Nanyang, "the capital of unfinished buildings": The group buying houses of the Housing Management Center are unfinished, and the remediation and resetting have been delayed repeatedly
The "City of Unfinished Buildings" Nanyang's Decaps Problem
Our reporter/Yang Zhijie
Published in the 966th issue of China News Weekly on September 28, 2020
The beautiful city community is located in the southwest corner of the intersection of Zhangheng Road and Zhongjing Road in Nanyang City, Henan Province. There are 41 residential buildings. The community covers an area of 362 mu, which is equivalent to 33 World Cup football fields.
At present, apart from the early construction of No. 1, 2 and 3 and the owners have moved in, the remaining 30 buildings are either rough houses or only the main structure has been built.
As night fell, against the surrounding lights, the ruined buildings were connected to one another.
This year is the sixth year that the beautiful city has been unfinished.
To the north of the beautiful city, Meijiayuan, a more well-known unfinished building in the local area, also stands silently in the night. It belongs to the same developer as the beautiful city.
In 2013, in order to solve the housing problem of employees, Nanyang Housing Management Center used the "group purchase" method to purchase the Meijiayuan commercial housing developed by Jinyu Real Estate, involving 1132 cadres and employees.
As of November 2018, Nanyang Jinyu Real Estate Co., Ltd. has collected a total of about 261.97 million yuan for group purchases.
The project started in July 2013 and agreed to hand over the house before January 11, 2016, but so far only the main frame has been built.
"The group-buying houses of the Housing Management Center are all unfinished." When it comes to unfinished buildings, many Nanyang locals will laugh at themselves.
In recent years, Nanyang has been dubbed "the capital of unfinished buildings" by the outside world.
In 2014, Nanyang City Government counted that there were 302 problematic buildings in the central city.
Many local people and government officials explained to China News Weekly that unfinished buildings accounted for only a small part of the 302 problematic properties, less than one-third, and more often, when real estate projects are pre-sold or even completed. , Five certificates are not complete or even one certificate. Buyers have stayed in for many years and have not obtained the real estate certificate.
In 2014, Nanyang City initiated the rectification of real estate projects. The government has set deadlines many times, but the time for clearing problematic real estate has been repeatedly delayed.
June 30, 2019 was the time node originally scheduled to end the remediation, but the remediation time was extended to September 30 of that year and postponed to the end of the year.
This year, the Nanyang Municipal Party Committee and Government once again requested that before June 30, all remediation projects in the real estate sector should be cleared.
However, as of mid-September when the manuscript was issued, the zero-clearing target had not been completed as scheduled.
Zhang Yuxuan, deputy leader of the special inspection team for petitioning outstanding issues in the real estate sector in the central urban area of the Nanyang Municipal Party Committee, and deputy director of the Municipal Bureau of Natural Resources and Planning, told China News Weekly that as of now, 90% of the 302 problematic properties in Nanyang have been rectified, and there is still left. The next 28 projects are difficult to promote.
Nearly 70% of projects do not have "Construction Permit"
In June 2019, the fifth year that the beautiful city was unfinished, Zhang Heng (a pseudonym) and other home buyers decided to save themselves.
The buyers directly negotiated with the developer and put forward a plan: some people only paid a 40% down payment when buying a house, and everyone took out the rest of the house payment and found the construction party, connected with water, electricity and ventilation, and connected the sewage and drainage device to Building 4. Do a pilot to save yourself.
"This is a historical issue, and the government does not participate. The company is still in lawsuits and is deeply involved in equity disputes. We have run in with the company for several rounds and they agreed." Zhang Heng told China News Weekly, November 5, 2019 , The self-help project was completed.
Nowadays, No. 4 Building of the Beautiful City, on the north side of the street, is a large hole, which is blocked by weeds.
The developer posted a "Notice of Safety Matters" at the entrance of the elevator, saying, "Because the relevant facilities of the Meizhidu 4# Building project are not complete, and the conditions for accommodation are not yet complete... The owner can decorate first, but is firmly not allowed to stay." However, in the first half of this year, several owners couldn't wait and moved in after renovation.
For Zhang Heng, how upset he was to buy a house at the beginning.
