Ten questions to Meng Xiaosu: How to build affordable housing, where is the money, and how to distribute it?
Tencent Real Estate and Henan Radio and Television Elephant Fortune jointly launched the 2023 year-end plan "Quest in Change".
Text / Tencent Real Estate, Yuan Xiaoli, Guo Yifei
On August 26, 2023, the State Council deliberated and adopted the "Guiding Opinions on Planning and Construction of Affordable Housing", mentioning that it is necessary to focus on solving the outstanding problem of insufficient supply of affordable housing, so that "the market belongs to the market, and the guarantee belongs to the security", which is called "new housing reform" by the industry.
Since then, a number of important central meetings have repeatedly reiterated that accelerating the construction of the "three major projects" such as affordable housing is an important starting point and development opportunity for the transformation of the real estate model.
25 years ago, Meng Xiaosu, then the head of the national housing reform research group, led the formulation of the "98-year housing reform plan". In the past 20 years of rapid growth of real estate, Meng Xiaosu has never stopped calling for the construction of affordable housing.
So who will build the new round of affordable housing, where will the money come from, and how will it be distributed and managed?
Recently, focusing on the "new round of affordable housing planning and construction and the future trend of real estate in mainland China", Tencent Real Estate and Henan Radio and Television Elephant Fortune had a dialogue with Meng Xiaosu, the former head of the national housing reform research team and the former chairman of China Real Estate Group Corporation, to conduct an in-depth analysis of the ten major issues of public concern.
Meng Xiaosu, former leader of the National Housing Reform Research Group and former chairman of China Real Estate Group
Q1: Can the new round of affordable housing construction promote the real estate industry to get out of the predicament and develop healthily?
The construction of affordable housing was proposed 25 years ago when the housing reform plan was determined, and it was called the "housing dual-track system" at that time, which clearly proposed that the market should supply commercial housing and the government would provide affordable housing, but neglect would lead to insufficient supply of affordable housing, and even the investment in affordable housing accounted for only 3.5%-5% of the entire real estate investment for a period of time, which was obviously insufficient.
At present, the construction of affordable housing is insufficient, and the effective demand is insufficient. Many of the effective demand comes from ordinary income families and working families, and the housing prices are high, so that working families cannot afford them, in this case, the effective demand cannot be formed. At present, part of the downturn in the commercial housing market is due to people's poor expectations, part of it is because the government restricts purchases, and part of it is that some inappropriate housing prices are provided for inappropriate people, and these high-priced commercial houses for working families are not something they can afford, so it is necessary to adopt the "housing dual system" and improve the two systems.
I think the real estate downturn in the past two years, including the fact that local governments are now counting on land auctions to obtain land finance, is slowly getting narrower and narrower, which also prompts people to reflect on the need to build affordable housing.
The central government's proposal of "establishing a new model of real estate development and accelerating the transformation to a new model of real estate development" has also promoted the realization of the idea of affordable housing construction.
What is the new development model? The main thing is to improve the "dual-track housing system" and build affordable housing on a large scale, so that at the moment when the commercial housing market is in a downturn, it can effectively change the supply structure of real estate, and can also better meet the needs of more people, so as to form a new development model of "the market belongs to the market" and "security belongs to the guarantee".
Second question: Who will build the new round of affordable housing construction, where will the funds come from, and how will it be distributed?
The construction of affordable housing is definitely a government action, including the three major projects promoted by the central government, mainly led by finance, mainly with affordable housing, and the land for the construction of affordable housing must also be supplied by the local government free of charge. Gratuitous means that the land transfer fee is not collected, the land cost is collected, the land cost includes demolition, including some other necessary expenses in the early stage, so the affordable housing is not only the cost of construction and security, it also has a certain land cost, but the government can not collect the land transfer fee, and the local government should give the corresponding land, can not put the land in those remote areas, those land with inconvenient transportation, to these ordinary income families, they do not have good self-transportation conditions, or need the support of public transportation.
Many people are worried that the local government will not have the incentive to build affordable housing on good land without collecting land transfer fees. But I believe that our government is a people's government, and this motivation comes from working for the people.
