As an important popular project of the country in recent years, the renovation project of old urban communities has faced the pain points of people’s livelihood and achieved positive results, which greatly improved the happiness of the beneficiaries. However, the total demand for funds for the renovation of old residential areas is relatively large. At present, various localities are raising funds through multiple channels, but there are still problems such as the overall shortage of funds, the "unaffordable" financial funds, the reluctance of residents and society to invest, and the lack of funds for later management and protection.
What should be changed in the renovation of old residential areas?
According to the relevant person in charge of the Ministry of Housing and Urban-Rural Development, the renovation of old residential areas is divided into three priorities, one is the most basic water circuit gas network. The problems listed as "priority transformation" in various places are "dilapidated pipe network, lack or aging of water supply and drainage, power grid, gas and optical fiber". Second, elevators, parking garages and other supporting facilities. After the water and electricity are changed, the qualified areas can install elevators and build parking garages and other supporting facilities according to local conditions. The third is property management and public services. Conditional areas can solve the problems of water and electricity and parking, build supporting facilities such as old-age and child-care service facilities and barrier-free facilities, and implement energy-saving transformation.
After the renovation of the old community, the old building is equipped with elevators to make the residents no longer "suspended"; In the past, the ground where rain and sewage flowed was covered with colored cement; In the past, the open space full of weeds and garbage has now become a pavilion for people to rest. Various changes in the community have improved the happiness of residents. At the same time, the transformation of old residential areas has not only improved people’s livelihood, but also promoted investment and consumption growth, which has also made great contributions to economic growth.
Sources of funds for the renovation of old residential areas
The soldiers and horses have not moved, food and grass come first, and the funds needed for the transformation of old communities are the top priority. According to the contents of rectification, financial investment, house payment, special housing maintenance fund, personal provident fund, responsible enterprise funds and social investment can be used for the transformation of old residential areas. Mainly divided into the following parts:
First, the central government’s financial investment. In 2012, the Ministry of Housing and Urban-Rural Development issued the Interim Measures for the Administration of Subsidies for Energy-saving Renovation of Existing Residential Buildings in Hot Summer and Cold Winter Areas and the Implementation Opinions on Promoting Energy-saving Renovation of Existing Residential Buildings in Hot Summer and Cold Winter Areas. Subsidies for energy-saving renovation of existing residential buildings in hot summer and cold winter areas include four aspects: expenditure on energy-saving renovation of external doors and windows of buildings; Expenditure on energy-saving renovation of building external shading system; Expenditure on thermal insulation and energy-saving renovation of building roofs and external walls; Other expenditures related to energy-saving renovation of existing residential buildings in hot summer and cold winter areas approved by the Ministry of Finance and the Ministry of Housing and Urban-Rural Development. The highest subsidy standards in eastern, central and western regions are 15, 20 and 25 yuan/m2 respectively.
The second is government financial investment and fixed assets investment. Taking Beijing as an example, the projects shared by the two levels of finance include: comprehensive renovation of seismic strengthening of buildings, renovation of energy saving and heat metering, barrier-free facilities, environmental improvement of residential quarters, greening, roads, lighting facilities, and air conditioning regulation. Among them, the renovation of barrier-free facilities and the renovation of existing non-energy-saving buildings are shared by the urban two levels of finance in a ratio of 1:1; District environmental improvement, greening, roads, lighting facilities, air conditioning and other renovation costs, by the county responsible. Fixed assets investment is used for municipal public facilities renovation, flat to slope and other projects.
Third, responsible enterprises and responsible (property rights) units invested funds. The renovation costs of water, electricity, gas, heat, communication and other lines, pipe networks and equipment in the public part of the community shall be borne by relevant professional companies and responsible (property rights) units, and the urban two-level finance shall give fixed subsidies. Such as: water supply and drainage network transformation, power distribution facilities transformation, gas pipeline transformation, heating pipeline transformation.
Fourth, individuals and society invest money. Generally speaking, the cost of water, electricity, gas, heat, communication, auxiliary facilities and equipment of waterproof lamps, rainwater collection system in residential areas, renovation of fire-fighting facilities, supplementary construction of parking spaces for motor vehicles and non-motor vehicles, and renovation of security systems can be used in accordance with regulations, such as housing reform, house sales, special maintenance funds and personal provident fund. The expenses required for the renovation of ordinary basement, the addition of elevators, the application of solar energy technology, roof greening and other projects can be solved by means of unit investment, social fundraising, contract energy management, and owner’s own financing.
