Huang Dingxi
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Introduction
International experience and practices
Development of land banking in China
Case study in Guangzhou, China
Conclusions
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Land banking is a mechanism initiated in
western countries with over 100 years of
history.
– Amsterdam, the Netherlands, since 1896
– Stockholm, Sweden since 1904
– Canada since 1950’s
– France since 1958
– Pilot projects in U.S. since 1970’s
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The acquisition of land ahead of development
either by construction companies or by
central or local government or their agencies.
(Evans 2004)
Public or publicly authorized acquisition of
land to be held for future use to implement
public land policies. (Strong 1979)
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Different categories of land banking
◦ Land banking by public sector
◦ Land banking by private companies
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Related terms
◦ Land bank
◦ Land assembly
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Correspondent term in Chinese
◦ 土地儲備 （tu di chu bei）
1 Acquisition
2 Holding
Western
From:
Mostly private lands
Either built up or open
space area
Proved as public interest
Through:
Friendly negotiation
Or Compulsory
purchase
Mechanism
For:
Various Periods
Status:
Preservation
Or Temporary use
Chinese
From:
Rural collectively owned
land
Former state -owned
enterprises
Overdue vacuum sites
Through:
Compensation or
no compensation
3 Disposition
Lease to affordable
housing
Or Sale to local
governments
Or Sale at market price
Or Sale at subsidized
price
Mechanism
For:
Various Periods
Status:
Temporary Use
Or Infra structure
Construction
Public Sale of LUR at
market price
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The power and responsibility for
implementing land banking mechanism in
western countries were usually taken by two
types of entities:
◦ Special committees
◦ Municipal/county/state owned corporations
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The power, source of finance and goals of
these entities were strictly defined by local or
national legislation. (Zhang and Wang 2003)
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Each land banking project in Europe or
America usually had an explicit major
objective.
◦ Provision of affordable housing: Sweden
◦ Control urban growth pattern: Netherlands, France
◦ Control land price: Canada, Australia
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Institution framework for implementation of
land banking were built to facilitate the
achievement of the major objective.
(Strong 1979)
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As a mechanism of public intervention in the
land development process, land banking
affects city development in several aspects
beyond the initiate major objective.
Flenchner (1974) summarized the effects of
land banking practice in western countries as:
 Control on urban growth pattern
 Capturing capital gains for public finance
 Land price regulation
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In central Europe, to solve the problem of
fragmentation of agricultural lands.
In Africa, as a way to control social tensions arising
from imbalanced distribution of resources, local
overpopulation, unemployment and involuntary
displacement in the past. (VanDijk & Kopeva 2006)
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Constitution Amendment
1982
◦ Article 10:Clarification of state land
ownership in urban area
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Economic reform in cities began
& Pilot trials of urban land market
1984
◦ Land-use fee and arable land
occupation fee
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Land Administration Law
1986
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First open land use right
auction in Shenzhen
Land Administration Law
Amendment
1987
1988
◦ Approval of urban land use
right (LUR) transaction
◦ Dual-track urban LUR market
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1992
1996
Land Administration Law
Amendment & Establishment 1998
of MLR[1]
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LDC@GZ[2]
LBC@SH[3]
◦ Overall land use plan
[1]MLR=Ministry of Land and Resources
[2]LDC= Land Development Center
[3]LBC= Land Banking Center
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During the early period of LUR market (in the
1990’s), LUR were traded under a dual-track
market:
◦ Co-existence of market supplied land with
administratively allocated land
◦ Great difference in LUR prices
◦ Existence of an uncontrolled black market
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Land value gains were flowing to powerful
companies or individuals rather than the
government.(Xie 2002)
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Guangzhou Land Development Centerestablished in 1992 to facilitate
comprehensive development of new city
center via land banking mechanism.
Establishment of Shanghai Land Banking
Center in 1996- recognized as the 1st city
land banking authority in China in most
Chinese literature.
(Source: Yang et al 2005)
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Direct Top- Down promoting forces
◦ Minister of Land and Resources highly praised
Hangzhou’s land banking experience at a conference
of mayors in 1999. (Zhou, 1999)
◦ In 2001, State Council’s Announcement for
strengthening state owned assets management
(Document No.15-2001) recommended “cities with
suitable conditions” can implement land banking to
“strengthen the ability to adjust the land
market”.(State Council,2001)
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Central Government’s effort to establish a
single-track LUR market
◦ Announcing LUR to use all kinds of land for business
use (residential, commercial and tourism ) and
industrial use must be sold publicly by bidding,
auction and public announcement in since 2002 and
2007 respectively. (MLR, 2002,2007)
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City governments are becoming economic
interest group preoccupied with local growth in
the process of decentralization during
economic reform in China. (Zhu 2004; Xu and
Yeh 2005)
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Introduction of different practices.
