Indemnificatory and Comfortable Housing Project

Background Information

As a national central city, Guangzhou is blessed with a time-honored history of over 2,200 years. Covering a total area of 7,434.4 square kilometers, Guangzhou is home to a household population of 8.06 million people and a residential population of 12.7 million (according to statistics from the end of 2010). In 1985, the per-capita residential space of Guangzhou was 6.62 square meters. A total of 11,642 households subsisted under the line of 2 square meters per person. Under such circumstances, it was a matter of urgency for the municipal government to resolve the housing issue in Guangzhou. In 1986, Guangzhou initiated the project of indemnificatory and comfortable housing.

Since the policy of reform and opening up was launched, Guangzhou has scored remarkable achievements in its economic development. Over the past decade, the economy of Guangzhou has grown at an annual rate of 13 percent on average. In particular, the GDP of Guangzhou exceeded 1 trillion yuan, making Guangzhou the third largest city on the Chinese mainland in terms of economic aggregate. With an accelerated urbanization process, a booming economy, a society under transformation and a massive inflow of people, it is imperative for Guangzhou Municipality to vigorously promote the indemnificatory and comfortable housing project. By implementing this project, the municipal government can meet the housing needs of its residents, ensure housing equity, reduce the cost of living in Guangzhou and improve the attractiveness and core competiveness of the city. 

Goals of the Initiative

We have conducted a survey on housing demand in Guangzhou and designed the principle of “supplies being based on housing demand”. Between December 2007 and March 2008, Guangzhou conducted a citywide survey on the housing conditions of low-income families, with the objective of drawing a clear picture of low-income families’ need for housing. Through the survey, we identified a total of 77,177 households eligible for indemnificatory housing. We set goals that should be realized in the period leading up to the end of 2012. By the end of 2011, Guangzhou successfully provided indemnificatory houses to the 77,177 households registered as eligible beneficiaries of the project, one year ahead of schedule. On top of this, Guangzhou carried out another survey on the inventory and the demand of indemnificatory houses between November 2011 and April 2012.The survey was designed to develop a clear picture of indemnificatory housing inventory and demand and to provide reliable data for scientific planning of indemnificatory housing construction. As the survey was completed, competent scientific research institutions were tasked with analyzing the demand for indemnificatory housing on the basis of the survey data. Through the survey, we accumulated a large amount of first-hand reliable data on the inventory of indemnificatory houses in Guangzhou, the status of these houses and the housing demand of various social groups. As such, much groundwork has been laid for the scientific planning and implementation of the indemnificatory housing project in Guangzhou.

Parties and Partners to the Initiative and Resources Used for Implementation

The Housing Security Office of Guangzhou Municipality constitutes the main party in charge of the indemnificatory and comfortable housing project, mainly responsible for formulating and implementing policies related to the project. In the process of implementation, banks provide loans to meet the financing needs of the project. Enterprises and social organizations can engage in the construction of indemnificatory houses and buildings. Property management companies provide property management services for the households living in indemnificatory housing communities. Volunteer organizations can enter the communities and provide voluntary services to the residents, free of charge.

The resources used for implementing the initiative include:

The resources used for implementing the project are divided into two categories, namely, land and finance, both of which are contributed by the municipal government. In 2011, 240 hectares of land was allocated for the project of indemnificatory and comfortable housing, 4.7 times larger than the amount of 2006. In 2011, the municipal government set aside RMB 5.751 billion yuan (including RMB 745 million yuan of subsidy from the central government) for the project, which represented an increase of 14 times compared with the total amount in 2006. The massive input of land and finance by the municipal government helps guarantee the smooth implementation of the project.

Innovation for the Initiative

The project is considered to be evolutionary in nature.

•Land allocation – an innovative measure, which is to reserve land specifically for indemnificatory housing. We set up a regulation that explicitly stipulates the separation of land for real estate development from land for indemnificatory housing. In this sense, Guangzhou becomes the first city on the Chinese mainland to have ever reserved land specifically for indemnificatory housing construction. Between 2009 and 2011, land plots covering a total area of 6.5 square kilometers were reserved for indemnificatory housing, 2.5 square kilometers of which had been used for indemnificatory housing construction. In addition, Guangzhou is also the first city in Chinese mainland to have drafted a municipality-level 12th Five-Year Plan for indemnificatory housing land reservation. According to this Five-Year Plan, over 8 square kilometers of land should be reserved for the construction of indemnificatory housing. This plan performs two functions: helping Guangzhou scientifically to optimize the structure of land plots for indemnificatory housing; laying a solid foundation for the sustainable and effective supply of land for indemnificatory housing in Guangzhou during the 12th Five-Year Plan period. 