In 2012, the beauty of the city’s publicity was overwhelming, "TV, big screens, billboards are all advertising, saying that swimming pools and sports venues will be built, everyone is bluffed."
Zhang Heng was moved.
Beauty is the first batch of urban village reconstruction projects approved by Nanyang Municipal Government, located at the intersection of the new and old towns.
He told China News Weekly that in October 2012, the night before the opening, hundreds of people lined up in the sales department, hoping to pick the type of apartment they liked first.
On the opening day, city and district leaders cut the ribbon on the spot.
Zhang Heng remembers that at that time, the developer promised that the "five certificates" would be supplemented in the follow-up and move in at the end of 2015.
The so-called "five certificates" means that the developer must obtain a "commercial housing sales (pre-sale) permit" before the real estate opens.
To obtain the pre-sale permit for commercial housing, the developer must obtain the "Land Use Right Certificate", "Construction Land Planning Permit", "Construction Project Planning Permit" and "Construction Project Construction Permit" in advance.
Not only in the beautiful city district, many real estates at that time had the situation of "getting on the bus before making up the ticket".
Zhang Heng paid a deposit of 10,000 yuan on the spot and selected a 130-square-meter apartment with two halls and two bathrooms.
Soon after, he paid 30% of the purchase price, totaling 200,000 yuan.
The developer's five certificates were incomplete, and the owner could not get a mortgage loan from the bank. One year later, Zhang Heng bought the house with full money and made up the remaining 300,000 yuan.
Although the developers pre-sold in violation of regulations, there are government platforms, and thousands of people, including Zhang Heng, are unsuspecting. "We don't understand. If we do, we won't be deceived."
On June 25, 2014, CCTV's "Focus Interview" program exposed the use of slimming steel bars in a building named Sanjie Shengshicheng in Nanyang. The report also revealed that slimming steel bars have long been widely used in various properties in Nanyang City.
That night, the Nanyang Municipal Government issued a notice requesting a comprehensive inspection and rectification of the city's construction project quality, and all projects under construction in Nanyang City were suspended.
Chinanews.com once reported, "After half a city in Nanyang, no construction building was found. Hundreds of tower cranes stayed quietly in the air, like a stalled clock."
The construction of the beautiful city has since stagnated.
In the past five years or so, Zhang Heng and many owners have repeatedly searched for the street office and went to the district, city, and provincial petition bureaus. They usually waited for a long time. An official came out to understand and resolve the situation and persuade them to return.
After the “Slimming Steel Rebar Incident” in 2014, the Nanyang Municipal Government issued the “302” policy, which counted a total of 302 problematic real estates in the area, established a 302 real estate renovation project ledger, established tolerance management, closed capital operation, and accelerated processing of green channels And other mechanisms.
Zhang Yuxuan provided China News Weekly with a summary report on the special rectification of the central urban real estate market (June 30, 2020) by the Nanyang Real Estate Comprehensive Rectification Office, which mentioned that Nanyang’s real estate industry illegally occupied land at that time , Illegal construction, illegal sales and other chaos intensified.
The above document pointed out that in 2014, among the 227 real estate development projects under construction in the downtown area, 57% of the projects did not obtain the "Land Use Right Certificate", 60% of the projects did not obtain the "Construction Project Planning Permit", and nearly 70% The projects do not have a "Construction Permit for Construction Engineering", and more than half of the projects have not obtained the "Commercial Housing Pre-sale Permit" before they start selling.
However, a local person who has been following real estate for a long time told China News Weekly that he noticed that on February 12, 2019, the Nanyang Municipal Committee Standing Committee, the Political and Legal Committee, Secretary Zhang Mingti once said, "From the current 245 cases assigned by the Provincial and Municipal Joint Office and the 151 cases assigned by the Municipal Real Estate Remediation Office, most of the cases were handed over during the renovation last year, indicating that the progress is not enough."
245 plus 151, the total is 396, more than 302.
According to his understanding, some communities in Nanyang City that have not issued property certificates have not been included in the list of government rectification. The actual number of problematic buildings is far greater than 302, or even greater than 396.
