Where does the money come from?, Ministry of Housing and Urban Rural Development to explore the establishment of a housing pension system | Housing | Housing | Housing
According to China Construction Daily, on the afternoon of June 26th, Ni Hong, Secretary of the Party Group and Minister of Housing and Urban Rural Development of the Ministry of Housing and Urban Rural Development, met with a delegation led by Ge Haijiao, Secretary of the Party Committee and Chairman of Bank of China, to exchange ideas on deepening government bank cooperation and promoting high-quality development of housing and urban-rural construction.
Ni Hong pointed out that we should encourage and guide financial institutions to participate in urban construction and renewal, and promote the creation of livable, smart, and resilient cities. To build good houses for the people, improve the quality of housing, explore the establishment of a housing pension system, and provide full life cycle safety guarantees for houses.
Among them, the "housing pension system" attracts attention, so what is the "housing pension system"? Where does "housing pension" money come from and what is its role?
What is the "housing pension" system?
The "housing pension" system is not the first time it has been proposed.
The housing pension system is considered as an institutional arrangement for the government to reserve housing safety funds. The background of its proposal is the safety hazards caused by the aging of existing housing, but the existing special maintenance funds for residential buildings are difficult to meet the needs of housing maintenance and renovation.
According to a report by Architecture Magazine, during this year's Two Sessions, Chai Qiang, a member of the National Committee of the Chinese People's Political Consultative Conference, a real estate appraiser, and the president of the Chinese Association of Real Estate Brokers, presented a proposal on establishing a housing pension system as soon as possible to ensure the safety of people's housing. He pointed out that currently, the maintenance of existing housing in China mainly relies on special maintenance funds for residential properties or self raised funds by homeowners. For a single residential community, the scale of collected funds is generally only 6-9 million yuan or even lower. With the aging of houses and their ancillary facilities and equipment, the demand for maintenance funds is increasing year by year, and the maintenance funds in some residential communities are rapidly decreasing or even drying up. The existing special maintenance funds for residential buildings are far from meeting the demand for "all that needs to be repaired". Its suggestion is to establish a housing pension system, which can provide financial support for the establishment and operation of the housing safety management system, and better fulfill the government's responsibility for housing public safety.
According to the official website of the Standing Committee of the People's Congress of Jiangsu Province, during this year's National People's Congress and Two Sessions, She Caigao, a National People's Congress representative and Party Secretary and Chairman of Nanjing Metro Group Co., Ltd., also proposed the establishment of a housing pension system to explore and solve the problem of housing safety management. She Caigao pointed out, "Housing pension is an institutional arrangement for the government to reserve housing safety funds, which can accelerate the elimination of safety hazards in housing use and solve historical legacy problems."
Meanwhile, since last year, the authorities have repeatedly proposed to study the establishment of a housing pension system.
After the April 29, 2022 collapse of self built buildings by residents in Changsha, the Ministry of Housing and Urban Rural Development held a video conference on May 1 of that year and deployed the national self built building safety special rectification work, pointing out the need to accelerate the research and improvement of various systems for building safety management, study the establishment of a building health examination system, and strengthen the safety guarantee of the entire life cycle of buildings. We need to study and establish a housing "pension" system to better solve the problem of funding for existing housing maintenance.
On May 24, 2022, the General Office of the State Council issued a notice on the special rectification work plan for the safety of self built houses nationwide, pointing out that "we will improve the mandatory standards for housing quality and safety, and study the establishment of systems such as regular physical examinations, housing pension, and housing quality insurance."
Why establish a "housing pension" system?
She Caigao pointed out that the time span and quantity of existing housing in China are long, and many houses were built before 2000. With the increase of housing age, the proportion of old houses is still continuing to rise. The average age of some existing housing units has reached 30-40 years, and problems such as structural instability, rusting and aging of facilities, equipment, and pipelines, roof leakage, and cold penetration of walls continue to emerge. However, the special maintenance funds for some old residential areas are rapidly decreasing or even drying up. Taking Nanjing as an example, even though special maintenance funds have been collected and there are currently surplus old residential areas, nearly 30% of them still have a balance of less than 100000 yuan, which is far from meeting the current demand for aging maintenance of facilities and equipment in old residential areas.
In response to the phenomenon that the existing special maintenance funds for residential buildings cannot meet the demand for "all that should be repaired", She Caigao suggests establishing a housing pension system.