The downturn in the commercial housing market in recent years has also made more and more local governments see that it is no longer sustainable to rely on land transfer fees alone. The construction of affordable housing is the same as the construction of commercial housing, and it can also stimulate the construction industry, and pull more than 100 industries related to the real estate industry, and they will also generate taxes, generate employment, and produce a number of factors to promote social stability, which are the purpose of the government, and not just look at a land transfer fee. If you want to continue to collect like this, now that the general situation is not allowed, real estate is not allowed, in this case, I think it may also help some local governments to make up their minds in building affordable housing.
However, without central investment, the local government will have difficulties, and they will have to face local difficulties, including the fact that the local government cannot collect the land transfer money at present, and the local government debt is increasing, and the construction of affordable housing will definitely increase the local debt. If there is central investment, then the central enterprises are about to come out. Of course, the central enterprises I am talking about are not those restructuring enterprises that have been listed in the capital market, they are no longer central enterprises, they are the original central enterprises, and later changed to market-oriented enterprises, and they can continue to be active.
What should we do with the existing central enterprises? Gradually withdraw, or simply break off, and sell them to these listed companies as a whole, so that they can return to their original intention of establishing central enterprises and complete the administrative and guarantee tasks of the state.
Therefore, I think that now when the task of affordable housing construction has been mentioned in front of us, it is necessary to further study how to make use of these central enterprises and give full play to their role in this regard.
Let's talk about who will contribute, the "No. 14" document has made it clear that if the hidden liabilities of local governments are increased because of this, they will not be implemented. So in this sense, it is not enough to rely on local finances alone, and it is necessary for the central government to contribute, and the central government must take the lead in investing in affordable housing, so as to effectively guide local governments' investment.
The central government contributes money, the central enterprises invest, and then the local government contributes, plus loans and other forms of financing, a certain scale can be formed. In recent years, real estate investment has declined, and the purchasing power of real estate is also eroding, losing about 5 trillion yuan every year. In 2023, it is possible to lose more than 5 trillion yuan, how to make up for such a big hole? If the central government can contribute 1 trillion yuan, and the local government will support another 1 trillion yuan, which is 2 trillion yuan, plus banks, trusts, and funds to invest together, that is, 5 trillion yuan, which will be invested in affordable housing, and not out of land transfer money, then its driving force for the construction industry can reach 10 trillion yuan. It is precisely during the real estate downturn that this hole has been plugged through the construction of affordable housing, and a virtuous circle of real estate transformation can be realized.
At the same time, the quality of affordable housing can not be lower than that of commercial housing, so the materials it consumes are not lower than that of commercial housing. The reactivation of the construction industry, the building materials industry and the more than 100 industries associated with them can also provide tax revenue for local governments and also stimulate employment.
The next step is distribution, and who will divide the distribution?
Of course, it is led by the government, and the people must participate, and we have enough experience in this area, so we don't have to worry about saying that it is because the government is leading, and the distribution is unfair. We have a set of experience in welfare distribution in the past, and now some places have not stopped the construction of affordable housing in recent years, and they also know how to divide it, and there will be management problems after distribution, including the part that is now allocated for rent, and in a few years they have money, and if they want to buy it, they should also be converted into placement.
The placement is also based on the price of affordable housing, and the government cannot be burdened with such a large financial burden to bear the cost of housing, and then lease it with low rent.
Therefore, I think that if the central government can take the lead in building affordable housing with 1 trillion yuan a year, and invest for 5 consecutive years, the existing real estate supply structure will be significantly improved, and at the same time, a certain scale will be formed during the 5-year period, and the hole of real estate decline will be plugged. The construction of affordable housing will form a long-term mechanism in China, which will form "the market belongs to the market, and the security belongs to the security" and to achieve the institutional goals of improving the housing market system and the housing security system set in that year.
Three questions: What role can private real estate enterprises assume in the new round of affordable housing construction to expand their development space?
The difficulties faced by private real estate enterprises are mainly market changes, and the important reason for market changes lies in the restrictions for many years, it should be said that it is not only the changes in the market itself, but also the purchase restrictions that began in 2011 have a long-term effect, and gradually put down China's real estate market.
I think that after the construction of affordable housing, especially after the large-scale start of affordable housing construction, it is possible to return to the track of rational regulation. Because of the regulation and control over the years, its starting point is to see that the price of commercial housing is getting higher and higher, and low-income groups cannot afford it, so it thought of lowering the price of commercial housing, so it has introduced a series of measures to suppress the commercial housing market.
