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 use of existing and new construction land to promote intrinsic development.

The “Notice” requires, first, to establish and improve a mechanism linking the activation of stock land with the planning of new construction land, with the annual increase in urban and rural construction land generally not exceeding the area of stock land activated; second, to prioritize major projects and public welfare development when allocating new construction land, which generally should not be used for commercial real estate development.

Kong Weidong, Director of the Department of Natural Resources Development and Utilization, stated that urban construction land includes both newly formed land through expropriation and reallocation, as well as stock land revitalized through old city renovation, redevelopment of inefficient land, and reclaiming or acquiring idle land. Both sources constitute the land supply 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 specialized site selection, the annual new construction land in each region should not exceed the area of stock land revitalized. Only when a unit of stock land is activated can a unit of new land be added. Through good coordination of stock and incremental land, we can prevent disorderly urban expansion and sprawling development, and promote a shift from relying on new land to revitalizing existing space.

Kong Weidong pointed out that China’s fundamental national condition is having many people and limited land. The short-term situation of land resource scarcity is unlikely to change. The allocation of land elements must be carefully balanced, considering not only market efficiency but also national development and people’s well-being. Limited new land should be prioritized for major infrastructure projects and public welfare development. On one hand, the supply of land for key projects such as energy, transportation, and water conservancy should be increased, and modern industrial systems with new productive forces should be supported with reasonable land use. On the other hand, 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 a key factor for the stable and healthy development of the real estate market. Given the significant changes in the supply and demand relationship of the real estate market, new construction land generally should 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, implementing city-specific policies to control the pace and timing of land supply, prioritizing areas with advantageous location and complete supporting facilities, and encouraging enterprises to “secure good land and build quality housing,” thereby continuously improving urban functions and enhancing 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. In the future, local governments are expected to accelerate the storage and acquisition of idle stock land, and through reasonable adjustments in land planning and land exchanges, adopt better solutions 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. Additionally, 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 revitalizing 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