Ministry of Land and Resources Explores Comprehensive Bid Evaluation for Land Transfers, Cracks Down on Land Hoarding and Speculation and Illegal Land Occupation

Ministry of Land and Resources Explores Comprehensive Bid Evaluation for Land Transfers

Ministry of Housing and Urban-Rural Development: Hot-Spot Cities to Restrict Speculative Purchases of Multiple Homes

Liu Zhanchao

In order to effectively participate in real estate regulation, the Ministry of Land and Resources (hereinafter referred to as the “Ministry of Land and Resources”) will crack down hard this year on land hoarding and land speculation, while exploring comprehensive bid evaluation methods for land transfers.

The Ministry of Land and Resources recently issued the "Project for Safeguarding Development and Safeguarding the Red Line——2010 Action Plan" (hereinafter referred to as the "Dual Safeguard Plan") to localities. Previously, the "Dual Safeguard Plan" had been deliberated and approved at the 6th ministerial office meeting of the Ministry of Land and Resources.

According to a Xinhua News Agency report, the Ministry of Housing and Urban-Rural Development held a teleconference on the 13th. A relevant official emphasized that localities should actively develop public rental housing and price-capped commodity housing, and accelerate the resolution of housing difficulties for lower- and middle-income groups. In particular, the construction of public rental housing is the focus of the next stage of work, and supply this year should increase noticeably compared with last year.

The official stated that the excessively rapid rise in housing prices in some cities must be resolutely curbed. At present, while striving to increase the supply of ordinary commodity housing, emphasis must be placed on strengthening demand management, implementing stricter differentiated credit and tax policies, curbing investment and speculative home purchases, and further strengthening market oversight. In cities where housing prices are too high, rising too fast, and housing supply is insufficient, speculative behavior of purchasing multiple homes or buying housing in large quantities shall be restricted. Illegal and irregular behavior such as withholding properties from sale, hoarding housing sources, and driving up housing prices must be publicly exposed and dealt with seriously.

Departmental Coordination and Joint Action

Recently, the Ministry of Land and Resources has deployed a special rectification campaign for prominent problems in real estate land use, requiring inspection and handling work to be completed before mid-July. Provincial-level land and resources management departments shall form written reports on the special rectification and submit them together with reports on the cleanup of transfer contracts to the Ministry of Land and Resources before the end of July.

Previously, a person from the Ministry of Land and Resources told a reporter from China Business News that in this special rectification campaign, the statistical cutoff date for all types of illegal and irregular behavior was December 31, 2009. That is, for real estate development projects for which transfer contracts and allocation decisions had been signed before that date but which had not yet been completed or started, as long as there existed illegal or irregular land use behavior such as idle land, land hoarding and speculation, or land supply for villas, they all fell within the scope of the rectification.

In addition, the Ministry of Land and Resources stated that this year it will strengthen coordination between real estate land policies and other regulatory policies, continue to improve information sharing and coordinated joint action with relevant departments, and prevent systemic risks.

Xu Shaoshi, Minister of Land and Resources, said at the beginning of this year that in 2009 the Ministry of Land and Resources saw a major change in its participation in macroeconomic regulation, namely “helping the China Banking Regulatory Commission review access for land mortgage loans and helping the China Securities Regulatory Commission review access for land asset financing.”

Bidding, Auction, and Listing Once Again a Hot Topic

On the issue of reforming the land transfer model, which has recently attracted unusual public attention, the Ministry of Land and Resources also revealed that it will implement a pre-application system for land transfers and explore comprehensive bid evaluation methods for land transfers. It will improve the land price adjustment mechanism and organize work to update benchmark land prices.

Recently, officials of the Ministry of Land and Resources have stated on multiple occasions that the current bidding, auction, and listing system for land transfers must be reformed and improved.

Liu Suichen, Director of the Regulation and Monitoring Department of the Ministry of Land and Resources, said last week at the press conference for the "2009 China Land and Resources Bulletin" that the government will uphold and improve the land bidding, auction, and listing system. First, the supply of land for indemnificatory housing must be strengthened, and its comprehensive share must reach 70%. Second, transaction qualifications must be strictly assessed, and comprehensive requirements such as project development and construction cycles and the proportion of small- and medium-sized units must be increased, thereby regulating the land transfer market.

In addition to the above measures, another major focus of the "Dual Safeguard Plan" is protecting the red line of 1.8 billion mu of arable land. The Ministry of Land and Resources this time requires implementing the government's responsibility for arable land protection, actively promoting land consolidation, ensuring that the quantity of arable land does not decrease, that the quality of arable land improves, and safeguarding farmers' rights and interests.

It is reported that this year the Ministry of Land and Resources will also join with the Ministry of Agriculture and the National Bureau of Statistics to carry out inspections of provincial-level governments' targets for arable land protection responsibility, and implement reward and punishment measures based on the inspection results. In the previous inspection, the three ministries and commissions scored and ranked local provinces' arable land protection work, and the top five provinces were rewarded with varying amounts of land quotas.