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The Real and the Imagined Socially Responsible Real Estate in China Context, Discourse, and Practice MIT China Talk | Prof. Chen Weizhen | Tongji University 2016.2.24 1

The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

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Page 1: The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

1

The Real and the Imagined Socially Responsible Real Estate in China

-Context, Discourse, and Practice

MIT China Talk | Prof. Chen Weizhen | Tongji University

2016.2.24

Page 2: The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

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Key Words

• Tax distribution between the central and local government • Nationalization of Land/the paid use of land ( 70/40 )• Financing of Land

• Entrepreneurial government

1. Context of China’s Real Estate

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Land Financing

Non-taxland revenue

LandRevenue

Land mortgagefinancing

Land rent Land-transferring Other income Direct Tax Income

Indirect TaxIncome

Urban Land Use Tax Property Tax Increment Tax

On Land ValueAgriculture

land occupation tax Deed tax Real Estate Tax

Constructiontax

Tax distribution between the central and local goverment

Local Government

Central Government

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2012 2013 2014 20150

50

100

150

200

250

300

350

400

450

500

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

163

214

142109

19.55%

49.96%47.45%

43.02%

Beijing state financing income (billion RMB)

total finance income land finance incomecompleted transactions land financing percentage

Land Financing Debts from real estate

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Land capital is the key to entrepreneurial government Agricultural land or Village Land 农用地或农村建设用地

levelled land 平整后的土地Land

Reserve

Urban Construction Land

Rural Collective Land (Including industrial land and farmers housing land)

Land for Urban Construction

Primary Land Development

Public land leasing or allocating招拍挂或划拨

Return Farmland To Forest 退耕还林

Return of property rights产权返还

Demolition 拆迁Government-led①

Demolition

Primary Land Development

Secondary Development of Land 土地二级开发

⑤ STATE-OWNED PROPERTY COMPANY(Shanghai chentou Holding Co. LTD., EXPOshanghai Group, Greenland Group, etc..)

Land Operation Model

SOD Service-Oriented DevelopmentAOD Anticipation-Oriented Development

New Town Making Movement

PRIVATE CAPITAL(Vanke Group, GreenTown Group., etc..)

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Land urbanizationoverbuilt, land as incentive for new town development ghost city

Population urbanizationHukou, housing needs for floating population

LAND CONVENTION

REAL ESTATE INDUSTRY

GOING BUST

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Corporate Social Responsibility (also called corporate conscience, corporate citizenship or responsible business)

CSR

Royal Institution of Chartered Surveyors (RICS) & ‘best practice in corporate social responsibility’ (2016, June), especially in field of property industry

2. Discourse of socially responsible real estate in China

Page 8: The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

Public Perspective• Media overstate: real estate

industry is the ugliest industry?

• Windfall Profit • Land requisition chaos• Unaffordable housing price

Mismatch?

Page 9: The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

云南鲁甸地震灾区捐款 | Donation for Earthquake

2014.08.03 1636 children 5 , 000 , 000 CNY

向石楼县滑坡灾区捐款 | Donation

2013.07 1 , 200 , 000 household1 , 000 , 000 CNY

向四川雅安地震灾区捐款 | Donation

2013.04 5 , 000 , 000 CNY

name Amount(billion)

donation enterprises

Tang Lixin 0.315 education Xinshang

Wang Jianlin

0.311 education, donation

Wanda

Xin fuping 0.31 education Liwang

Taoxinbo

0.3 education Boli

HuangRulun

0.28 Education, charity

Jinmao centrury

Xu Rongmao

0.19 Education, charity

Shimao

Chen yuandong

0.17 education Xibu development

Charity

Mismatch?

9

Resource : 2014 Green Building Evaluation Report , Ministry of housing and urban rural development of science and technology and Industrial Development Center

Green building evaluation in China

Total Green Buildings: 2538

Design labelled built area: 272,000,000 m2

Run labelled built area: 20,000,000 m2

Total built area: 292,000,000 m2

(design label: 2379; run label:159)

Developer: Perspective

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“Top 100 Chinese Socially Responsible Real Estate Corporation”

•By “CHINA CONSTRUCTION NEWS” & Ministry of Housing and Urban- Rural Development

•10 aspects & 100 indexes target management, enterprise operation, the rights and interests of shareholders, employees' interests protection, consumer protection, contribution to the society, the responsibility of the venture, contribution to the public interest, contribution to the energy conservation and environmental protection, special evaluation and social evaluation.