The fundamental solution to these problems is to make the large-scale construction of affordable housing.
It turns out that the house prices called for by the working class to fall refers to allowing them to buy affordable housing, and those residents who already have real estate, they are not willing to reduce housing prices, for fear of the depreciation of their real estate assets, they hope that housing prices are stable or stable to rise, and these needs can be achieved in the commercial housing market.
The construction of affordable housing not only allows state-owned enterprises and central enterprises to have a large amount of work that meets their own functions, but also allows private enterprises to gradually get rid of the impact of administrative restrictions and market downturns, and slowly return to normal.
Q4: Is it feasible for the government to acquire old residential areas or unfinished buildings and revitalize them into affordable housing?
The biggest difference between affordable housing and commercial housing is that it does not charge land transfer fees, and it does not amortize the supporting costs of urban infrastructure. Is it possible that the government should pay for the purchase of these commercial houses, or even for the government to issue bonds to purchase these commercial houses? If so, how can they turn them into affordable housing? Banks can admit their losses, but they cannot lose money if they want to, because the land transfer money has already been collected by the local government, unless the local government auctions off another piece of land and the land transfer money is returned? Is it possible? Impossible! With this money, it is better to build affordable housing, because collecting one square meter of commercial housing is enough to build three square meters of affordable housing.
But if you go and buy these houses and turn them into "peacetime and emergency" infrastructure, it is possible.
Another problem is related to this problem, so many people pay attention to the fact that there are so many commercial houses in the society, why are they so concerned? It is because some data are not true, people mistakenly think that there are too many vacant commercial houses, in fact, because of the continuous reduction of real estate investment in recent years, the decline is very large, a decline of 20% -30% a year, such a large decline, the future output is worrying.
So how much real estate is vacant?
I heard a celebrity say 300 million sets, but the whole society spread 300 million sets, how can there be 300 million sets, that's 300 million square meters, is one square meter a suite?
Some people even zoom it in to 3.5 billion units, they don't know what the concept of 3.5 billion units is, the world's 7.5 billion people and 2.9 billion families, 3.5 billion suites is the total number of people's housing in the world, how can China have the ability to build so many houses, so these false data, bragging data are flying all over the sky.
The current perception of society may be based on some false data. According to the data released by the National Bureau of Statistics, as of November 2023, the area of commercial housing for sale in the country is 318.13 million square meters, and if it is estimated according to a suite of 100 square meters, it is equivalent to more than 3 million suites.
Q5: The new round of affordable housing construction proposes to implement closed management of allotment-type affordable housing, how will it circulate in the future?
Now the placement that people are talking about is put forward by the central "No. 14" document, which is different from the original allocation, which is prepared for the "two new families", that is, new citizens and young people and new families, mainly leased, this kind of affordable rental housing, now also began to circulate in the REITs market, which solves the problem of its long-term holding.
But on the other hand, if the construction of affordable housing is large-scale, it is impossible for all of them to be held by the government, and some residents, especially the working class, can afford to buy it, but they cannot sell it to them at the price of commercial housing. Therefore, according to the definition of affordable housing in those years, no land transfer fee was collected, only the basic taxes and fees of the land were collected, and the cost of infrastructure was no longer apportioned, so that the housing prices were low, to what extent? Generally, in cities like Beijing, Shanghai, Guangzhou, and Shenzhen, about 1/3 of the current commercial housing price, 2/3 of the high land price and some other income were removed, so that working families could enjoy such a policy dividend.
This kind of house should not enter the market in the short term, because if it is built as affordable housing, but it is sold directly to the commercial housing market, isn't this a kind of policy arbitrage? This is not suitable. Local governments will not support this, but if a resident buys a house, he wants to withdraw and enter the commercial housing market? Not in the short term, I am talking about the short term is within a few years, for example, five years, if it is to be transferred within five years, the government can buy it back at the original price, which is also the experience of the international community, including Hong Kong and Singapore.
Will this round of affordable housing be able to enter the market in the future? I think it is. After paying a certain fee, you can enter the market, there must be a number of years, this period is 5 years to 7 years in Hong Kong, we stipulate how many years, according to the different situations of each city and the different needs of the housing to make provisions that fit it.
