Two Departments: Newly Added Construction Land Shall Not Be Used for Commercial Real Estate Development in Principle; Annual Increase in Urban and Rural Construction Land Shall Not Exceed the Area of Revitalized Stock Land

Securities Times Reporter Zhang Da

On March 16, the Ministry of Natural Resources held a press conference to interpret the “Notice on Further Improving Natural Resource Element Guarantee” (hereinafter referred to as the “Notice”), jointly issued with the National Forestry and Grassland Administration. The “Notice” clarifies that it will coordinate the stock and incremental construction land to promote connotative development.

The “Notice” requires, firstly, to establish and improve a mechanism linking the activation of stock construction land with new construction land, with the principle that the annual new urban and rural construction land should not exceed the area of activated stock land; secondly, to prioritize the guarantee of major project construction and public livelihood development for new construction land, which should not generally be used for commercial real estate development.

Kong Weidong, Director of the Department of Natural Resources Development and Utilization at the Ministry of Natural Resources, stated that urban construction land includes both newly formed land through expropriation and reallocation, as well as stock land revitalized through old city renovation, inefficient land redevelopment, and reclaiming or acquiring idle land. Both constitute sources of land for economic and social development. Coordinating stock and incremental land supply requires careful planning to make good use of every inch of land. Except for projects related to energy, transportation, water conservancy, and other standalone site selection projects, the annual new construction land should not exceed the area of activated stock land; only by activating one acre of stock land can one acre be added. Through good coordination of stock and incremental land, this approach prevents disorderly urban expansion and sprawling development, and promotes the transformation of urban development from reliance on new land to revitalization of existing space.

Kong Weidong pointed out that China’s fundamental national condition is that there are many people and limited land, and the shortage of land resources is difficult to change in the short term. The allocation of land elements must be carefully balanced across three accounts: market benefits, national development, and people’s livelihood and well-being. Good steel should be used on the cutting edge; limited new land should be prioritized for major infrastructure projects and public livelihood development. On one hand, the supply of land for key projects such as energy, transportation, and water conservancy should be increased, and on the other hand, the construction of modern industrial systems with new productive forces should be supported with reasonable land use. Additionally, projects closely related to people’s lives, such as urban village renovation, should receive increased support for new construction land.

Kong Weidong emphasized that land supply is an important factor for the stable and healthy development of the real estate market. Based on the new situation where major changes have occurred in the supply and demand relationship of the real estate market, new construction land should generally not be used for commercial real estate development. This does not mean no land will be supplied for real estate; rather, it emphasizes the efficient and prioritized use of stock resources, with tailored policies according to city conditions to control the pace and timing of land supply. Priority should be given to areas with advantageous location and complete supporting facilities, to promote enterprises to “secure good land and build good houses,” continuously improve urban functions, and enhance residents’ quality of life.

The China Index Academy believes that the new land management regulations directly affect the supply and demand relationship in the real estate market and will have a positive impact on stabilizing the market. It is expected that local governments will accelerate the storage and acquisition of idle stock land, and through reasonable adjustments in land planning and land exchanges, better solutions will be adopted to meet market land needs. After the implementation of this policy, regions are likely to increase urban renewal efforts, focusing more on the renovation of high-value land. Meanwhile, the principle that new construction land should not be used for commercial real estate development will reduce land supply at the source, and the pace of activating stock land will accelerate, which is conducive to destocking and further improving the supply-demand relationship in the real estate market, helping to stabilize it.

(Edited by: Wen Jing)

Keywords: Land