Multiple Disputes Over the Housing Expropriation and Compensation Regulations Remain Unresolved as Demolition Frenzy Continues
How to define public interest? How to supervise forced relocation
Many disputes over the “Housing Expropriation and Compensation Regulations” remain unresolved
By our reporter Wang Yijun
13,437 person-times - this is the total number of person-times for the 15 days from January 29 to February 12 during which people logged onto the official website of the Legislative Affairs Office of the State Council's draft regulations and rules public opinion solicitation system to browse or submit opinions on the “Regulations on the Expropriation of and Compensation for Houses on State-Owned Land (Draft for Solicitation of Opinions)” (hereinafter referred to as the “Expropriation Regulations”). This figure set a record for the highest number of participants in public consultation on administrative legislation by the State Council to date.
“Without public interest, there is no expropriation; without reasonable compensation, there is no expropriation; without expropriation and compensation, there is no demolition; without a court ruling, there is no forced demolition.” This is the rule-of-law principle that expropriation and demolition actions must follow under China's Constitution and Property Law. China Youth Daily recently interviewed experts and scholars who submitted amendment suggestions to the Legislative Affairs Office of the State Council, as well as lawyers engaged in demolition legal practice. The relatively consistent view is that the overall direction of the Expropriation Regulations reflects these principles well, but there is still much room for improvement before the three different stages of “expropriation, compensation, and demolition” can truly each take their proper place and always operate on the track of the rule of law.
The highly controversial Article 40: Should the regulatory scope of the Expropriation Regulations include demolition not for public interest?
At the two previous legislative seminars held by the Legislative Affairs Office of the State Council, the experts present firmly opposed writing it into the regulations, but it was ultimately written into Article 40 of the draft for solicitation of opinions, and during this consultation process it encountered almost one-sided opposition.
On February 7, at the very start of the consultation meeting on the Expropriation Regulations held by the Administrative Law Professional Committee of the All China Lawyers Association, Article 40 came under severe criticism from most of the lawyers present.
Wang Ling, a lawyer at Beijing Cailiang Law Firm, believes that the Expropriation Regulations state the regulatory scope clearly at the outset, namely the legal act of “expropriating houses of units and individuals on state-owned land for the needs of public interest and giving compensation to the owners of the expropriated houses.” The draft for solicitation of opinions uses the vast majority of its space to regulate expropriation activities carried out for public interest. It is inappropriate for the Expropriation Regulations to make specific provisions on demolition not for public interest. Demolition not for public interest should, in accordance with legal provisions and with reference to internationally common practice, return to the civil law domain of voluntary and equal consultation.
Shen Kui, one of the five Peking University scholars who once advised the Standing Committee of the National People's Congress to review the current “Regulations on the Administration of Urban Housing Demolition,” pointed out in “Eight Suggestions on the Expropriation Regulations” that Article 40 is intended to avoid the dilemma of this work having “no law to follow” after the new regulations are issued, but he suggested deleting this article, and that it would be best to provide for it in separate legislation.
Shen Kui stated that the second paragraph of Article 40 requires construction units to prepare a demolition implementation plan and submit it to the housing expropriation management department for approval. However, since the government cannot carry out housing expropriation for non-public-interest needs, and the house owners still enjoy ownership of the houses, on what grounds can the housing expropriation management department approve it? The Expropriation Regulations have already abolished the demolition permit system in the old regulations. Would such approval become a “disguised” demolition permit?
In view of this, in its suggestions to the Legislative Affairs Office of the State Council, the All China Lawyers Association proposed amending Article 40 to read: “Demolition not for public interest shall be conducted in accordance with the provisions of the General Principles of Civil Law, the Property Law, and the Contract Law. Demolition not for public interest shall not involve forced relocation.”
Apart from demolition not for public interest, whether the regulatory scope of the Expropriation Regulations should cover the expropriation of houses on homestead land was also a focus of this dispute.
Many lawyers believe that because the Land Administration Law and its Implementing Regulations, especially the compensation procedures, focus more on agricultural land in the expropriation of collective land, while the former “Regulations on the Administration of Urban Housing Demolition” explicitly stated that they only regulate housing demolition activities on state-owned land. In practice, the large number of “urban village” demolition problems has become a legal vacuum, and some cities have even independently formulated a “collective land housing demolition system” that neither conducts expropriation approval and compensation in accordance with the Land Administration Law nor compensates according to the market price standards for houses on state-owned land, causing a large number of social conflicts. For this reason, they suggested further clarifying the applicable scope of the Expropriation Regulations to prevent expropriation on collective land from bypassing legal procedures, and proposed changing Article 41 to read: For the needs of public interest, when expropriating houses of units and individuals on collective land and giving compensation to the owners of the expropriated houses (hereinafter referred to as “expropriated persons”), the legal procedures stipulated in the Land Administration Law and the Implementing Regulations of the Land Administration Law shall be followed.
