Land Value Revitalization in Urban Renewal: Institutional Logic, Practice Models and Optimization Paths from China’s First-Tier Cities

Abstract

Urban renewal is essentially a process of redefining land property rights, restructuring land use functions and redistributing land value increment, which is of great significance for improving the efficiency of land resource allocation and realizing sustainable land management. This study investigates the urban renewal practice of 21 pilot cities in China, and focuses on the policy frameworks, implementation models and financing mechanisms of urban renewal in four first-tier cities, Beijing, Shanghai, Guangzhou and Shenzhen, through comparative analysis of policy documents and typical case studies. The results show that: (1) the current system for revitalizing land value through urban renewal remains exploratory in China, and the top-level design of land-related systems requires improvement; (2) there are obvious differences in land value distribution mechanisms under different renewal models, and the multi-stakeholder collaborative value sharing mechanism is insufficient; (3) the single financing model leads to blocked land value realization paths, and it is difficult to balance investment and return. Based on the findings, this study proposes targeted optimization paths for sustainable land value revitalization in urban renewal, which provides empirical evidence for land policy innovation and land resource value realization.

1. Introduction

Urban renewal is an enduring theme in urban development and becomes increasingly essential when urbanization reaches a certain maturity level. In recent years, the Chinese government has significantly emphasized urban renewal initiatives, recognizing them as crucial national engineering projects and incorporating them into the National 15th Five-Year Plan. Clearly, urban renewal has risen in importance to an unprecedented level. It not only facilitates the efficient utilization of existing urban land resources but also promotes urban transformation through innovative models, policy adjustment and the creation of new demands [1,2]. Furthermore, urban renewal provides an effective means to re-plan and upgrade the environment within existing urban areas, addressing longstanding problems such as inadequate infrastructure, poor maintenance and low design standards [3,4,5]. Additionally, it helps resolve issues of uneven and insufficient urban development [6]. By the end of 2025, the urbanization rate in China has reached 67.89%1, indicating the country’s transition from rapid urban expansion toward a new developmental phase that emphasizes both renewal of existing urban stock and incremental construction. Consequently, the implementation of urban renewal has become an inevitable necessity to adapt to these emerging challenges and ensure high-quality urban growth [7]. It is also a crucial approach to solving outstanding urban issues, enhancing residents’ sense of satisfaction, happiness and security. As a core practice of urban stock land reallocation and land value revitalization, urban renewal essentially involves the redefinition of land property rights, the restructuring of land use functions, and the redistribution of land value increments. Existing studies on China’s urban renewal mostly focus on governance models and policy effects, while few have systematically analyzed the institutional logic and practical obstacles of land value revitalization in the renewal process. This study fills this gap by investigating 21 pilot cities and four first-tier city cases, providing empirical support for improving the efficiency of land resource allocation and realizing sustainable land management.

Urban renewal primarily refers to the regeneration of urban areas characterized by communities with physical deterioration, substandard environmental conditions, and economic decline, particularly in the context of advanced or saturated stages of urbanization [8,9]. It serves as a strategic mechanism to reallocate public resources more efficiently, frequently involving the comprehensive demolition and redevelopment of outdated structures [10,11]. Since the start of economic reforms, China has actively pursued large-scale urban renewal as a central strategy for urban transformation [12,13,14]. Guided by market-oriented principles, the focus has shifted toward the redevelopment of old-fashioned neighborhoods, obsolete industrial sites, and informal settlements such as urban villages. In 2015, the Central Urban Work Conference marked a paradigmatic shift by formally articulating a “people-centered” approach to urban development. Since then, China’s urban governance has transitioned toward holistic and refined management of stock urban space. However, persistent challenges, such as financial constraints, institutional misalignments, and limited private-sector engagement, have undermined the sustainability of urban renewal efforts [15]. These limitations underscore the inadequacy of relying solely on top-down administrative mechanisms in managing urban complexity.

As a core mechanism for achieving sustainable urban development, urban renewal has received significant attention from the academic community [16]. According to the identity of the initiators, scholars categorize urban renewal into three models: government-led, market-led, and citizen self-organization [17,18]. Due to China’s unique institutional context, administrative factors often outweigh economic factors in urban spatial development and governance. Therefore, government-led large-scale planning, renovation, and reconstruction have become the mainstream trend. However, under the pressure of performance-oriented governance, some cities have experienced extensive demolition and reconstruction, resulting in the erosion of historical character and significant resource waste [19,20]. The market-led model, by partially shifting the government’s primary responsibility to enterprises, can alleviate financial burdens and enable enterprises to profit, creating a seemingly “win–win” situation [21]. However, as profit-driven entities, enterprises often prioritize economic gains over the legitimate rights and interests of residents, thereby exacerbating issues of social justice [22,23]. In contrast, the citizen self-organization model can mitigate both financial pressure and concerns over social equity [24,25]. Although this model empowers citizens to manage their private property rights without violating their own interests, it is hampered by the lack of a dedicated funding mechanism and persistent financial shortages.