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NEGOTIATION AMONG STAKEHOLDERS

shareholders employee

consumer

supplier

Government

community

EnvironmentSaving energyReduce emission

Public facilitiesEnvironment management

Community culture

Community Services

Property management

Applying for green operation system

Green procurement

Advanced technology

Environment index

Reduce safety riskMaintain corporate benefits and public imageEnhance community culture

Better communication with government

Obey legitimatepolicyPay tax in timeProvide job opportunity

Honest operationFair competition

Obey contract

Win-win oriented

Take responsibility

Increase information sharing

Ensure suppliers’ responsibility

Continuous tracking and evaluating

Enhance control of service quality

Improve experience service for clients

Improve after sale service

Increase the quality of return visit

Health care Right to know Multiple demands Compliance of sales and advertising

Health & safety

Shrink service

Performance evaluation

employee demands

Provide training opportunity

Add valuesNegotiation

Information transparency

Appreciate the negotiation

Seriously choose shareholders

Broader financing path

Career development

Community autonomy

Life and professional morality

Index System of Top 100 Chinese Socially Responsible Real Estate Corporation

STAKEHOLDERSIn EnterpriseSt

rate

gic

Public

Core

customer

suppliercontractor

community

Environment Government

share holdersemployees

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“Top 100 Chinese Socially Responsible Real Estate”

•2015 Topic “Craftsman’s Spirit, Centennial Enterprises”•2015 Top 10 Vanke/Greenland/Glendale/Poly/Wanda•2015 The Annual Leader: Country Garden, YANG Guoqiang

Country Garden Forest CityGreenland, New York Brooklyn project controversial

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Hypothesis1. The concept of “social responsibility” is broadly conceptualized and focused on physical and technological solutions. Although the social/community is listed as one key indication category, its measurement is lost in the evaluation process.

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Hypothesis2. The construction of new urbanization under the “new normal” will be shifted from the physical construction to the “spiritual” construction, and more attention will be paid on people's livability and social-cultural heritage.

What is the core value, which can reflect the most needed perspective ?

The NEW URBANIZATION

The NEW NORMAL

Community-based

Focusing on people, culture

and quality of living

Flexible adaption to economic downturn and

incubating social innovation

Return of social functions and cultural alignment

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Three Cases

A ---- New town development driven by private capitalprivate capital-driven primary land & secondary land developmentLIANGZHU,HANGZHOU ( 2003~ ) 6.7km2

B ---- New city making

Government-driven primary land development, private capital/market driven secondary land development.

SUZHOU-SINGAPORE INDUSTRIAL PARK ( 1994~ ) 278km2

C ---- Block scale urban renewal Private capital/market driven secondary land development.NANCHANG XIANGSHAN NANROAD RENEWAL ( To be built ) 10ha

Page 16: The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

16The Case of Residential Development in Liangzhu

3 hrs by car188km

50 mins by car20km

Practice Analysis A: Liangzhu Cultural Village in Hangzhou

16

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Biggest Residential Project of Vanke

1st ‘UNSTANDARD’New Town Practice

• total area is about 6.7km2, • total residential

development area is about 3.3 km2, GFA=3,400,000m2,

• residential GFA: 2,300,000 m2; Public Facilities GFA:500,000m2, tourism facilities GFA:700,000m2

• accommodated 30,000-50,000 people.

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“A Livable Heaven Never Been Seen In China”

YU Qiuyu, a famous Chinese writer

Page 19: The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

MORPHOLOGY ETHNOGRAPHY ECONOMY

Refinement Development Of Multi-functional Residential Area功能复合的居住区精细化开发策略• Compact and mixed-use• TOD • Mix-use strategies for commercial and residential

areas• Mix-use strategies for working and living areas• Townscape systems

Place Making Of Public Facilities

• Public places and public facilities• Availability of public facilities and shared

community service centers

Neighborhood Public Spaces & Informal landscape

Geographic Relations地缘关系• Insurance for native villagers• Social integration of immigrants• Demographic features

Community of Living生活共同体• Profiles and daily life• Community differentiation• Community of living

Social And Cultural Media• Media influence • Frequency of using

Community Business & Commercial Industry社区商业与产业培育• Developing mode• Industrial cultivation

