Shanghai Launches First "Housing Acquisition and Replacement" Project to Boost Affordable Rental Housing
Recently, Shanghai’s first "housing acquisition and replacement" project officially signed and landed in Jing’an District. Mr. Shi, the first applicant, signed a stock housing acquisition contract with Jing’an District Affordable Housing Company and a sales contract with a new commercial housing developer, completing the entire process from housing stock acquisition, resident replacement to affordable rental housing raising in one go. This marks a breakthrough in Shanghai’s efforts to revitalize stock housing through market-oriented means and efficiently raise affordable rental housing.
For many citizens living in Shanghai’s central urban areas, the biggest obstacle to improving housing conditions is not the lack of willingness to move, but the difficulty in quickly monetizing old houses. The "housing acquisition and replacement" model launched by Jing’an District precisely addresses this problem. Guided by the principle of "government guidance, state-owned enterprise implementation and market operation", Jing’an District Affordable Housing Company acts as the main implementation body to acquire stock sets of small-sized housing with clear property rights and appropriate total prices in the district.
He Zhiyong, Deputy Director of Jing’an District Housing Administration Bureau of Shanghai, introduced that the acquisition standards are clear: stock houses with a total price of less than 4 million yuan, a building area of less than 70 square meters, and in principle within 3 kilometers of rail transit stations, close to industrial parks and core business districts. Such housing has the basic conditions to be converted into affordable rental housing.
In terms of specific operations, residents with housing improvement needs can first lock in the intended new commercial housing and purchase conditions in Jing’an District, then submit an application for old house acquisition to Jing’an District Affordable Housing Company. The company will acquire the stock housing after reaching an agreement with the residents in accordance with standardized evaluation procedures, and issue a "housing voucher" to the residents, which is earmarked for purchasing new commercial housing in the district. After the old house is acquired, settlement is made with the earmarked "housing voucher", forming a closed loop of "old house acquisition - new house purchase".
"The evaluation price is based on the market transaction price of houses in the same community and the same location, evaluated by professional appraisal institutions, recorded by state-owned asset supervision departments, and finally confirmed through negotiation between both parties, with the core principle still based on the market price," He Zhiyong said. Compared with residents conducting market transactions independently, this model provides an additional channel for residents to dispose of their houses without paying intermediary service fees.
Huang Xing, Director of Marketing Management Department of Poly Real Estate Shanghai Company, said that since the announcement of Jing’an District’s "housing acquisition and replacement" policy, the number of consultation calls for the company’s relevant commercial housing projects has increased significantly, and the company will provide certain preferential treatment and subsidies to smooth the replacement chain. Chen Ji, General Manager of Poly Real Estate Shanghai Company, noted that this is not only an innovation in transaction mechanism, but also a warm and powerful people’s livelihood project, helping to convert old houses deposited in residents’ hands into "flowable assets".
Jiang Yan, Executive Director of Shanghai Jing’an Zhabei Affordable Housing Company, introduced that after the acquisition through this model, the company will apply to Jing’an District Housing Administration Bureau for the identification of the housing’s affordable rental housing nature. After unified standardized renovation and upgrading, it will be included in the district-level affordable rental housing management system, providing targeted housing support for new citizens and young people at a rent lower than the market rent in the same area.
Shanghai has designated Jing’an District, Xuhui District and Pudong New Area as the first batch of pilot areas for acquiring second-hand housing for affordable rental housing in February this year. Yan Yuejin, Deputy Dean of Shanghai Ehanzhuang Real Estate Research Institute, predicted that the pace of follow-up pilot promotion will further accelerate, and the relevant model is expected to be promoted in more areas. While facing challenges such as high capital costs, this innovative model has laid a solid foundation for Shanghai to optimize the housing supply structure and promote the healthy development of the real estate market.