Recognizing the limitations of these three models, scholars have engaged in ongoing experimentation and refinement to establish a more sustainable urban living environment, thereby accumulating valuable experience for advancing urban renewal practices. In China, the goal of urban renewal has shifted toward promoting high-quality, human-centered development, pursued through a multi-stakeholder, synergistic, and pluralistic governance model. In this framework, the government assumes a coordinating role, guiding the renewal process from the top down. Various incentives, such as adjustments to plot ratios, changes in property rights, functional area compatibility, and financial subsidies, are utilized to balance interests among diverse stakeholders [26,27,28,29]. Nevertheless, the top-down pluralistic consultation mechanism remains at an exploratory stage, lacking comprehensive policy and institutional support [30]. Moreover, the substantial value appreciation associated with urban renewal projects has further complicated the equitable distribution of benefits among stakeholders [31,32]. Against this backdrop, we analyze the urban renewal histories of China’s four top-tier cities—Beijing, Shanghai, Guangzhou and Shenzhen—summarizing the development trends and lessons learned, with the aim of exploring an urban renewal path with Chinese characteristics that is adaptable to each city’s unique development context.

The remainder of this research is organized as follows. Section 2 presents the theoretical framework, methodology and data sources. Section 3 describes the current situation of urban renewal policies and pilot cities. Section 4 provides typical case studies of three renewal models. Section 5 analyzes the main challenges. Section 6 discusses the findings. Section 7 concludes and offers policy recommendations.

2. Theoretical Framework, Methodology and Data Sources

This study grounds its theoretical and methodological framework in three well-established academic domains, land economics, urban governance, and institutional analysis, responding directly to calls for multi-disciplinary research on urban land value distribution mechanisms in emerging market contexts. We define core constructs explicitly, construct an integrated analytical framework linking institutional context, stakeholder behavior, and land value distribution, and then introduce the case selection strategy, comparative analytical framework, and data sources to ensure the rigor and replicability of subsequent empirical analysis.

2.1. Core Concept Definition

Consistent with classic land studies and adapted to the institutional context of China’s urban renewal practice, we operationalize three core constructs with clear measurement standards for this study.

2.1.1. Land Value Revitalization

Rooted in land rent gradient theory [33], this concept refers to the full process of reconstructing the composite economic, social, and ecological value of underused stock land through planning adjustment, industrial functional upgrading, public service provision, and living environment improvement in urban renewal schemes. This construct encompasses not only land price appreciation but also improvements in public service coverage and the value gains for resettled residents.

2.1.2. Institutional Logic

Drawing on the widely adopted institutional logic framework [34], we define this as the combination of formal policy constraints and informal interest negotiation rules that shape stakeholder behavior in urban renewal, consisting of three interwoven sub-logics: administrative logic (top-down policy mandates and local government performance objectives), market logic (profit requirements of private development entities), and social logic (resettlement demands of original residents and public interest obligations).

2.1.3. Land Value Capture

Based on the canonical definition of public value capture for land-related public investment [35], we adapt this concept to China’s public land ownership system as the policy mechanism through which local governments recoup land value increments generated by urban renewal and allocate them to public welfare investment via tools including floor area ratio incentives, land transfer revenue adjustment, public facility contribution fees, and affordable housing matching requirements.

2.2. Theoretical Foundation

This study develops an integrated analytical framework drawing on three complementary theoretical perspectives widely applied in land policy and urban governance research, responding to long-standing debates in the field.

2.2.1. Land Value Capture Theory

As the core theoretical mainline of the study, this perspective focuses on how to design fair distribution mechanisms for land value increments generated by public investment and planning adjustment to prevent private capture of public value [35]. While existing western studies mostly focus on tax-based value capture tools, this study expands the analytical scope to non-tax tools including planning adjustment and property right restructuring under China’s public land ownership regime, addressing ongoing debates about the applicability of land value capture theory in transitional economy contexts [36].

2.2.2. Institutional Theory

This perspective emphasizes how formal and informal institutional constraints shape public policy implementation outcomes [37]. Existing research on China’s urban renewal is dominated by single-city case studies, and we introduce institutional theory to explain cross-city variation in urban renewal policy design, contributing to the emerging literature on the interaction between central–local policy dynamics and local land governance innovation [38].

2.2.3. Urban Political Economy and Stakeholder Theory

This analytical perspective focuses on multi-stakeholder interest bargaining in urban space production processes [39]. Existing studies tend to focus on single stakeholders (either government or private developers), and we apply this perspective to analyze coordination mechanisms between government, market entities, and original residents under different governance models, responding to debates about optimal multi-stakeholder governance pathways for large-scale public land development projects.

