding up the retrofitting of existing housing stock, and promotion of locally efficient building systems.

POLICY

ISSUES

For the past 40 years, especially the last 10 years, China’s housing development has undoubtedly had great achievements. However, to overcome its shortcomings and make further progress, we must do some research into some existing policy issues and work out corresponding policies. (1) Completely different housing systems are to be practised in urban and rural areas. Under the present system, the State has no control over rural housing, the land use, material sources, and construction of which are all seen to by the farmers themselves. In urban areas, workers or staff members, especially those working for State-owned enterprises, are entitled to turn to the factories or institutions where they are employed for housing. Viewed from the benefit IWE 15:3-c

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Lin Zhiqun

relations between the individual, the State and society, the housing system in urban areas is far more favourable to individual residents than in rural areas, and is itself a great attraction for farmers to obtain formal urban residence certificates. This “urban privilege”, from a long-term point of view, is to be done away with, not by having the State and society oversee the farmers’ housing development, but by emulating the urban housing system, while bringing into full play the initiative of individual residents. Meanwhile, the State and government should include rural housing issues in their emphasis on agriculture, and organise technical personnel from urban areas to help put into practice their accumulated experience - including rural planning, raising design quality, developing appropriate technologies for rural building materials and components, and organising the rural people to carry out comprehensive development with complete infrastructure. Rural housing is a market with great potential, substantial measures of which should be gradually explored. (2) The urban housing system has so much of a welfare component in it that it has provoked an excessive demand for housing, as people are only too willing to have large living floor area at very low rent. This has rendered family consumption structures abnormal: lO-20% of the people’s expenses should have been spent in housing, however, with the quasi-welfare housing system, they have been directed to the purchase of daily consumer goods. Meanwhile, it has brought about an ineffective overall control over housing standards. What is surprising to many foreign experts is that the average floor area of housing units in China has already reached more than 50 sq. m, and even 60-70 sq. m in some cases, a standard higher than that of Hong Kong, whose average GNP per capita is dozens of times higher than in mainland China. The gravity of the situation is that many people seem to be unaware of this, and even some high-ranking responsible officials do not see the situation as abnormal. Another negative consequence is the great extremes of content and discontent. The First Nationwide Urban Building Census, launched in 1985, showed that the average living floor areaper capita was 5 sq. m in Shanghai, 18.9Oh of its total households having an average living floor area per c~pita of only 0.37 sq. m, but 12.2% having 15 sq. m. Such sharp contrasts do not exist in Shanghai alone. (3) The urban housing system reform has been slow in progress (as Tables 1 and 2 indicate), the reasons being as follows: l The reform schemes have been changed time and again, loosely interrelated with and even contradictory to one another, which has been detrimental to our determination to reform. * Despite the fact that housing reform has a significant impact on the national economy, and people’s livelihoods, it has not yet been included in the whole economic reform. l The planning, economy, finance, wage, price and other economic decisionmaking agencies have not actively participated in housing reform. o There has not been an overall long-term reform scheme, or plans for its periodical implementation, drawn up by the above-mentioned agencies. o There has not been formed an investment system, wage system, financing system for housing production and consumption, price system for consumption component indexes, statistic system for resident income, etc. Without these support reforms in related fields, it will be very hard for housing reform to proceed smoothly. (4) Overall decision-making on housing development should be enhanced. From 1981 to 1987, the average urban and rural housing input made up 7.29% of GNP. (If added to the values of housing consumption, this figure would well exceed 10.) However, the economic decision-making agencies have not succeeded in overall control of such a significant factor in the national economy, including supervision control and adjustment over investment scale in the whole

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Recent Developments in Chinese Housing Table I. Statistics of investment and completion of housing development: 1950-1987

Year

Investment (billion Yuan)

Completion (million sq. m)

Year

1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969

0.125 0.258 0.448 1.127 0.923 0.664 1.336 1.329 0.816 1.367 1.589 0.767 0.417 0.759 1.159 0.991 0.921 0.533 0.566 1.104

15 15 1.5 13.42 13.27 14.46 25.23 28.16 26.42 32.46 29.79 13.77 7.68 10.09 15.34 17.28 5415 541.5 5415 5415

1970 1971 I972 1973 I974 1975 1976 I977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 I989 1990

Investment (billion Yuan)

Completion (million sq. m)

0.808 1.453 1.884 2.089 2.251 2.397 2.284 2.63 3.921 7.728 11.166 11.119 14.105 12.507 13.45 21.518 18.941 18.124

5415 18 27.3 27.05 25.69 27.69 24.2 28.28 37.52 62.56 82.3 79.04 90.2 81.25 77.03 95.65 89.15 68.9

Source: China Fixed Asset Investment Statistics fI950-19851, China Statistical Almanac (1987, 1988).

Table 2. Comprehensive statistics of national housing development: 1981-1987

Total investment on housing development (billion Yuan) Housing completion (million sq. m) Investment source: State investment (billion Yuan) Completion (million sq. m) Collective investment (billion Yuan) Completion (million sq. m) Individual investment (billion Yuan) Completion (million sq. m) Investment area: Urban investment (billion Yuan) Completion (million sq. m) Rural investment (billion Yuan) Completion (million sq. m) Of which: Rural individual investment (billion Yuun) Completion (million sq. m)

1981

1982

1983

1984

198.5

1986

1987

29.575

35.711

41.610

46.561

64.163

72.935

87.206

694.44 13.163 93.43 1.181

714.59 16.991 111.28 1.859

865.40 16.706 107.79 1.885

758.20 16.887 99.10 3.027

POP.72 24.851 115.86 3.058

1176.67 24.285 110.94

1176.97 25.697 100.66

3.252

3.792

24.86

40.89

36.46

40.36

35.37

48.70

38.31

15.231

16.861

23.019

26.647

36.254

45.398

57.717

576.15

14.923 116.61 14.652 577.83 14.075 557.40

562.42

19.091 138.30 16.620 576.29 15.683 542.01

721.515

19.375 140.90 22.235 724.50 21.454 695.94

618.74

20.819 147.18 25.742 611.02 23.938 578.38

758.49

31.481 187.80 32.682 721.83 31.315 695.42

.1017.02

32.721 193.02 40.224 983.65 38.856 944.68

938.18

36.821 193.13 50.385 883.84 48.721 855.24

Source: China Fixed Asser Investment Statistics (1950-f985], China statistical Almanac ($987, 1988).

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Lin Zhiqun

society, establishment and implementation of overall housing standards, and preferential economic and financial policies applied to social strata of different levels of income. Only when our work in this respect is effective can we overcome the setbacks of the present system which is neither economically efficient nor representative of social equity.