Social Innovation

Urban Tourism

`LAND OPERATION

TOPBOTTOM

BOTTOMTOP

`INTERESTS

COORDINATION AMONG STAKEHOLDERS

`COMMUNITY Governance

VOLUNTARY

RIGHTS ACTIVIST

SENSE OF COMMUNITY

COMMUNITY SERVICES FACILITATION `COMMUNITY PLANNER

19

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Morphology

Refined Design Of Multi-Functional Residential Area

• Compact and mixed-use• Pedestrain friendly• Mix-use strategies for

commercial and residential areas

• Mix-use strategies for working and living areas

New Town

Neighborhood

动区

静区

小镇风情度假区

森林生态休闲区

核心旅游区2 dimensions in spatial planning

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Morphology

Place Making

Public places and public facilities

Availability of public facilities and shared community service centers

New Town

Neighborhood

2 dimensions in spatial planning

Mei Li Zhou ChurchLocated in a wooded development in Hangzhoug China, the Mei Li Zhou Church was an attempt to merge seamlessly not only into the buildings surrounding nature, but also into the lives of those who live within its surrounding community.Mei Li Zhou Church was not only created for religious services, but as both a spiritual and community gathering space for broader area.

Liangzhu Culture Museum The museum houses a collection of archaeological findings from the Liangzhu culture, also known as the Jade culture (c3000 BC). It forms the northern point of the ‘Liangzhu Cultural Village’, a newly created park ( 0.54km2 ) town near Hangzhou.The museum is designed by David Chipperfiled, in which there are 3 interior gardens which along with benches reveal the character of Chinese traditional gardens.

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MorphologyNew Town

Neighborhood

2 dimensions in spatial planningCULTURAL FACILITIES文化设施SPORTS FACILITIES休闲运动设施COMMERCIAL FACILITIES商业设施MEDICAL FACILITIES医疗设施EDUCATION FACILITIES教育设施

LIANGZHU CULTURAL MUSEUM良渚博物馆

MEI LI ZHOU CHURCH美丽洲教堂

MEI LI ZHOU PARK美丽洲公园

MOUNTAIN CLIMBING TRAIL阳光天际游山步道BAI LU WAN PARK白鹭湾公园

YU NIAO LIU SU COMMERCIAL CENTRE玉鸟流苏

TOURISM HOTEL白鹭湾君澜度假酒店

YU NIAO KINDERGARDEN玉鸟幼儿园

EXPERIMENTAL SCHOOL劝学里 (9 年制实验学校 )

CHA YU PARK茶语公园MOUNTAIN CLIMBING TRAIL竹径茶语游山步道YOU GARDEN悠园

HEALTH CARE CENTRE浙医一院良渚保健中心

Public Facilities

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Morphology

Neighborhood public spaces & informal landscapes

Spatial Formation of Bailujun Precinct

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Ethnography• From house owner to community member• Harmonious geographical relationships• Security for native villagers• Social integration between native and new

villagers

LIVING ENVIRONMENT OF NATIVE VILLAGERS原住民生活空间 LIVING ENVIRONMENT OF NEW RESIDENTS新住民生活空间

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Ethnography

COMMUNITY OF LIVING

From house owner to community member

• Profiles and daily life• Community

diversification• Community of living

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EconomyCOMMUNITY BUSINESS & COMMERCIAL

VILLAGE LIBRARY

VILLAGE CANTEEN

PUBLIC SERVICES DIRECTLY PROVIDED BY REAL ESTATE ENTREPRISE自持商业设施3-3-3 mode1/3 run by VANKE itself, 1/3 by branded retails, 1/3 by local villagers

The public service is divided into restaurants, community services and special services for children and elder people.

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EconomyURBAN TOURISM

Nature + Culture

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28Community Centre

Why do Young Chinese People Choose To Live Here?

10-year cultivation of commercial industry From introducing mature retailers to

cultivating specific self-run public services From satisfying basic requirements to

fulfilling the needs of diverse of community life

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LIANGZHU CULTURE VILLAGEHangzhou, China

Community services for commerce, culture, education, retirement, etc.

Exceptional natural foundation

New harmonious geographical relations

Creation of informal economic and job opportunities

Affordable housing for young professionals

Mix of various social groups

Sprout of community planners

Suburb, local economy insufficient to support large amount of jobs, residential, and touristic town?