The three perspectives form a logically consistent analytical chain: institutional theory explains the external contextual constraints shaping urban renewal schemes, land value capture theory frames the core value distribution process, and stakeholder theory explains micro-level actor behavior. The integrated analytical framework is visualized in Figure 1:

2.3. Case Selection Criteria

Consistent with standard multi-case study design norms in land policy research, we adopt a nested multi-case selection strategy covering both nationally representative pilot cities and benchmark first-tier cities to avoid selection bias and improve the generalizability of our research findings: the 21 national urban renewal pilot cities are selected from the first batch of national urban renewal pilot cities released by the Ministry of Housing and Urban–Rural Development of China in 20212, covering 16 provinces across eastern, central, and western China with large variations in economic development levels, resource endowments, and urban renewal practice models to represent the overall landscape of urban renewal development in China; the four first-tier cities (Beijing, Shanghai, Guangzhou, Shenzhen), as the earliest cities to launch large-scale urban renewal practices in China with the most mature policy systems and operational models, have had their policy innovations referenced and replicated by more than 10 pilot cities, providing benchmark cases for cross-model comparative analysis.

2.4. Comparative Analytical Framework

Building on the integrated theoretical framework, we apply a unified three-dimensional comparative framework for cross-city and cross-model analysis, with each dimension directly mapped to core theoretical constructs to ensure consistent alignment between conceptual design and empirical analysis. First is the Institutional Environment Dimension (external contextual constraint layer): aligned with institutional theory and the institutional logic construct, this dimension includes local land property rights structures, upper-level planning constraints, and supporting policy systems for urban renewal, used to analyze contextual differences shaping urban renewal practices across cities. Second is the Governance Structure Dimension (operational process mechanism layer): aligned with stakeholder theory, this dimension includes the lead actor of renewal projects, multi-stakeholder coordination mechanisms, and public participation rules, supporting comparisons of operational efficiency and interest balance outcomes of different governance models. Third is the Value Distribution Dimension (outcome evaluation layer): aligned with land value capture theory and the land value revitalization/value capture constructs, this dimension includes the proportion of total value increment allocated to the public sector, market entities, and resettled residents, applied to evaluate the fairness and sustainability of different renewal models.

2.5. Analytical Procedure and Data Sources

This study adopts a mixed-methods research design combining policy document analysis and case comparative study, consistent with the research scope outlined in the introduction, with data collected from two publicly accessible, authoritative sources:

First, we retrieved official policy documents related to urban renewal land management, land value increment distribution and supporting incentive mechanisms issued by the 25 sample cities (21 national urban renewal pilot cities + 4 first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen). All documents are obtained from the official policy disclosure columns of local natural resources bureaus and housing and urban–rural development bureaus, covering four hierarchical regulatory levels: local statutory regulations, administrative management measures, project implementation rules, and special incentive policies for urban renewal.

Second, consistent with the research focus on first-tier city practice models, we collected publicly disclosed official implementation plans, land value increment accounting reports and stakeholder benefit distribution statements for typical urban renewal projects in the four first-tier cities, covering the three dominant renewal modes analyzed in this study: government-led public welfare renewal, market-operated commercial renewal, and multi-stakeholder collaborative renewal. All case data are sourced from official government information disclosure platforms and publicly available project completion acceptance reports.

We conducted horizontal comparison of urban renewal models in the four first-tier cities based on the three-dimensional framework, following the replication logic of case study research: literal replication for cases with similar models to verify conclusion generalizability, and theoretical replication for cases with different models to explore boundary conditions of different model applicability. We then summarize common implementation obstacles and policy optimization pathways based on cross-case comparison results.

3. Current Situation of Urban Renewal Development in China

3.1. Policy Context for the Emergence of the First Pilot Cities

The pace of urbanization in China has shifted from rapid growth to moderate growth. In the new stage of development, urbanization increasingly emphasizes a people-centered approach and focuses on enhancing quality. Urban renewal has thus emerged as a critical component in fostering the “dual-circulation” development pattern and improving citizens’ well-being and quality of life. The necessity, strategy and urgency of promoting urban renewal are therefore self-evident. However, due to regional disparities in urban development, urban renewal efforts continue to face significant challenges, such as aging buildings, insufficient infrastructure, and low levels of public services across different urban development stages.

To address these pressing issues during this critical period of urban renewal, the General Office of the Ministry of Housing and Urban–Rural Development issued the Notice on the First Batch of Urban Renewal Pilot Work in November 2021. This policy initiated a two-year urban renewal pilot program across 21 cities (districts) as shown in

Table 1. Regional Distribution of the First Batch of National Urban Renewal Pilot Cities.