Chai Qiang also pointed out in his proposal that according to the China Census Yearbook-2020 and related data, over 30% of urban household housing in China was built before this century. The scale of urban housing stock has exceeded 30 billion square meters, and with the increase of housing age, the proportion of old houses is still continuing to rise. Given the increasing scale of existing housing, involving more and more residents and families, there is an urgent need to be proactive and shift towards proactive prevention, gradually accumulating "pension" for housing from now on.
Where does the money for housing pension come from?
Regarding the issue of where the money for "housing pension" comes from, She Caigao suggested in his proposal that housing pension can be managed by classification, consisting of two parts: public account and personal account.
Among them, the main sources of public account funds are land transfer fees, surplus of value-added income from maintenance funds, funds for the renovation of old residential areas, funds that should be collected for the transfer of three supplies and one industry, urban property management bonus funds, etc., following the principle of "government led, professional operation, coordinated use, and dedicated funds", adhering to the management concept of "income and expenditure two lines", mainly used for daily mandatory physical examinations of houses, purchasing comprehensive insurance for house safety and other public services.
Personal account refers to the special maintenance fund account for residential buildings, which is managed in accordance with relevant laws and regulations on the management of special maintenance funds. It is mainly used for the maintenance and renovation of shared parts and facilities of residential buildings after the warranty period expires.
In his proposal on establishing a housing pension system as soon as possible to ensure the safety of people's housing, Chai Qiang stated that by establishing a housing pension system, financial support can be provided for the establishment and operation of the housing safety management system, better fulfilling the government's responsibility for housing public safety.
Its suggestion is to extract a certain proportion from the annual land transfer income or net income, such as a provision of more than 5% of land transfer income or more than 20% of land transfer net income, as housing pension. Because the main source of income from land transfer comes from housing, the land price or land transfer fee is collected at once when supplying land for real estate development. Especially, the value-added income from land is actually mainly "taken from housing", and the use of bidding and listing methods makes the proportion of land price in housing prices too high, squeezing out the necessary costs for ensuring the quality of housing construction and maintenance and renewal.
At the same time, we will leverage the financial support role of housing pension in the safety management of the entire life cycle of houses, establish a housing health examination system, and use housing pension to carry out regular housing health examinations to "treat" old houses, achieve safety testing, emergency situation troubleshooting, and accident risk protection, and form a long-term mechanism for housing safety, providing full life cycle safety protection for houses.
The urban pilot program is on its way
Since the beginning of this year, the establishment of a housing pension system has been mentioned multiple times. In addition to some National People's Congress deputies and CPPCC members suggesting the establishment of a housing pension system to solve the problem of old house maintenance, the National Self built Housing Safety Special Rectification Work Television and Telephone Conference was held in April this year. The conference pointed out the need to actively build a long-term mechanism for housing safety management, accelerate local legislation for housing safety management, and actively promote the pilot of the "three systems" of housing pension, regular physical examination, and housing quality insurance, as well as the comprehensive supervision of self built housing safety across departments.
At the same time, some cities have explored the pilot work of housing pension system.
According to the official website of the Jiangsu Provincial Department of Housing and Urban Rural Development, on May 12 this year, Zhou Tao, a first level inspector of the Real Estate Market Supervision Department of the Ministry of Housing and Urban Rural Development, and his delegation went to Nanjing to conduct research and explore the pilot work of the housing pension system and held a symposium. At the symposium, the research group listened to the introduction of Jiangsu Province and Nanjing City on exploring the establishment of a housing pension system. The attendees exchanged opinions on the necessity and feasibility of establishing a housing pension system, as well as the problems and relevant suggestions in the management and use of special maintenance funds for residential properties.
The Zhongzhi Research Institute believes that the Ministry of Housing and Urban Rural Development has once again emphasized "exploring the establishment of a housing pension system to provide full life cycle safety protection for houses", which may indicate that the construction and pilot implementation of the housing pension system may accelerate, which is conducive to better solving the funding problem of renovating old residential areas, improving the living quality and environment of residents.
Chen Xiao, senior analyst at Zhuge Data Research Center, mentioned that the exchange between the Ministry of Housing and Urban Rural Development and Bank of China this time also conveys the possibility of exploring the implementation of housing pension through cooperation between government and bank.