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Community Indications of Vitality

SENSE OF COMMUNITY社区意识

RIGHTS ACTIVISM维权活动

VOLUNTARY 志愿性Community Services

Facilitation社区服务Community Planner社区规划师

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Suzhou China-Singapore Industrial Park

Total area: 278km2

• 3.4% land• 5.2% population• 7% electricity consumption• 2% COD emissions • 15% Suzhou GDP• 25% of foreign capital

Practice Analysis B:

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China-Singapore Suzhou Industrial Park • High quality planning• Strict functional zoning• Government-led urban development

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High-quality planning Strict functional zoningGovernment-led

urban development

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• Primary development:Entrepreneurial Government: high land premium, successful land operationsSocially Responsible Government: high-quality social service facilities (community center), affordable housing, middle class or high income class oriented market. Good ecosystem and slow-transport/pedestrian system.

• Secondary development: new town with sense of happiness and high occupation rate

01 02 03 04 05 06 07 08 09 10 11 12 01 0210000120001400016000180002000022000240002600028000

House rate / m2

032015 2016

Time

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“ 菁仁公寓”优租房

Housing Type Rent (plus maintenance fee) Internet Cleaning Fee DepositSingle bedroom 900yuan/month/room 30yuan/month/room 200yuan/month/room 200yuan/unit

Page 36: The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

邻里中心 community center

学校 school

商业零售 retail

36

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1. Community center: one stop service

The community center is centralized with other community facilities such as schools and commercial retailers which is convenient for residents.

2. Disappearance of retail shops on the streets

However, the disappearance of retail shops on the streets make the urban atmosphere dull and lack of vivid life activity. Lack of activities and people. Not because of lack of public space, rather it is the design of the space which leads to a low usage of utility.

3. Traffic jams

Since the industrial park is the new business center of Suzhou where there are plenty of job opportunities, this clean and tidy city is always turned into a huge and crowded places during commuting weekdays. Moreover, huge road grid (basic units of road for 1 km), public transport is not convenient, not pedestrian friendly.

Suzhou China-Singapore Industrial Park

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3 days ago, 2016-02-21

The State Council of PRC "new regulations on urban planning and construction"

“China will promote new block/street structure in new residential areas. Gated communities will no longer be built. The built residential areas and danwei housing will gradually be opened up, to convert internal roads to public streets, to solve layout issue with the transportation networks, and to promote efficient use of land.”

(In old days, gated community is a way to manage risk and cut down on the costof city management)

Taking social responsibilities as a chance to create shared value

Community Vitality 

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Xiangshan South Road, Project, Nanchang-Urban renewal Practice Analysis C:

Page 40: The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

40Underdeveloped local economy Eager for capital

Xiangshan South Road, Nanchang-Urban renewal

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Xiangshan South Road, Nanchang-Urban renewal

Rich local culture

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Xintiandi, Nanchang

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Protection and retrofit of the historical buildings

Xiangshan South Road, Nanchang

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Xiangshan South Road, Nanchang Owner: Greenland groupPlanning concept: SOMPlanning and design: Urban ArchitectureArchitecture: Urban ArchitectureLandscape: SWAInterior design: HBA

Globalization

Innovation?

Urban renewal Gentrification.

Reservation of the Authenticity?

Page 45: The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

45Greenland Group - aggressive development and its intrinsic mode

Strategic Positioning战略定位

Do what government want to do but hard to do

. 做政府想做但不易做的事Second and third-tier cities 二三线城市

Product advantages产品优势

New town comprehensive development新城综合开发

Super high-rise超高层

Complex综合体

Market effect市场效果 Fit the urban development符合城市发展方向

Low cost低成本 High premium溢价高

Autonomous investment主动投资

Bank investment银行资金

Diversified investment多元化资金

 leverage撬动

Greenland Group’s business model

绿地集团商业模式 “the developers who know government the best”

Xintiandi, Shanghai

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Developer and local government’s shared Value Orientation

• Profit / benefits • Public imageSome local governments welcome such changes to make the urban space modern, fascinating, and global. Prefer these kinds of “safe,” breathtaking, dramatic urban images, even though they are all homogenized. 

Every city wants their own Guggenheim, SOHO, Tianzifang, and the tags of “vintage,” “innovative,” “art,” “cool.”  

Is it proper for a third-tier inland city, such as Nanchang, to use Shanghai “Xintiandi”’s urban renewal model?

How to balance the aggressive development mode and the local context to avoid the homogenizing effects of a GLOBAL TOOLKIT FOR URBAN RENEWAL?

A GLOBAL TOOLKIT FOR URBAN RENEWAL ?

Page 47: The Real and the Imagined Socially Responsible Real Estate in China - Context, Discourse and Practice by Prof. CHEN

Ann, Weizhen Chen, Tongji University

[email protected]