"Policy green light" plunges companies into a quagmire
Yu Hang, secretary general of the Nanyang Real Estate Chamber of Commerce, has been in business for more than 20 years and has witnessed the development of the Nanyang property market.
He told China News Weekly that after 2008, with the city-building movement brought about by the "village-in-city" transformation, the local real estate industry has only ushered in its peak.
Nanyang is located in the southwest of Henan Province. It is the most populous and largest city in the province, but its economic development is not prominent in the province.
According to the "Henan Statistical Yearbook 2008", among the 18 cities, Nanyang ranked 13th in GDP in 2007 and 4th from the bottom in GDP per capita.
However, since 2007, the transformation of Nanyang City Village has been vigorous.
Zhang Yuxuan mentioned that at that time the city government approved more than 80 urban village projects, and later more than 20 projects were actually started.
Yu Hang introduced to China News Weekly that the government intended to be a shareholder at that time, but it lacked sufficient financial resources to demolish and relocate, the financing methods did not match, and no financing platform was established.
At that time, the common practice of the "Village in the City" project was that the government handed over the demolition to the developer, and the developer could apply to the government for approval after negotiating with which district.
Yu Hang estimates that among the 302 problematic projects, "village in the city" projects account for 1/3.
According to the national policy, the "village in the city" reconstruction project should be funded by the government to compensate for the demolition of the buildings on the ground and realize the net land transfer.
However, the above summary report materials provided by Zhang Yuxuan mentioned: “Due to the financial difficulties of our city, it is unable to bear the relevant collection and demolition expenses. Therefore, the village-in-city reconstruction projects at that time were all funded and demolished by the development company, which occupied a large amount of corporate funds and caused corporate funds. Difficulty in operation and inability to go through relevant procedures, resulting in slow progress in the project and a large number of social conflicts."
Zhang Yuxuan said that at that time, the developers were responsible for their own profits and losses. After the demolition was completed, the government would allocate part of the commercial houses to the developers to make up for the demolition expenses, and this part of the commercial houses generally had no land procedures at that time.
In this mode, Nanyang set off a fanatical city-building movement.
According to the "2008 Nanyang City Government Work Report" statistics, in 2007, the city's general fiscal budget revenue was 4.48 billion yuan, and urban fixed asset investment was 55.5 billion yuan.
Yu Hang remembers that around 2008, the government was very supportive of development companies participating in the transformation of old cities and villages in the city. The director of planning usually led the way, drove to the same place with the development companies, and handed over hundreds of acres of land to the development company. enterprise.
"At that time, the company only needed to sign an agreement with the village, and it could handle land use planning on the same day, and get a certificate for demolition and relocation, and note which project it was used for, which was very efficient."
Obtaining the right to host the National Peasant Games has pushed the Nanyang real estate boom to a peak.
In 2008, the former Ministry of Agriculture, the State Sports General Administration and the Chinese Farmers Sports Association formally jointly issued a document agreeing that the 7th National Peasant Games will be held in Nanyang in 2012.
Nanyang regards the Peasant Games as a major opportunity and hopes to take this opportunity to achieve leapfrog development.
According to local media reports, Nanyang built a lot of infrastructure at that time, built 7 large stadiums, 3 new large-scale competition venues, 7 four-star hotels and upgraded 6 stadiums and 36 hotels.
Many Nanyang people introduced that the construction of the Peasant Games has doubled the urban framework of Nanyang City.
The 2012 Nanyang City Government Work Report mentioned that the total investment in new urban construction projects in 2011 exceeded 5 billion yuan, which is equivalent to the total investment in the past 10 years.
The demolition and resettlement procedures of the Peasant Games are similar to those of the "Village in the City" reconstruction.
"The amount of demolition for the Peasant Games is relatively large, and the preparation time is tight. In order to build resettlement houses as soon as possible, the government allows developers to demolish and build without any formalities. This led to the construction of resettlement houses without any formalities." Zhang Yuxuan Say.
Many companies are rushing away in the "policy green light."
