At present, the process of urbanization is accelerating, the demand for urban supporting infrastructure is also increasing, and a new round of urban renewal action is constantly advancing. On June 2, Shanghai announced the first to establish the nation’s largest urban renewal fund; on June 18, Chongqing issued the "Chongqing Municipal Urban Renewal Management Measures"; on June 10, Beijing issued guidance on the implementation of urban renewal actions... Note to reporters Recently, urban renewal action plans have emerged intensively in many places. At the same time, a package of major urban renewal projects such as infrastructure renewal and old community renovation have been accelerated. Facing the huge investment space, diversified investment and financing mechanisms such as fiscal funds at all levels, financing funds from financial institutions, and social capital are being formed at an accelerated pace.

The outline of the "14th Five-Year Plan" points out to accelerate the transformation of urban development methods, coordinate urban planning and construction management, implement urban renewal actions, and promote urban spatial structure optimization and quality improvement. This is also the first time that the term "urban renewal" has appeared in the five-year plan for national economic and social development, and has risen to the national strategic level. The 2021 government work report puts forward “to develop and expand urban agglomerations and metropolitan areas, promote urbanization with counties as an important carrier, and implement urban renewal actions”.

What is urban renewal

Urban renewal mainly includes improving the urban spatial structure, implementing urban ecological restoration and functional improvement projects, strengthening the construction of residential communities, advancing the construction of new urban infrastructure, enhancing urban flood control and drainage capabilities, and promoting urbanization with county towns as an important carrier. The industry pointed out that the implementation of urban renewal actions and plans to promote a series of urban construction projects and development projects will help to fully release the huge potential of China's development and form new economic growth points.

“Urban renewal is an inevitable requirement for promoting the high-quality development of people-oriented new urbanization by optimizing and adjusting the urban spatial form, perfecting urban functions, increasing the carrying capacity of the city, and improving the quality of life of residents. Entering a period of quality improvement and transformation, urban renewal will also become an important means of benefiting people's livelihood and expanding domestic demand." Gao Ruidong, chief macro economist, managing director of Everbright Securities, told reporters.

"Implementing urban renewal is conducive to promoting the development of new industries and new business forms in the city, and stimulating the new economic vitality of the city. At the same time, further tapping the investment potential and forming a larger investment scale." Fan Ruoying, a researcher at the Bank of China Research Institute, told reporters.

According to the survey and estimation of the Urban Renewal Branch of the Real Estate Chamber of Commerce of the All-China Federation of Industry and Commerce, the urban renewal process will leverage 10 trillion domestic demand.

A new round of urban renewal action is speeding up and landing

The "Chongqing City Urban Renewal Management Measures" pointed out that the main contents of urban renewal include improving life functions, making up for shortcomings in public facilities, improving industrial functions, creating a carrier for employment innovation, improving ecological functions, protecting and restoring green spaces, green corridors and greenways, and improving humanistic functions. , Accumulate the charm of cultural elements, improve safety functions, and enhance disaster prevention and mitigation capabilities.

Beijing's guidance on the implementation of urban renewal actions clarified that urban renewal actions include the renovation of old communities, the renovation of dilapidated buildings, the renovation of old factories, the renovation of old buildings, and the renovation of bungalows (yards) in the functional core area of the capital. Recently, four implementation rules including the "Opinions on the Renewal and Reconstruction of Old Residential Districts", which are associated with it, have been formally issued.

In addition, Liaoning stated that it will issue the implementation opinions on the construction of the urban renewal pilot area and the project construction plan of the urban renewal pilot area. A few days ago, Liaoning also issued 9 local standards for urban renewal.

While urban renewal plans in various regions have emerged one after another, the construction of a package of major projects related to it will also be accelerated.

It is understood that Fuzhou City has launched a comprehensive urban renewal quality improvement work focusing on housing, transportation, and water environment. Among the 921 projects sorted out, 753 projects have been started, with an operating rate of more than 80%.

The Zhuzhou City Urban Renewal Action Plan in 2021 shows that in terms of infrastructure renewal, we will strive to start construction of 131 municipal infrastructure projects and complete 157 infrastructure upgrade projects throughout the year. As an important task of urban renewal, the 1,000 old communities planned to be renovated in Liaoning Province in 2021 will all start construction by the end of June, and the basic renovation project will be completed by the end of the year.

Mass investment projects, where does the money come from

Yang Tao, dean of the Planning and Design Institute of the China Academy of Urban Construction, told reporters that in the long run, sustainable and diversified methods should be explored such as government guidance, social capital participation, and independent updates by residents and other stakeholders. It is necessary to strengthen mechanism innovation and make good use of development rights transfer and plot ratio compensation in different places to solve the problem of social capital unable to balance locally. Encourage social capital to participate in later operations. Encourage residents to contribute funds, participate in micro-renewal, and conduct in-depth research on the sources of power and compensation mechanisms for residents' self-renewal.

The place is also being explored. On June 2, Shanghai announced the first to establish the country's largest urban renewal fund, with a landing scale of 80 billion yuan, targeted investment in old district renovation and urban renewal. In addition, Beijing encourages market entities to invest funds to participate in urban renewal, encourages real estate property owners to raise funds for renewal and renovation, and encourages financial institutions to innovate financial products to support urban renewal. Chongqing encourages the active use of national policy finance and market finance to raise funds for urban renewal support policies, explore new credit financial products, explore the establishment of special funds for urban renewal, and rationally guide residents to invest in the renewal and transformation.

Fan Ruoying said that in the implementation of urban renewal actions, it is crucial to solve supporting problems such as funding. In addition to playing the role of the government, it is necessary to mobilize funds from multiple parties flexibly to participate. The first is to encourage commercial financial institutions to innovate financial products, and solve the problem of greater pressure on project funds through debt, equity, asset support plans, etc.; the second is to increase the enthusiasm of private capital to participate and break down hidden barriers in credit, bidding and other aspects; Give full play to the financing functions of multiple channels such as the capital market and infrastructure REITs.

Gao Ruidong pointed out that urban renewal mainly involves the old stock of properties in the city, as well as a large number of public welfare projects, and the operating rate of return is low. In order to realize the sustainability of the project, at the initial stage of construction, the operating income of the project should be fully considered and explored, and the project's operating income should be used to balance the transformation investment. He cited as an example, when Anhui was renovating 2,600 old communities, it explored incentives such as granting community franchise rights to attract social capital to actively participate.

It is worth noting that the industry also pointed out that with economic development, urban spatial layout and residents' lifestyles continue to change, urban renewal should be gradual and small-scale.

Urban renewal is an inevitable process of China's urban and rural development. During the development process, problems caused by large-scale transformation must also be avoided, the urban context should be maintained, and the historical and cultural heritage should be protected. "Yang Tao said. Gao Ruidong said that small-scale renewal methods can flexibly use funds in the transformation process, explore an effective combination of improving residents' living standards and realizing operating benefits, and realize the sustainable development of urban renewal projects. Editor/Xu Shengpeng