Proposals or solutions for the problems
arousing with the implementation of public
land banking.
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Quantity and location of land for banking
Finance
Risk management
Institutional structure and legislation
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What are land banking mechanism’s possible
effects on city development in China?
How to define explicit objectives of
implementing the land banking mechanism?
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The similar mechanism as the western practices
may lead to similar effects on:
◦ Land price
◦ Revenue of city governments
◦ Urban growth pattern
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Under the rapid development context of China,
land banking may also influence the process of
socio-spatial restructuring:
◦ Re-distribution of residential areas of different social
classes
◦ Speedy urbanization of the former rural areas affected
by land banking
◦ Upgrade of industrial sector when industrial land is no
longer free of charge
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Guangzhou land development center
established in 1992 under the Guangzhou
Land and Resource Bureau.
Authorized by the municipal government to
implement land resumption, acquisition, land
banking, and LUR sales
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Source of land bank
◦ Resuming state-owned land when the LUR owner
 Delays development for an overdue period
 Or no longer exists
◦ Purchase of urban LUR
◦ Acquisition of collectively-owned rural farm land
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By the end of 2004, the GZLDC was holding a
land bank of 2854.96 hectares.
Spatial Distribution of GZLDC’s land bank at Dec 2004
(source: provided by GDLDC through interview)
Key development
areas of Guangzhou
at the period of
2006-2010
(Source: Short-term
development plan of
Guangzhou from
2006 to 2010)
LUR sale from GZ land bank
5,000,000
4,500,000
LUR Sale (m2)
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2002
2003
2004
2005
2006
Site area
100566
232933
106007
465580
1792245
Floor Area
232664
870746
356679
2044883
4552670
Source: Generated from public database of website of
Guangzhou Land and Housing Bureau(www.laho.gov.cn)
Price of LUR Sale from Land Bank of Guangzhou (2002-2006)
Price (RMB￥ / m2 F A)
8000
7000
6000
5000
4000
3000
2000
1000
0
2002
2003
2004
2005
2006
C.Avg
2505
2502
2715
2865
3755
R.Avg
2358
1862
2395
2356
2462
C.Max
2505
3847
2715
3818
7366
R.Max
2415
2899
3016
3595
6274
Source: Generated from public database of website of
Guangzhou Land and Housing Bureau(www.laho.gov.cn)
45.00
40.00
35.00
Billion RMB ￥
30.00
25.00
20.00
15.00
10.00
5.00
0.00
2002
2003
2004
2005
2006
Income from L.B.
0.55
2.11
0.87
5.63
13.04
City Fiscal Income
26.91
30.05
33.85
40.88
42.71
Infra Structure Investment
15.00
14.60
21.60
25.60
25.30
Comparison of land bank income, city fiscal income and
infra structure investment of Guangzhou in 2002-2006
Source: Generated from public database of website of Guangzhou Land and
Housing Bureau(www.laho.gov.cn)
(Photo sources: maps.googel.com ,www.xkb.com.cn)
Area A: 11 ha, Resumed by city land bank, and soon sold by
auction at RMB 4.6 billion with 562830 m2 of floor area.
Area B: Hotel development with villagers as share holder
Area C: High rise flats to compensate the villagers at 1
for 1 floor area ratio.
Both area B and C are built on income from area
A.
(Picture source: www.upo.cn)
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Simplified replication of a mechanism due to
scarcity of suitable institutions.
◦ Creating a suitable institutional framework for the
newly emerging LUR market in China is difficult.
However the replication of the land banking
mechanism from other cities are of little cost.
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Administration-oriented operation at city
government level
◦ Administrative document at national level was not
published until Nov 2007.
◦ Operation is regulated under administrative
documents published by city governments.
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Focusing on land development process rather
than the balanced objectives of city
development
◦ Promoted and implemented by the land administration
system of governments.
◦ Income form LUR sales as direct incentive.
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Your comments are welcome!
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Please contact: dxhuang@hkusua.hku.hk