In addition, in order to solve the problem of funds, the state supports the transformation from multi-channel funds and the implementation of tax reduction and exemption policies. In terms of financing, it requires increasing financial subsidies, increasing bank credit support, attracting private capital to participate, expanding bond financing, and raising funds by enterprises and the masses. Among them, multi-channel financing methods include: first, issuing government bonds, Public Offering of Fund, trusts and other financial means; Second, the National Development Bank and the World Bank provide interest-free and discount loans, or introduce investment companies; The third is to adopt PPP and contract energy management modes; Fourth, by issuing special lottery tickets, a certain proportion of the existing land transfer fees or lottery income is extracted as the old community renewal fund; Fifth, adding floors and areas, increasing the commercial functions of the community, and tearing down some old buildings and building new ones. In view of the capital investment in the renovation of residential buildings, from the central government to the local government, the methods of raising funds according to local conditions have been introduced one after another.
The current funding problem
It is indeed a relatively perfect operation system to obtain funds through financial allocation, residents’ investment and market operation. However, judging from the current progress, the financial allocation is in place, and residents are willing to contribute to improve their living quality. As for absorbing social capital to participate in the transformation through market operation, the effect is not great. The renovation of old residential areas still faces financial difficulties.
The financial dilemma is caused by the huge demand for funds. According to the statistics of China National Information Center, as of December 2018, 106 old residential areas have been renovated in 15 pilot cities for the renovation of old residential areas in cities and towns designated by the Ministry of Housing and Urban-Rural Development at the end of 2017, benefiting 59,000 households. According to the preliminary investigation in various places, there are about 170,000 old urban communities that need to be rebuilt nationwide, with a construction area of about 4 billion square meters, involving hundreds of millions of residents. According to preliminary estimates, the total investment in old residential areas that need comprehensive transformation in cities and towns in China can reach 4 trillion yuan.
Secondly, at present, the main source of funds for the renovation of old residential areas in China is still financial funds, but the existing residential buildings in large cities rely only on the government’s own efforts, which is far from making up for the huge funding gap for renovation. The the State Council executive meeting held on June 19th pointed out that financial institutions and localities should be encouraged to actively explore and increase financial support for the renovation of old residential areas in a sustainable way. Use market-oriented methods to attract social forces to participate. On October 14th, when Premier Li Keqiang visited Xi ‘an, he stressed that it is not enough to transform old residential areas into government solo, but also to innovate the system and mechanism, fully attract social forces to participate and form a multi-voice chorus.
Finally, different from shed reform, the fund-raising channels for the renovation of old residential areas should be based on the principle of "who benefits, who contributes", reasonably determine the allocation rules of renovation costs in combination with the actual situation, and improve the multi-channel fund-raising mechanisms such as reasonable sharing of residents, unit investment, market operation and financial awards. Among them, the responsibility of residents’ capital contribution can be clearly defined, and the part of residents’ capital contribution can be implemented through residential special maintenance funds, public income and other channels, and individual residents are encouraged to donate money and materials to participate in the transformation of old communities. However, China has not yet established a perfect investment and financing system. The government’s financial investment is limited, and the residents’ willingness to contribute is low, so it is difficult for enterprises to participate because of many uncontrollable factors. Obviously, only by solving the financial dilemma can we smoothly promote the transformation of old communities.
countermeasure and suggestion
The renovation of old residential areas involves a wide range, which is a systematic project. To do this work well, we need to solve three problems:
First, establish a diversified financing mechanism and increase the efforts to raise funds for transformation. First, enrich financing subjects and ease the pressure on government funds. Give play to the decisive role of the market in the allocation of public resources and treat all kinds of investment subjects equally. Utilize franchising, investment subsidies, government purchase of services, etc. to attract private capital to participate in the renovation projects of old residential areas. In a certain period of time, foreign capital can also play an active role.
The second is to expand financing channels. Explore the establishment of a diversified loan risk compensation fund financing model with the participation of central, local and social funds to expand the sources of funds. All localities should, in light of their own reality, reasonably expand the scope of support, scientifically determine the sharing ratio, and make the formulation and implementation of the risk compensation sharing mechanism compatible with the local government’s financial resources and industrial development policies.
