(Economic Observation) Will the introduction of the "strictest in history" long-term rental policy overturn the industry structure?

　　China News Agency, Beijing, February 2 (Reporter Pang Wuji) After a series of "thunderstorms", the long-term rental apartment industry ushered in "the strictest supervision". This time it was Beijing.

　　On the 2nd, the Beijing Municipal Commission of Housing and Urban-Rural Development and other five departments issued the "Notice on Regulating the Operational Activities of Housing Rental Enterprises in this City."

Provisions are made for issues such as "fund pool", "long-term receipts and short-term payments", and "rent loans" that are of concern to the market.

　　Beijing’s new policy pointed out that, in principle, the amount of rent received in advance by housing leasing companies from lessees should not exceed three months’ rent, and the cycle of collecting and paying rent should match.

The deposit collected by the leasing company shall be managed through a special account established by the Beijing Real Estate Intermediary Industry Association, and the amount of the deposit collected shall not exceed one month's rent.

In addition, the “rental loan” funds that the lessee applies to the financial institution cannot be allocated to housing leasing companies.

　　Zhang Dawei, chief analyst of Centaline Property, pointed out that the absence of a pool of funds and no mismatch of lease terms will greatly reduce the possibility of "explosion" in long-term rental apartments. If the policy is strictly implemented, the long-term rental apartment industry may undergo disruptive changes.

　　In recent years, China's long-term rental apartment industry has experienced a "roller coaster" development.

Since 2014, the two-wheel drive of policy and capital has quickly pushed this industry to the forefront.

For a time, long-term rental apartment companies have sprung up like bamboo shoots after a rain, taking turns financing and getting listed together, but at the same time, for this still young industry, the "growth troubles" have always followed.

　　Since 2019, multiple long-term rental apartment brands have successively reported that the capital chain has broken and the company has run away.

Especially at the end of last year, Eggshell Apartments, the leading enterprise in long-term rental apartments, was in deep financial crisis, causing tens of thousands of landlords, tenants and even financial institutions to suffer considerable losses.

　　Industry experts believe that the rapid expansion of being "kidnapped" by capital, the flaws in the profit model, and the inability of government supervision to keep up are the main reasons for the troublesome long-term apartment rentals.

Zhang Dawei said that in cities such as Beijing and Shanghai, the market share of long-term rental apartment companies has exceeded 20%. In this context, the rental market, especially the long-term rental apartment market, urgently needs to strengthen supervision.

　　Experts believe that Beijing's long-term rental apartment policy is expected to build a "firewall" for the industry.

Wang Xiaoqian, an analyst at Zhuge Housing Data Research Center, said that in the past, long-term rental apartment agencies used "rent loans" to pre-collect tenants’ rent for one year, and then used pre-collected rents for expansion and renovation. This notice clearly prohibits this practice. .

　　Zhang Dawei pointed out that Beijing stipulates that long-term rental apartment companies that play the role of "second landlords" should not charge more than 3 months in advance, which means that leasing companies have basically lost the possibility of misappropriating the fund pool.

　　Huang Hui, a senior analyst at the Shell Research Institute, also said that after the implementation of Beijing’s policy, companies that have violated scale expansion through “high income and low output”, “long income and short payment” and “rent loans” will gradually be eliminated. Effectively reduce corporate capital chain risks and protect the rights and interests of tenants, especially small and medium-sized enterprises with higher operating risks, will gradually be eliminated, and the industry operating environment will be optimized.

　　In addition, the policy clarifies that the deposits collected by housing leasing companies from tenants need to be managed by the Beijing Real Estate Intermediary Industry Association to establish a special account for custody, and notify them to be returned after the contract is terminated.

Huang Hui said that when the leasing agency has operating risks, the deposit supervision system can effectively protect the security of tenants' funds and prevent tenants from suffering losses.

　　In actual leasing activities, when the rights and interests of tenants are damaged, litigation is often time-consuming and laborious, and the time period is long. If problems can only be solved by litigation, the rights and interests of tenants are often insufficiently protected.

Huang Hui believes that Beijing's proposal to establish a dispute mediation mechanism can improve the efficiency of bilateral leasing dispute resolution on the one hand, and on the other hand, it can handle dispute mediation methods more flexibly, which will help ease the bilateral relationship between tenants.

　　In addition to Beijing, at the end of last year, Shenzhen, Xi'an, Chongqing and other places successively introduced relevant policies to regulate the long-term rental apartment industry, and the supervision of "long-term pre-collected rents" for enterprises is being strengthened.

The analysis believes that afterwards, other first- and second-tier cities may also follow up related policies.

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