Zhongda Real Estate is a large-scale local real estate company in Nanyang. The relevant person in charge of the company, Sun Bing (pseudonym), told China News Weekly that in the context of "all for the peasant sports meeting", the government's special affairs and special affairs, according to the center The urban "village-in-city" transformation method uses social capital to operate.
In April 2012, the Demonstration Zone Management Committee and Baihe Sub-district Office signed a construction project agreement with Zhongda, allowing Zhongda to be responsible for the demolition of houses in the Shuangpu section, road widening and upgrading, and the construction of streetscape houses.
Zhongda bears all the costs of expropriation, compensation and resettlement construction, on the condition that “the demonstration area is responsible for allocating another 1,000 mu of net land around Shuangpu Village for resettlement and development by Zhongda Company. After the project named Tianhui Homeland starts, the The method of dismantling, building, selling, and perfecting procedures is moving forward."
Sun Bing introduced that the project was launched shortly. On March 8, 2013, the inspector of the Ministry of Housing and Urban-Rural Development requested that the Shuangpu project be completely shut down because the "Nanyang New District Development Master Plan (2010–2030)" prepared by the demonstration zone has not yet received national level approval. Approved.
The Nanyang Municipal Government publicly disclosed that as of the end of 2019, Zhongda Real Estate had started to pre-sell the Tianhui Homes project in April 2012. A total of 3,400 commercial housing units were pre-sold, but the planning and construction approval procedures were not complete. The project has been constructed and resettled 1593 units. , The remaining 1,807 sets have not yet started construction.
Among the 1,807 units, 385 households have refunded the purchase price, 510 households have applied for check-out payment, and 912 households requested to start construction as soon as possible.
In the past 7 years, buyers of Tianhui Homes have repeatedly petitioned.
"We are now in a deep quagmire." Sun Bing told China News Weekly that in the context of the Peasant Games, the reconstruction of urban villages, and the construction of new communities, 7 projects of Zhongda Real Estate were included in the 302 real estate renovation project platform. Accounts, including the aforementioned Zhongda Tianhui Homes.
From the developer's point of view, in a sense, the company's project was a victim of Nanyang government policy at that time.
"Everyone did that at the time."
Liu She, director of the Urban Development Research Center of Henan University of Economics and Law, told China News Weekly that this phenomenon was more common more than ten years ago. The government defrauded developers to obtain land and build projects for political achievement projects. Many of them verbally agreed without covering them. Zhang did not sign.
After 2013, the policy was tightened, the past practices did not work, and the project became illegal and illegal land use.
"In addition, the policy changes every three to five years. It turned out that this piece of land could be used to build a house. Later, according to the needs of urban development, it may be planned to be changed to public land. In addition, there was no contract and the developer invested money, but there was no certificate. It cannot be sold, and 100% becomes unfinished." Liu She said.
Yu Hang believes that, strictly speaking, real estate is a "planned economy", and land, capital, planning plans, prices, etc. are all subject to government control.
"If there is a problem in this market, the government has no shirk, or the government's governance, control, and supervision capabilities do not match the real estate market."
With the green light of policy and low threshold, the real estate market seems to be full of business opportunities.
Yu Hang pointed out that development companies only see how much money they can make after the demolition, but do not calculate how much they will lose if the demolition cannot continue. This tests the developer's management ability, capital reserve ability, market risk assessment ability, and overall operation ability.
According to Zhang Yuxuan, according to statistics, there are now more than 500 real estate companies in Nanyang, and less than 10% of them have first-level development qualifications.
More developers are small in scale and irregular in operation.
This is also one of the reasons for the chaos in real estate.
"For example, private financing was not standardized. At that time, there were guarantee companies everywhere in Nanyang. Some companies did not have strong funds themselves, but they did a lot of projects relying on financing."
Difficulties in the supplementary payment of "land transfer fees"
In the past two years, under the unified requirements of the province, the Nanyang City Center City rectification and standardization improvement of the real estate market has been established successively, the Nanyang City Real Estate Sector Special Leading Group for the Resolution of Real Estate Problems, and the Nanyang City Leading Group Office for Dealing with Illegal Fund Raising. A temporary department.
