Fujian Xiamen Increases the Supply of Affordable Rental Housing
Release time:
2023-08-29
Source:
《 China Construction Daily》
Recently, Xiamen, Fujian Province issued a notice on the implementation plan for the temporary transformation of existing non-residential properties into affordable rental housing. The policy for non-transformation rentals has been revised and improved to inject new vitality into activating existing assets and increasing the supply of affordable rental housing.
In recent years, Xiamen has encouraged companies to participate in the investment and construction of affordable rental housing through various means, including "land expansion, financial subsidies, and financial support." This effort aims to help more young people and new residents achieve their dreams of settling on Egret Island. Up to now, Xiamen has raised over 100,000 sets of affordable rental housing from 52 projects, with 34,000 sets already in operation.
Activating Land Resources to Boost Participation
The significant development of affordable rental housing requires support from land policies. Xiamen has optimized land supply and provided varying levels of incentives for different types of investors concerning land nature, land use terms, and land price supplement payments. Simultaneously, the city has promoted the redevelopment of underutilized land, revitalizing idle land resources and addressing land scarcity challenges. For example, the Yugu Apartment (Malong Store) project utilized rural collective land for construction, revitalizing assets that had been idle for ten years, benefiting businesses, villagers, and tenants alike.
Xiamen has established seven construction channels, including temporary transformation of non-residential properties, enterprise-owned land construction, construction with dual control indicators in industrial parks, and construction using rural collective reserved development land.
Financial Incentives to Reduce Operating Costs
In order to support sustainable operations for businesses, Xiamen has taken multiple measures. It has not only provided actual financial support by granting subsidies from central government pilot funding to reduce investments during the construction phase but also focused on long-term strategies by implementing tax reduction measures to lower operating costs for enterprises in the medium to long term, creating a virtuous cycle of development.
"We combine short-term and long-term considerations, calculate the 'benefits' for businesses, and provide comprehensive support for the entire process of investment, construction, and operation of affordable rental housing," said a relevant official. Affordable rental housing projects in Xiamen that meet the conditions can apply for a 1.5% value-added tax rate reduction and a 4% property tax rate reduction, and currently, 47 projects have received subsidies, with tax reductions and exemptions totaling over RMB 100 million.
Financial Support to Attract Funding
In addition to tax and fee reductions, how can social capital be further directed towards continuous investment, alleviate the financial pressure on companies developing affordable rental housing, and broaden financing channels for their construction?
In July of last year, the Zhongjin Xiamen Anju Bao Rental Housing Closed-End Infrastructure Securities Investment Fund passed the Shanghai Stock Exchange's review. It became one of the first domestic projects to issue real estate trust investment fund (REITs) products for the development of affordable rental housing, raising a total of RMB 1.3 billion.
Apart from supporting the issuance of REITs financing for the construction, transformation, and operation of affordable rental housing, Xiamen has also increased financial support for the construction of affordable rental housing. It encourages banks and financial institutions to provide long-term loans to entities building and operating affordable rental housing in a market-oriented manner.
For commercial loans related to affordable rental housing projects, commercial banks do not include them in real estate loan concentration management. For projects that convert commercial real estate into affordable rental housing, banks offer affordable rental housing loans with applicable loan terms and interest rates.
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