•Design – developing environmentally-friendly and low-carbon indemnificatory houses by employing green building technologies. From project approval to planning, from project design to construction, green new technologies and materials are employed every step of the way. The objective is to achieve economy in dwelling size design, use construction materials that are environmentally friendly and develop low-carbon apartment buildings that are energy-efficient. 

•Construction – execute target management featuring “control in four aspects and guarantee in one aspect”. Strict control is exercised over project safety, quality, progress, investment and clean governance. Standardized operation is executed in such key aspects as construction quality and safety, contractual capital management and project progress control. Auditing supervision is exercised throughout the entire process. Cross-section control is also carried out. 

•Distribution – adopt the system of multiple rounds of evaluation and open distribution. Eligibility evaluation is conducted on household applicants for indemnificatory housing by relevant authorities. Households that pass the preliminary round of evaluation enter the next round. The evaluation principle can be summarized as “people centeredness and priority given to economically-strapped families”. The system of “two-level evaluation and public disclosure” is strictly implemented, coupled with the system of pre-distribution evaluation. Centers of examination on the economic status of residents have been put in place and have been put into operation on September 15, 2012. Transparency and public disclosure of information is assured concerning the following seven aspects: distribution policies, distribution target households, distribution housing sources, distribution procedures, distribution process, distribution results and exit conditions. The program is also subjected to extensive supervision from all quarters of society.

•Management – implement point-deduction management in indemnificatory housing communities and strengthen follow-up management. Point-deduction management is executed over 26 aspects related to the safety, civility atmosphere, sanitation and apartment utilization in indemnificatory housing communities. The objective of implementing such a style of management is to help community residents cultivate a good sense of public civility and good residential behaviors. A variety of measures have been undertaken to cope with and punish illegal occupancy and use of indemnificatory houses, such as all-coverage household surveys, irregular inspections, setting up work stations in indemnificatory housing communities, opening voice inquiry systems, establishing tip-off mailboxes, opening service windows and entrusting third-party organizations (law firms) to conduct independent investigations.

By drawing strengths from the successful model of point-deduction management that Hong Kong exercises in its public housing system, Guangzhou has put in place a point-deduction management mechanism for its indemnificatory housing communities. Moreover, Guangzhou has creatively established an incentive mechanism. Evaluation is carried out on indemnificatory housing communities, indemnificatory building committees individual households every two years on a regular basis. Rewards are presented to communities, committees and individual households that score great achievements in implementing the Point Deduction Measures. Rewards are given in the forms of premiums, certificates of honor, certificates of merit and public commendation in notices.

Guangzhou has profusely learned from the advanced experience of Hong Kong, Singapore and Chongqing in developing new towns with favorable environment where public transport facilities are full-fledged. Guangzhou has set up a systematic mechanism concerning the selection of sites and land for indemnificatory housing, one that encompasses three principles and eight requirements. Under the strategic guidance and coordination of the original plan, as things stand today, land plots covering 5 square kilometers have been laid out for indemnificatory housing. Among them, several land plots covering a total area of 1.3 square kilometers have been put to use for the construction of indemnificatory housing. Most of the projects comply with the site-selecting principle. As a result, the structure of indemnificatory housing in Guangzhou has been optimized, with the quality standard for the projects gradually enhanced. 

Obstacles and Solutions for Innovation

With the deepening of the indemnificatory housing projects, we face mounting pressure in terms of land, capital and human resources.

•To ensure sufficient land supply for indemnificatory housing projects, Guangzhou a land reservation mechanism featuring “municipality – district coordination, with district governments as the main driving force”. Effort has been continuously made to expand the sources of land for indemnificatory housing by implementing the following measures: putting idle land to the best use, soliciting land of collective ownership through a variety of creative compensatory means, encouraging enterprises to utilize their own reserved land and designating land plots in commercial housing communities for the construction of indemnificatory housing. The principle of “satisfying the needs of all citizens eligible for indemnificatory housing” is observed.

•To ensure sufficient capital for indemnificatory housing projects, the municipal government of Guangzhou has increased its fiscal input. As things stand today, 13 percent of the yearly net profit from land lease should be used for the construction of indemnificatory housing, up by 3 percent compared with the original 10 percent. In addition, a proportion of premiums from land lease should also be used for the construction of indemnificatory housing. Meanwhile, effort has been exerted to explore the possibility of setting up financing platforms and expanding financing channels.