Zhang Yuxuan told China News Weekly that as of the end of June 2020, 274 special rectification projects for real estate market order had been dealt with and resolved, with a resolution rate of 90.7%, achieving the goal of “big head landing” set by the municipal party committee and government.
The problematic properties are not all unfinished.
Zhang Tao, deputy director of the Nanyang Housing Management Service Center, once concluded that Nanyang’s problematic real estate mainly includes incomplete construction procedures, broken capital chains, law-related litigation, and ownership disputes.
Zhang Tao once stated that the government’s methods for solving problematic real estate projects are divided into four categories: first, for projects with incomplete construction procedures, speed up the improvement of related procedures, and start project construction as soon as possible; second, for projects with broken capital chains, actively coordinate financial institutions and increase Large-scale financing assistance; third is to urge the judicial department to dispose of projects involving law and litigation as soon as possible in accordance with the law; fourth is to promote project construction through bankruptcy liquidation and seeking partners for projects that the original corporate legal person cannot promote.
The fourth category is the most difficult. Ownership disputes are complicated and make it difficult for third-party capital to take over.
After 6 years, why has the rectification period been repeatedly extended?
Zhang Yuxuan explained that the 172 projects solved in the early stage were relatively simple problems. “For example, the project already has some procedures, but the pre-sale certificate needs to be completed after the construction of the fourth floor. Most of them involve the outstanding land transfer fees. The project started construction without approval, and the land transfer fees, urban supporting fees, and civil defense fees were not paid."
However, the remaining projects involve more complex issues and greater difficulty in handling.
Most of the problematic buildings were constructed six or seven years ago. The earliest project, Biyuan Garden, started in 2001 and was unfinished in 2003.
The time span is large, and real estate policies, local policies and land planning are long gone.
Yu Hang pointed out that how the land price should be determined when the land is re-bided for auction and listing is a major problem in the management of a large number of real estate before 2018.
According to statistics in 2014, 129 projects under construction did not obtain the Land Use Right Certificate, accounting for more than 50%.
Now that the procedures are completed, the land must first be auctioned and listed.
However, if the transfer fee is paid according to the current benchmark land price, the land price alone will be almost the same as the selling price of commercial housing at that time.
In recent years, major developers such as Greenland, China Construction, CITIC, Evergrande, and Country Garden have entered Nanyang's real estate market, driving up Nanyang's land prices and housing prices.
In July 2020, Nanyang’s new “Land King” came into being, with a unit price of 11.86 million yuan per mu and a floor price of 5084 yuan per square meter.
The comprehensive premium rate is as high as 223.6%.
"The transfer fee is increasing year by year, which is not the same as it was more than ten years ago. In the past, an acre of land transfer fee of hundreds of thousands of yuan can now be sold for tens of millions of yuan." Zhang Yuxuan mentioned that this makes enterprises unwilling or lack of financial strength Cooperate with relevant construction procedures.
Government departments dare not easily lower the threshold.
Zhang Yuxuan pointed out that if the policy is not implemented, I am afraid that someone will be held accountable after a few years. Why is the land price paid by the company in 2018 as the land price in 2011?
Government departments are also worried about taking responsibility.
In February 2019, the Nanyang Municipal Party Committee and Municipal Government held a meeting to resolve outstanding problems in the real estate sector in the city’s real estate sector, and introduced a new policy, “For projects that have started construction before August 2014, the benchmark land price at the time of construction Assessment and payment of land transfer fees, and no period correction (in principle, not lower than the transfer price of the same level of surrounding land in the same period)".
Zhang Yuxuan introduced that the introduction of this policy is not easy. The leaders of the Public Security Bureau and the Secretary of the Discipline Inspection Commission attended the meeting.
This policy has increased the speed of remediation. Since December 2019, the government has solved 60 or 70 projects.
The remaining "hard bones"
Another difficulty in remediation lies in the changes in urban planning.
During the construction of some real estates, the procedures were incomplete and they were not included in the preliminary planning, and subsequent new plans were issued, which caused conflicts between the two.
According to Sun Bing, the person in charge of Zhongda Real Estate, at first, the Tianhui Home Project conflicted with the original urban planning, and the new plan for the demonstration area had not been approved, so it was stopped.