The third is to strengthen financial support and optimize financial supply. We should strengthen the role of policy finance, strengthen the financing docking between CDB and Agricultural Development Bank, and provide a stable source of funds with low cost and long term for community rectification; Encourage and guide commercial banks to set up specialized service institutions and formulate multi-level credit service mechanisms to provide more practical credit services for the transformation of more old communities; Establish a "bank-enterprise assistance fund" to support the capital turnover of key enterprises and minimize the financing costs of enterprises.
Fourth, give full play to the direct financing function of the capital market. Taking advantage of the characteristics of large scale, long term and stable use of equity and bond markets, we will encourage qualified leading enterprises and small and medium-sized enterprises to go public and use multi-level capital markets for financing.
The fifth is to promote the PPP model, that is, the cooperation between government and social capital. This model uses the existing resources of the community to attract social funds, and the government, investment enterprises and community owners establish a relationship of "benefit sharing, risk sharing and full cooperation" in the form of concession agreements, forming a win-win model of "government support, enterprise financing and co-construction, and residents’ participation and benefit".
Second, improve the financing supporting measures to attract more funds to invest in the renovation of old communities. The first is to increase the guarantee of financing policy system. Seriously study various policies and measures to support the transformation of old residential areas, give play to the guiding role of finance in the allocation of financial resources, and standardize and guide financial institutions and private financing to invest more resources in the transformation of old residential areas through financial subsidies, tax incentives and risk compensation.
Second, continue to improve the construction of social credit system. Vigorously promote the construction of credit information sharing and accelerate the credit construction of government, enterprises, communities and individuals; We will improve the credit guarantee market, set up a financing guarantee company wholly owned or controlled by the policy government, and further improve the credit risk compensation and sharing mechanism of small and micro enterprises, that is, the risk sharing mechanism of banks, insurance, guarantees and governments.
The third is to clarify the policy objectives and improve the assessment mechanism. Improve the relevant rules and regulations, and clarify the scope standards, operational procedures and charging standards for supporting enterprises; Establish and improve the assessment management system suitable for policy objectives, and clarify the main assessment factors; Actively build a multi-level fund replenishment mechanism based on financial funds, and promote financial institutions and re-guarantee institutions to provide capital injection support.
The fourth is to supervise the whole process of funds. In accordance with the requirements of implementing the main responsibility, clarify the main responsibility of the project funds, that is, the principle of "whoever implements it is responsible", so as to ensure that the use must be effective, the inefficiency must be accountable, and the violations must be investigated, so as to ensure that every brick and tile from the allocation of funds to the implementation to the renovation of old communities must be strictly and meticulously supervised, and corruption such as shrinkage and discount are not allowed.
Third, increase the investment ratio of enterprises and community residents. Practice has proved that if the transformation of old residential areas only depends on government investment, it is tantamount to a drop in the bucket If it is invested by enterprises, it is necessary to find new profit space. However, as a major livelihood project, enterprises can not have the idea of quick success and instant benefit when investing in the renovation of old residential areas, let alone hold the illusion of profiteering.
The first is to increase the public income of old communities and solve the financial dilemma. For example, considering that many old residential areas are located in prime locations of cities, the advertising revenue of elevators after renovation, the parking revenue after adding parking berths, and the rental revenue of public houses in residential areas can all be used as "cakes" to attract enterprises to invest. In addition to revitalizing idle space, it can also form market interest stimulation points through subsequent property and parking management fees, as well as planned pension, child care, health and other industries.
The second is to increase the proportion of residents’ participation in the renovation of old residential areas. Residents should be encouraged to play a sense of ownership, assume a certain responsibility for capital contribution, and establish a mechanism for sharing results in accordance with the principle of "who invests and benefits". Specifically, some reconstruction funds can be raised through channels such as residents’ self-raised donations and housing maintenance funds.
The third is to explore ways to establish a maintenance fund system for old residential quarters and use new facilities for compensation, so as to broaden the sources of long-term care funds. Specifically, according to the basic conditions of old residential areas, residents’ consumption level, awareness of payment and other specific conditions, residents should be guided to implement standardized, basic and bottom-up care models in a classified manner, and the level of follow-up care should be gradually improved.
Fourth, broaden social investment channels, encourage enterprises to invest, donate money and other ways to attract social forces to donate money or cultural and sports facilities; Encourage the original property units to support the transformation of old communities by donating money and materials; You can also set up a love foundation to encourage caring people in society to donate freely.