•To strengthen the working mechanisms for indemnificatory housing, we have set up a special leadership group, which is headed by the mayor of Guangzhou. The leadership group is tasked with coordinating the implementation of all indemnificatory housing projects of the city. Housing security organizations have been set up at the levels of municipality, districts and streets. “Green passages” with optimized procedures for the approval of indemnificatory housing projects have been set up to facilitate construction.

Outcomes and Assessments

Outcomes achieved are as follows:

Since 1986 when the indemnificatory housing program was initiated, remarkable progress has been achieved. By the end of the 11th Five-Year lan period, 225,000 out of all 2.08 million households in the ten districts under the jurisdiction of Guangzhou have lived in welfare houses in the form of public houses, houses for financially-difficult households, affordable houses and low-rent houses. The housing conditions of the people have been significantly improved. Per-capita residential space in urban areas has greatly increased from 6.62 square meters (equivalent to 9.93 square meters of floorage) in 1985 to 22.2 square meters (equivalent to 33.3 square meters of floorage) in 2011.

In line with the socio-economic development trends, the CPC Committee and the People’s Government of Guangzhou Municipality have set up a multi-layer housing supply system of Guangzhou characteristics. The system can be described as “low-end houses as guarantee, medium-end houses as mainstay and high-end houses as market-oriented commodities”. The overarching objective is to ensure that every citizen can live in comfortable houses. By far, over 150,000 indemnificatory apartments are available in Guangzhou. Per-capita housing space in urban areas has reached 22.2 square meters (equivalent to 33.3 square meters of floorage).

Assessments are as follows:

•Starting from 2010, the People’s Government of Guangzhou Municipality has, for three consecutive years, listed “intensifying the construction of indemnificatory houses” as one of the ten important tasks that bear on the well-being of Guangzhou residents. This task has been written into the Report on the Work of the Government, and supervision over the progress of the project is conducted on a monthly basis.

•Letters of responsibility concerning indemnificatory housing constructions are signed at national, provincial and municipal levels each year, which explicitly stipulate how many indemnificatory houses to be constructed on a yearly basis. Inspection and evaluation is carried out to see to it that the pre-set goals are realized.

•Letters of responsibility are signed each year between the municipal government and governments at county and district levels. Specific tasks and targets concerning indemnificatory housing construction are delegated and regular inspections are conducted.

Methods Applied

To ensure that resources of indemnificatory housing are distributed in a way that fully meets the basic housing demand of low-income households, Guangzhou has designed the principle of “supplies being based on housing demand”.

In 2007, Guangzhou conducted a citywide survey on the housing conditions of low-income households, through which 77,177 households were identified as eligible for indemnificatory housing. Meanwhile, archives and information management systems have been established to record data concerning these 77,177 eligible households. By the end of 2011, Guangzhou successfully provided indemnificatory houses to the 77,177 households registered as eligible beneficiaries of the project, one year ahead of schedule. This symbolizes that the indemnificatory housing project of Guangzhou has entered a new stage.

In 2010, Guangzhou conducted a survey on the housing conditions and demand of the sandwiched class. A series of data concerning sandwiched-class households in need of indemnificatory housing has been determined, which serve as basic reference for public rental housing systems, standards, planning and construction.

In 2011, Guangzhou conducted a citywide survey on the inventory of indemnificatory houses. Another survey on the demand for indemnificatory houses was conducted, which mainly targeted five eligible groups (low and medium-income households, migrant workers, new university graduates looking for work, high-caliber personnel and reallocated residents). 

Benefits to Other Cities

In September, 2010, Guangzhou became the first city in Chinese mainland to have ever exercised the management model of point deduction. Jinshazhou Community was selected as the pilot zone for this management model. Since the model of point-deduction management was put into execution, a total of 91 rule-breaking cases were detected and handled, 81 cases of minor severity, two cases of moderate severity (four points deducted), six cases of severity (six points deducted) and two cases of extreme severity (20 points deducted). Indemnificatory houses rented by the two households that broke the rules with extreme severity were reclaimed by relevant authorities according to regulations.

The pilot program of point-deduction management has attracted support from the vast majority of community residents of Jinshazhou, as it plays a positive role in facilitating the security, civility and harmony of the community. Cities of brotherhood have sent representatives to Guangzhou to learn from this model of management. Even journalists from Spain have come to Jinshazhou to conduct extensive coverage of the program.