In addition, affected by relevant national policy adjustments, regional planning adjustments, and land index constraints, the section roads moved north due to planning adjustments, and the planned construction of overpasses nearby has led to a shrinkage of the construction area.
A piece of information provided by Sun Bing shows that more than 1,600 pre-sold houses have no land to build, and buyers have petitioned all the year round.
In 2019, Zhongda planned and renovated the completed area, sorted out more than 30 acres of land, built more than 600 resettlement houses, and refunded nearly 400 sets. Currently, there are more than 600 sold houses with nowhere to build.
Of the 302 official statistics, 28 projects remain unresolved, many of which involve planning conflicts.
Zhang Yuxuan explained that this includes three situations: The first is an illegal project. For example, a certain project is located in the clear air of an airport and has an illegal high-rise building, which cannot be demolished and cannot be solved temporarily.
Second, the original project now occupies the red line or green space of the road.
"Projects that occupy less than one meter of pressure, we have done for it, but more than half of the roads are occupied, and it will definitely not be built. It is impossible to demolish, and some houses have been sold several years ago." Third, If the enterprise closes down, or the boss is detained after the company's capital flow is broken, or the boss dies, the procedures for this type of project are also difficult to complete.
The problematic real estate projects are followed step by step, and many have not yet reached the end.
But for buyers, this is far from enough.
The more urgent need of the citizens is when will the unfinished buildings start?
When can I get the real estate certificate?
On the streets of Nanyang, you can still see many unfinished buildings without construction progress.
On the morning of September 14, many owners once again spontaneously came to the door of the municipal government, calling on the government to come forward to solve the problem of unfinished buildings.
On the "Leadership Message Board" of People's Daily Online, the owner of Nanyang Wanjiayuan Osmanthus City wrote that after 10 years of handover in the community, the cost of the permit has been paid, and the developer has shied away from signing online and not applying for permits for various reasons.
This is related to the thousands of school-age children of the owners who are rejected by the school and have to pay more than 5,000 yuan or even higher tuition fees to enroll. The real estate cannot be inherited, transferred, or sold.
Yu Hang believes that Xuchang's experience can be learned from the management of problematic real estate.
Xuchang’s approach is that “property registration adopts the principle of separation of certificates, and gives priority to solving the problem of obtaining certificates for the buyers of houses.” He believes that by first getting the real estate certificates of the common people, the dissatisfaction and worries of the people can be calmed, and the common people can live there. Sort out corporate issues.
But this requires the responsibility of the government.
“The government is worried that developers owe too much tax. If they cannot be recovered, there may be a risk of loss of state-owned assets. In addition, because ordinary people petition, the government makes companies legal at no cost or low cost, which is unfair to some compliant companies. Third. If illegal real estate obtains legal rights, the government’s compensation cost will increase during the second demolition and there will be contradictions in the later stage.” Yu Hang analyzed that the emergence, occurrence, and management of problematic real estate in Nanyang is a process of urbanization. The price is, "The real estate industry hasn't gone through the whole cycle, it's like watching an opera, we haven't seen the entire excerpt."
The beautiful city purchased by Zhang Heng ushered in a short rebirth opportunity in 2017.
In 2017, the developer Jinyu Real Estate completed 5 licenses, and the project continued to start.
But soon, the project was once again paralyzed by the developer due to a loan dispute.
At present, the project has entered bankruptcy and reorganization procedures in accordance with the law. This is the first unfinished project in Nanyang to test the waters of bankruptcy and reorganization.
After waiting for 8 years, Zhang Heng was exhausted by the unfinished building.
After the Spring Festival this year, he hung up the house in an agency and wanted to sell it.
Many people in Nanyang have suffered from the loss of unfinished buildings. Nowadays, the price of some new houses in Nanyang has exceeded 10,000 yuan per square meter, but the price of unfinished buildings can only sell for five to six thousand yuan per square meter.
Speaking of the house, Zhang Heng was full of regret, "This house is 900,000 yuan, and it can't be sold for half a year."
China News Weekly, Issue 35, 2020
Statement: The publication of "China News Weekly" manuscript is authorized in writing