Chen Wenqing, a lawyer at Liaoning Zhiku Law Firm, does not agree with incorporating the demolition of houses on collective land into the Expropriation Regulations. He believes that government expropriation of houses on collective land focuses more on protecting the subsequent livelihood of the expropriated persons, rather than on so-called fair buying and selling based on house value. The demolition of houses on state-owned land and collective land differs in procedures, purposes, and compensation for the interests of expropriated persons, so it is inappropriate to merge the two.
Sun Guangxiang, a lawyer at Beijing Tongyiyuan Law Firm, believes that there is no essential difference between the expropriation of houses on collective land and expropriation on state-owned land. The value of the object of expropriation depends entirely on the real estate market price, and the expropriation of farmers' residences itself does not give rise to employment placement and social security issues, so they should not be treated differently.
Dispute over the definition of public interest: Does “construction of office buildings for state organs” belong to public interest?
Regarding the difficulties encountered in formulating the Expropriation Regulations, Cao Kangtai, director of the Legislative Affairs Office of the State Council, once summarized them into three aspects, the first and foremost being how to define public interest. Article 3 of the Expropriation Regulations defines public interest for the first time in the form of an enumerated list plus a catch-all clause, but some of the matters listed as belonging to public interest also aroused considerable controversy.
How large is the scope of “key national support and inclusion in planning”? The lawyers present believed that the wording “key national support and inclusion in planning” is not rigorous enough. Does so-called support mean project approval by departments such as the National Development and Reform Commission, or does it refer to the state's industrial policy? Or does it refer to construction projects fully funded by the treasury? Does planning refer to “urban planning” or “development planning”?
As to whether for-profit public utilities belong to public interest, the experts and lawyers present also had considerable disagreement. Lawyers Xie Huidin and Chen Wenqing, as well as Xiong Wenzhao, a professor at the Law School of Minzu University of China, all believed that under market economy conditions, with the diversification of investment entities, it is no longer realistic to judge whether something is a public welfare undertaking based on whether it is funded by the state or by private capital. Xiong Wenzhao even believed that commercial real estate development, as long as it can improve the people's living standards and the urban environment, may also be public interest. Meanwhile, non-profit construction traditionally regarded as public interest (such as urban green spaces), if its utilization rate is too low and it creates an unnecessary fiscal burden, cannot be counted as public interest either.
The Expropriation Regulations provide that the construction of office buildings for state organs belongs to public interest, and the lawyers present debated this fiercely. Zhou Yong, a lawyer at Jiangsu Zhouyong Law Firm, believed that the approval authority for the “construction of office buildings for state organs” to be included in public interest needs to be clarified, and it cannot be said that building houses for government organs is public interest. Sun Guangxiang directly denied that office buildings for state organs are public interest, holding that any person and unit has the need to improve working conditions, and it cannot become public interest just because the people working in them are government officials. Several other lawyers also expressed concern about the reality of riding on the coattails of “office buildings for organs” under the name of “training centers and conference centers” while actually operating “hotels, resorts, leisure and entertainment venues.”
How can “demonstration meetings” and “hearings” avoid becoming mere formalities?
The lawyers present believed that the provisions on expropriation procedures in the Expropriation Regulations need to be improved. Articles 9, 10, and 12 provide for the demonstration and hearing procedures before an expropriation decision is made, but these provisions are not detailed enough and their operability needs to be strengthened. First, the method of soliciting opinions is not clear. For example, the “other methods” provided for in Article 10 have no clear statutory form, making it difficult to protect the people's right to know and right to defend themselves. Second, there is no quantitative indicator for what constitutes a “major dispute,” and the power of interpretation lies with local governments, which makes it difficult for public opinions to be respected and makes the legislative intent of this provision difficult to implement. Third, the mechanism for resolving major disputes is merely to report to a higher-level government for adjudication, still handing the power to determine public interest to local governments rather than introducing decision-making by people's congresses or judicial mechanisms. Finally, the procedures for hearings are not clearly stipulated; for example, there are no clear provisions on the proportion of participants in hearings or the method for determining participants.
In addition, regarding “(adopting) demonstration meetings, hearings, or other forms to listen to public opinions” in Article 10, most of the lawyers present believed it was too vague and should be strictly stipulated as “convening a hearing.” They further proposed that “the number of representatives of expropriated persons participating in the hearing shall not be less than five percent of the total number of expropriated persons, and shall not be less than seventy percent of the number of representatives present. Representatives of expropriated persons shall be elected by the expropriated persons who register to attend the meeting; where election is impossible, they shall be determined by random drawing.” “The local people's government at or above the county level shall, within fifteen days of the hearing, notify the hearing representatives in writing of the adoption or non-adoption of the opinions of expropriated persons, the public, and experts, as well as the reasons, and make a public announcement. If no notice or announcement is made, no expropriation decision may be made.”