When it comes to making up the fees, in order to make the old workers affordable, the house was sold at cost price, and a seniority discount was played, and a one-time payment discount was played, so that a rental house was sold to the old workers for 10,000 or 30,000 yuan, or maybe 50,000 or 60,000 yuan. After a year, they paid a land transfer fee of 1% of the purchase price of the house, and the house was allowed to be transferred after five years. Not all old workers are transferred, we are talking about giving him a right of assignment so that its price can be reflected. If it can't be circulated, its price won't be revealed. We see that not all the old workers are selling their houses now, but all the old workers can tell how much their houses are worth, and now many of the houses in Beijing and Shanghai that were bought for 20,000 yuan or 30,000 yuan are now worth tens of millions.
Therefore, after a certain number of years and a certain amount of fees, these new families who buy affordable housing can enter the market in the future with the current affordable housing, so that their housing prices can gradually catch up with commercial housing, thus giving them a chance to achieve common prosperity.
Q6: If affordable housing is allowed to circulate in the market after a period of time in the future, will it have an impact on the commercial housing market?
On the one hand, the current commercial housing market has forced many working families who can't afford to buy a house to go in, so that they are full of worries in the face of high housing prices, which itself should not be, and the construction of affordable housing in the future is to allow these residents to enjoy the preferential treatment of affordable housing.
On the other hand, in the future, when the supply of affordable housing is sufficient, the entire housing price system will change, and "the market will be the market, and the guarantee will be guaranteed" The price of affordable housing is obviously low, which solves the goal of the majority of working families hoping that housing prices will fall, not the collapse of the commercial housing system, so that the people who have houses themselves also suffer, but the supply price of affordable housing is low, if you must calculate the average housing price, then its structural housing prices are low, but it does not hurt those who already have houses, and their property value has not depreciated. Zoom in a little more, like Hong Kong and Singapore, these housing systems, their commercial housing in the case of sufficient supply of affordable housing, housing prices should rise and fall.
Recently, Singapore's housing prices have risen dramatically, the Singapore government has launched a policy of raising taxes, including stamp duty to 60%, if 100 yuan to buy a house, you have to take 60 yuan to pay taxes, which is only stamp duty, not counting other taxes, so that he can inject funds into the construction of affordable housing through the taxation of commercial housing, which is a good regulation of the government.
Therefore, judging from our historical experience and foreign situations, the construction of affordable housing will not suppress the commercial housing market, but will allow the commercial housing market to recover its market attributes and lift the existing administrative restrictions, so that the commercial housing market can be reactivated.
Q7: Singapore's housing model has attracted much attention, what are the aspects of the HDB model that the mainland should learn from and learn from?
When formulating the housing reform plan, we learned from the advanced experience of many countries and regions, including the United Kingdom, Germany, France, Japan, South Korea, Singapore, as well as Hong Kong and Taiwan.
The most direct or simple way we learn is the so-called Hong Kong model and the Singapore model, and the Hong Kong model is a copy of the British model. At that time, we proposed to build affordable housing in 78 large cities, and the proportion of affordable housing should account for about 50%, learning from the British and Hong Kong models, Singapore has made the scale relatively large, until 80% or more of the families live in affordable housing, which is determined by his special situation.
Singapore's characteristics are different from Hong Kong, its circulation of affordable housing is to establish another market, is that affordable housing can only be circulated in the affordable housing, that is, the HDB market, and the commercial housing market is another market, Hong Kong is different, Hong Kong in 5~7 years after paying the land transfer fee, you can enter the commercial housing market circulation.
We have compared these experiences over and over again, and we have learned them all. Hong Kong's housing area is too small, we didn't go to study, 40~60 square meters, it is not suitable for so many cities in China, and our current scale of affordable housing is larger than it. But Singapore is a national housing program, Singapore residents can enjoy it once if they don't have a house, and its house is too big, so it is more than 190 square meters, which is not something we need to learn, we want to take it.
Whether our future houses can be circulated, these markets can be circulated, but it stipulates different markets, if we say that the houses we are placing for sale cannot be circulated, it is impossible, there must be the ability to circulate, but there must be time, there is no time limit, buy and sell, this will not become a house speculation? We do not need to establish a separate circulation market, this is also because China is a large country, has a lot of land, a large population, and a large number of cities, so that there are no two markets, and this is the experience of Hong Kong.
