Academic journal article China Perspectives

Ambiguous Rights: Land Reform and the Problem of Minor Property Rights Housing

Academic journal article China Perspectives

Ambiguous Rights: Land Reform and the Problem of Minor Property Rights Housing

Article excerpt

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On 25 May 2012, Shenzhen announced the Comprehensive Plan to reform the Special Economic Zone's land administration system (Shenzhen shi tudi guanli zhidu gaige zongti fang'an ...) in a move that has been referred to as the city's "third land reform" (disanci tugai ...). The Comprehensive Plan was formally published on 4 July along with two related documents, namely a Near-Term Implementation Plan covering the period 2012 to 2015 ("Shen- zhen shi tudi guanli zhidu gaige zongti fang'an" jinqi shishi fang'an ?......) and a Notice on the setting up of a guiding committee to steer and supervise the undertaking of land reform (Guanyu chengli Shenzhen shi tudi guanli zhidu gaige lingdao xiaozu de tongzhi ...).

In 1987, the nation's first land auction took place in Shenzhen marking the "first land reform" in post-socialist China. Subsequently, the Special Eco- nomic Zone has taken the lead in experimenting with new land-related poli- cies. The spotlight of the municipal government's latest announcement falls on the prevalent problem of minor property rights housing (xiao chanquan fang ...). Minor property rights housing is an unofficial term referring to illegal residential structures built on rural, collectively-owned land that is sold or rented to non-local urbanites. Its controversial legal status stems from the dual ownership structure in China's land regime. According to Ar- ticle 8 of the Land Administration Law, the state claims ownership of urban land, while land in rural and suburban areas is owned, unless otherwise stip- ulated, collectively by rural residents represented by peasant collectives. Rural collective land is theoretically reserved for the exclusive use of vil- lagers, and should be not sold, transferred, or leased to non-rural residents. The real estate boom and successive hikes in property prices have never- theless provided strong incentives for rural landowners to capture the mon- etary benefits of urban development through selling and leasing land and houses to urbanites looking for affordable accommodation.

Beginning in the mid-1990s, minor property rights housing began to emerge in the fringes of major cities, and it proliferated in the early 2000s as housing prices experienced dramatic increases nationwide. By 2007, 18 percent of the 400 residential developments on sale in Beijing were minor property rights projects.(1)In Shenzhen, minor property rights housing ac- counts for 56 percent of all housing units and accommodates about half of the city's population.(2)As of the end of 2011, Shenzhen had an estimated 379,400 minor property rights houses covering approximately half of the city's total construction area. (3)

On the supply side, minor property rights housing is usually jointly devel- oped by villagers' committees, local governments at the township level, and land developers. Because minor property rights are not recognised by the central state and are hence not a legal right protected by law, buyers do not receive the officially recognised property ownership certificate (fangchan zheng ...) upon transaction. Instead, township governments and villager committees produce their own papers such as "township prop- erty ownership certificates" (xiang chanquan zheng ...), "village prop- erty ownership certificates" (cun chanquan zheng ...), and "villagers' jointly-built housing documents" (cunmin lianhe jianfang xieyi ...) as substitutes for formal documentation, in contravention of the Constitution and land laws. (4)

On the demand side, minor property rights housing provides a much-wel- comed low-cost alternative, in particular for the middle and lower income group. A study by Paik and Lee finds that most minor property rights housing is 50 to 80 percent cheaper than commercial apartments, even in proximate locations.(5)For the middle-income group, minor property rights apartments offer larger living space at less cost. Figures from Beijing in 2007 show that a home buyer could afford a 40-square-meter house inside the Fifth Ring Road for about 300,000 yuan, but for the same amount of money he or she could get a 100-square-meter apartment with no official property rights at the same location. …

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