The lawyers present all believed that the “major dispute” in Article 12 should be further explained to avoid giving expropriation authorities too much discretionary space. If more than fifteen percent of the representatives at a hearing oppose the expropriation, it should be regarded as a “major dispute.”
How should compensation be given: Can houses and land be compensated separately?
The scholar Qiu Feng wrote that the essence of house transfer in cities is the transfer of land property rights. What is truly valuable is not the house, but the land occupied by the house. The essence of expropriation is also the government using coercive power to purchase citizens' property rights to the land occupied by their houses. What the demolisher wants to obtain is not the house, but the land occupied by the house, or more precisely, the construction-use right to the state-owned land occupied by the house.
However, because China's demolition system is based on this confused concept, it has led to various problems. For example, the compensation standard for evaluating demolition - an evaluation of what? The price of the house? But how much can the construction cost of a house be? Avoiding land property rights has become a powerful means for some local governments and developers to lower compensation standards. This is the root cause of disputes and conflicts triggered by demolition, and the Expropriation Regulations must move beyond this misunderstanding.
It has been reported that a judge named Liu Xing, who worked for 10 years in the administrative division of a basic-level court in Beijing, submitted a set of amendment suggestions on the Expropriation Regulations to the Legislative Affairs Office of the State Council before the Spring Festival, believing that the amount of monetary compensation provided for in the draft for solicitation of opinions should be determined based on factors such as the location, use, building structure, age, and building area of the expropriated house, according to the appraised price in the real estate market; when houses are expropriated, the state-owned land use right shall be recovered according to law.
“But how compensation is to be made after lawful recovery, the regulations do not say.” Liu Xing believes that this kind of provision carried over from the old regulations cannot solve the problem. Houses are houses, land is land. Only by separately clarifying how houses are compensated and how land is compensated can disputes be reduced and the basis for handling disputes be clarified. He suggested that legislation list land use right compensation as a separate item for evaluation and compensation, and that what this item includes must be handled with caution.
In the face of forced relocation, can legal remedies and administrative supervision be effective?
Forced demolition is one of the issues that has triggered the most intense social conflicts in recent years. The Expropriation Regulations basically copy the provisions of the “Regulations on the Administration of Urban Housing Demolition” regarding the conditions and procedures for implementing forced relocation, except that “demolition” has been changed to “relocation.” The experts and lawyers present believed that if forced relocation is not strictly regulated, so-called democratic decision-making and due process will hardly be effective.
The Expropriation Regulations provide that expropriated persons may apply for administrative reconsideration and file lawsuits against specific administrative acts such as expropriation decisions and compensation decisions, but there is no clear provision on whether execution of the administrative act is suspended during reconsideration and litigation.
While fighting a demolition lawsuit, the house may be lawfully demolished, so what meaning does the litigation still have? The lawyers present suggested that where reconsideration or litigation is filed against a compensation decision, enforcement of forced relocation should be suspended during the period of administrative reconsideration and litigation. If there is indeed an urgent need for public interest, execution of the compensation decision may not be suspended. If a compensation decision is confirmed as illegal by a reconsideration organ or a people's court, the local people's government at or above the county level that made the housing compensation decision shall compensate the expropriated person for losses and bear other corresponding legal liabilities.
Execution of a specific administrative act is not suspended during litigation - this is provided in Article 44 of the Administrative Litigation Law.
“Taking advantage of this opportunity for expropriation legislation, if the principle of suspending execution during litigation can be established, and only when major public interest is involved may the expropriation authority apply to the court for permission to execute and bear the burden of proof, with the court exercising discretion on the basis of weighing public interest against private interest, then the court will scrutinize the expropriation authority's application very strictly, which will help protect the lawful rights and interests of persons subject to demolition.”
Article 44, item 3 of the Administrative Litigation Law provides: “Where laws or regulations provide for suspension of execution, execution of the specific administrative act shall be suspended.” On this basis, Liu Xing believes that the current Administrative Litigation Law has already reserved a “window” for providing for “suspension of execution during litigation.”
“Unfortunately, this window has always been ignored, and almost no law or regulation has activated this dormant clause.” Liu Xing said that since the formulation of the Expropriation Regulations this time takes protecting the interests of expropriated persons as its legislative guiding spirit, then this “window” can fully be used to bring about a “fundamental change” in the current provisions, namely, on the issue of demolition and expropriation compensation, establish the principle of giving priority to suspension of execution during litigation, supplemented by court-approved execution upon application by administrative organs.
With regard to administrative supervision, the lawyers present believed that the Expropriation Regulations are too vague. For example, in Article 7, “report to the relevant people's government, housing expropriation department, and other relevant departments,” the “housing expropriation department” is itself the implementing body of expropriation activities and the unit most likely to “violate these regulations,” while the remaining two “relevant” entities are also very unclear. In practice there is no operability, which will only lead to buck-passing among government departments and exhausted running around by expropriated persons.