Eight questions: Will the new round of large-scale construction of affordable housing make people who originally wanted to buy commercial housing not buy houses?
To answer this question, there is a hypothesis first, that is, governments at all levels can provide affordable housing on a large scale in accordance with the requirements of the central government.
In the case of the assumption is true, we have to decompose the group of buyers, specifically whether he is the object of affordable housing or commercial housing, if it is originally a commercial housing object, is not in line with the purchase conditions of affordable housing, this resident should work hard to find a suitable house in the commercial housing market; if he is enough for the conditions of affordable housing, then there is no need to grit his teeth at this time to buy commercial housing.
Therefore, I believe that all localities should also give people a clear boundary, telling them what kind of income level and conditions they can enjoy the preferential treatment of affordable housing, and there is also a distinction between the area and the size of the house. Now the society is worried about the problem of young people not getting married and not having children, and it can also play a little more role in promoting it in the face of affordable housing.
No matter how much policy encouragement is to let residents have more than one house for children, no matter how much other subsidies can be made, it is better to reasonably let residents enjoy a little more area, or to add a bedroom, which is a greater encouragement for him.
Q9: What are the strange phenomena in the real estate market now?
This round of destocking, Beijing, Shanghai and Shenzhen, the first-tier cities still stick to the purchase restriction policy and the loan limit is not relaxed, which not only affects the real estate development and economic development of these cities, but also affects the confidence of the people of the whole country, so it should be considered from the overall situation.
Three oddities that I fear will emerge in 2024.
The first strange phenomenon has appeared in the past two years, which is called "artificial respiration to save the property market" on the one hand, and "one hand is still pinching the neck of the property market", which is a strange phenomenon of saving the market. In fact, it is a strange phenomenon that the hand holding the neck is relaxed, and it can slowly ease up without oxygen and artificial respiration. Will this phenomenon continue into the new year?
The second strange phenomenon is that on the one hand, continue to restrict purchases, increase housing inventory, on the other hand, but advocate that the government pay money or even issue treasury bonds to purchase those stock houses, in many expert proposals have appeared, he does not know that in the state of purchase restrictions, the appearance of this inventory is a false side, if you want to spend money by the government to buy, but also cancel the purchase restrictions, so that the social purchasing power can be fully realized in this case, and then consider this kind of thing.
The third strange phenomenon is that I am worried that all localities are starting the construction of affordable housing, but instead state-owned enterprises and central enterprises are not only watching from the sidelines, but also entering the commercial housing market one after another, and continue to auction land at high prices, which violates the requirements of the State Council for state-owned enterprises and central enterprises to withdraw from the competitive real estate field.
Whether these three strange phenomena will appear in the new year, let us wait and see.
Q10: Has the real estate market reached the bottom? Will buyers wait a little longer, or will they enter the market now, and when will the property market recover?
The commercial housing market has been in the doldrums for more than two years, and it should rebound according to normal rules.
However, many experts believe that this time the fall is so deep, if there is no unconventional policy, it is difficult for the market to recover, which is faced with the judgment of the commercial housing market in 2024, whether it can recover quickly or continue the downturn, these questions are difficult for me to judge.
I just see that the determination to build affordable housing is great, and the task is clearly arranged, if it can really be implemented, it is possible to activate the commercial housing market.
In this case, it is not easy to catch up with the low housing prices in the past few years, if it is a buyer of commercial housing, if it is a part of the people who have money themselves, but they have deposited their money in the bank to buy, they should sell as soon as possible, and it may really be the bottom at this time. Of course, if real estate continues to be sluggish in 2024, then it is possible for people to wait and see.
On the other hand, if you are not the main buyer of commercial housing and cannot afford to buy commercial housing, you are the object of enjoyment of affordable housing.
I believe that the central government has made such a big determination, and there will be a response from all over the country, but I am also worried about whether it can really be implemented, because we have been calling for affordable housing for so many years, and the central government has not made a decision once, and the result has not been done in the end, so I can't give a clear answer to this question, because my outlook for 2024 is still two directions, thinking that it is possible to go this way and that way. We hope to go in the direction we expect, that is, to improve the dual-track housing system.