Local deputy calls for national urban renewal law

A deputy to the National People’s Congress from Shanghai is calling for a national law on urban renewal projects.

The deputy, Gao Yun, is Party secretary of Huangpu District, a district in Shanghai with a rich architectural history and the largest number of renewal projects.

Shanghai was one of the first cities in China to introduce local rules on urban renewal in 2015, but a national law is necessary to define certain procedures and create stable expectations for incentives among parties involved, Gao said.

Current national standards on planning, construction, fire safety, greenery, energy efficiency, traffic, seismic safety and civil protection are compulsory but not applicable to many renewal projects. While these projects require the full consensus of owners, residents or tenants in targeted buildings, which has become a problem in carrying out renewal, according to Gao.

“Elongated planning and preparations, as well as the many uncertainties in the renewal process, have greatly reduced the number of potential projects. Due to that some buildings have become more and more dilapidated, making it even more difficult and costly to eventually do maintenance and restoration,” he said.

Meanwhile, projects with low or zero profitability, especially those which could improve living conditions for residents, are usually a hard sell to commercial businesses, which makes it unsustainable for the government to finance them alone, Gao said.

The Huangpu District government, for example, invested about 224 million yuan (US$31 million) in the first stage of transforming Chengxingli, a historic shikumen (stone-gate) neighborhood in downtown Shanghai, with 885,000 yuan invested in one household.

Incentives for businesses to take part in urban renewal projects exist, but they’re made less attractive by other uncertainties in these projects, Gao said.

“In many cases, potential developers are granted larger capacity rates in the eventual renewed buildings, but some old complexes have already reached their maximum capacity according to current compulsory standards, which makes these incentives meaningless,” he said.

Gao suggests that a national law on urban renewal draw on best practices from similar laws in other countries to stipulate incentives for developers such as rewards of capacity rate, tax cuts and subsidies.