Peking University, Nov. 8, 2014: “But for us, the city planners, we need to ask ourselves two big questions. Is our planning for growth or for social justice? This is the first one. And the second one is – does the current system of planning laws match the rapidly growing need for the protection of property rights?” Dr. Liu Zhi, director of the PKU-Lincoln Institute Center for Urban Development and Land Policy, ended his speech at Beijing Forum 2014 with two thought-provoking questions. The speech was titled “China’s National Urban Planning Law and Its Role in Urban Planning Practices”.

In his speech, Dr. Liu particularly focused on small-property-rights housing, a special phenomenon emerging against the background of fast urbanization in China. This issue is closely related to social justice and economic development. To some extent, it also represents the contradiction and collision between land use and urban planning during the expansion of the metropolitan areas.

Dr. Liu Zhi was delivering his speech

Dr. Liu attributed the flourishing small-property-rights housing to the binary system of land ownership in China, which includes the state ownership in urban areas and the collective ownership in rural areas. Rural land is allocated to individual households, or to be more specific, farmers, but what the farmers hold is only the land-use rights. The village collectives still retain the corporate ownership of the land.

Apparently, with the fast expansion of urban areas, land has become a more and more scarce resource in China. The government imposes tight restrictions on the conversion of farmland for urban use. Only the state possesses the power to convert the farmland into urban land on which legally tradable houses can be built. It is actually illegal for the villages to build commercial residential buildings on their land, and sell the housing units with the property titles issued by the village committee. The government would not issue official property ownership certificates to buyers of these houses. Thus, these houses are termed “small-property-rights housing”, or “incomplete-property-rights housing”.

Dr. Liu emphasized that the unfair treatment of the farmers is the key reason for the popularity of small-property-rights housing despite its illegitimacy. When the state takes the farmland away for urban development, the farmers, who have largely depended on their land, lose their main livelihood. Although the government does provide as compensation 30 years of annual agricultural output of the land based on its three years’ average productivity, the compensation is still far from enough. After witnessing the profits of real estate developers who makes use of their former lands, some villages start to construct houses on the rest of their land, desperate to share some of the profits.

The redevelopment of urban villages was another issue that Dr. Liu highlighted. In some southern cities, the municipal government will find a real estate developer to redevelop the urban villages into high-density and high-quality neighborhoods with high-rise residential and commercial buildings as well as public facilities and infrastructure. However, the scheme is negotiated, and the benefits of redevelopment shared, between the developer and the original residents of the urban village who have leased their own houses to a large number of renters, mostly the migrant workers. According to the scheme, the villagers will get compensation of roughly one square meter of new residential space for one lost square of old housing. The villagers will discontinue the rental contracts with the renters according to the rental contract clauses. Then the developer will come in to demolish the entire village and build a new high-density, high-value neighborhood.

Dr. Liu said that theses renters are mostly migrant workers from rural areas, seeking job opportunities and better education for their children in the cities. They are not compensated by the urban village redevelopment process. Once leaving their previous rented houses, many of them will have to find new jobs, new schools for their children and new urban villages to live in. It is easy to imagine how the rents would soar in the remaining urban villages since a large number of new renters are flooding in.

Dr. Liu ascribed the unjust treatment of the farmers and migrant workers to municipal government’s failure to perform their public duties. While governments give top priority to increasing municipal revenues and expanding the city, the issue of social justice receives far less attention. The heavy social costs imposed on a large number of urban village renters in the urban village redevelopment process should definitely be a public policy consideration for the government and city planners.

Dr. Liu said that city planners could have played a more effective role. He has traveled to many developing countries and is sure that China is the best in terms of the planning capacity and human resources. Unfortunately, although they do take rural areas and migrant workers into their consideration in urban planning, city planners are not the final policy makers. They are only advisers. Thus, the transformation of governmental functions in public policy is extremely urgent because of the current planning law system’s failure to promote social justice.

Background information:

The general theme of Beijing Forum is “The Harmony of Civilizations and Prosperity for All”. This year’s theme is “China and the World: Tradition, Reality and Future”. Beijing Forum was initiated in 2004 and has been held annually ever since. It is an international forum co-organized by Peking University, Beijing Municipal Commission of Education, and Korea Foundation for Advanced Studies. Beijing Forum endeavors to promote academic development and social progress across the world in order to contribute to the development and prosperity of humankind. This year’s forum contains nine panels and two special sessions. The speech of Dr. Liu is on Penal VII: Toward a Harmonious Development and Mutual Prosperity in Metropolitan Areas.

Dr. Liu Zhi received his Bachelor’s Degree from Sun Yat-sen University, Master’s Degree from Nanking University and Ph.D. from Harvard University. He is currently the director of the Center for Urban Development and Land Policy, PKU-Lincoln Institute. He entered the World Bank in 1995 and worked for the Bureau of East Asia Pacific as the chief expert on infrastructure from 2004 to 2009. Dr. Liu focuses his research on transportation, poverty, infrastructure and government finance.
 
Reported by: Yan Shengnan
Edited by: Chen Jiayu