Region	Number of Pilots	Cities (Districts)
Eastern China	6	Jiangsu: Nanjing, Suzhou; Shandong: Yantai, Weifang; Zhejiang: Ningbo; Fujian: Xiamen
North China	3	Beijing; Hebei: Tangshan; Inner Mongolia: Hohhot
Central China	6	Jiangxi: Nanchang, Jingdezhen; Hubei: Huangshi; Hunan: Changsha; Anhui Province: Chuzhou, Tongling
Southwest China	3	Chongqing: Yuzhong, Jiulongpo Districts; Sichuan: Chengdu
Northwest China	2	Ningxia: Yinchuan; Shaanxi: Xi’an
Northeast China	1	Liaoning: Shenyang

, aiming to rigorously uphold the fundamental requirements of urban renewal and transform traditional urban development models. The pilot program requires participating cities not only adhere to baseline standards but also innovate in working mechanisms, implementation models, support policies, technical approaches, and management systems, all tailored to local conditions. Through these pilot initiatives, the program seeks to optimize urban structure, enhance functional quality, and improve the overall urban environment. Ultimately, it aims to accumulate replicable experiences and best practices, enabling the scientific and orderly implementation of urban renewal nationwide.

This policy emphasizes strengthening a government-coordinating working mechanism, with a focus on enhancing organizational leadership and promoting systemic integration. Urban renewal involves multiple stakeholders and spatial dimensions, encompassing issues related to livelihood, property rights, the environment, functionality, and historical preservation. In this context, the government-led model aligns more closely with China’s national conditions. It is essential to gradually establish a self-improving and self-optimizing urban governance mechanism, wherein government leadership is complemented by market-driven dynamics. In terms of specific approaches, policy formulation should prioritize comprehensive evaluation and highlight key focus areas, guided by overall urban renewal plans and annual implementation schedules. Moreover, local regulations and administrative rules should be introduced promptly to provide legal safeguards for practical implementation. Regarding implementation models, it is necessary to explore sustainable frameworks that promote market-oriented operations and encourage broad public participation. In terms of funding mechanisms, efforts should focus on increasing financial investment across all levels of government, strengthening credit support, and actively guiding social capital to participate in urban renewal initiatives.

The 21 pilot cities are geographically distributed across Eastern, Northern, Central, Southwestern, Northwestern, and Northeastern China, involving 16 provinces and municipalities, accounting for 51.6% of the country’s 31 provinces (cities). Among them, Shandong, Jiangsu, Anhui, Chongqing and Jiangxi province each have two pilot cities, while Beijing, Inner Mongolia, Liaoning, Hebei, Shaanxi, Ningxia, Sichuan, Hubei, Hunan, Zhejiang and Fujian province each have one pilot city. Currently, 11 of the pilot cities have officially issued relevant policy documents and have begun implementing urban renewal projects. The remaining cities are in stages of review, pilot testing, or provisional implementation. A summary of the policy publications from selected pilot cities is provided in

Table 2. Overview of Urban Renewal Policy Documents for the First Batch of 21 National Urban Renewal Pilot Cities.

City (Province)	Release Date	Core Policy Content	Policy Type
Chengdu (Sichuan)	May 2020	Implementation Measures for Urban Organic Renewal	Measures
Changsha (Hunan)	Mar 2021	Guidelines on Comprehensive Promotion of Urban Renewal	Guidelines
Tongling (Anhui)	Jun 2021	Special Plan for Urban Renewal (2021–2035)	Special Plan
Yinchuan (Ningxia)	Aug 2021	Three-Year Action Plan for Urban Renewal (2021–2023)	Action Plan
Xi’an (Shaanxi)	Nov 2021	Urban Renewal Implementation Measures	Measures
Shenyang (Liaoning)	Dec 2021	Urban Renewal Management Measures	Measures
Nanjing (Jiangsu)	Mar 2022	Urban Renewal Pilot Project Implementation Plan	Implementation Plan
Yantai (Shandong)	May 2022	Special Plan for Urban Renewal	Special Plan
Suzhou (Jiangsu)	Oct 2022	Urban Renewal Pilot Project Implementation Plan	Implementation Plan
Chuzhou (Anhui)	Nov 2022	Urban Renewal Action Implementation Plan for High-quality Development	Action Plan
Beijing	Mar 2023	Urban Renewal Regulations	Local Regulations

.

3.2. Compilation and Analysis of Urban Renewal Policies in First-Tier Cities

The differences in urban renewal policy frameworks across the four first-tier cities essentially reflect different orientations of local governments in land property rights adjustment, land value increment distribution, and land use control, which directly shape the land value revitalization paths of each city.

3.2.1. Timing of the Release and Implementation of Urban Renewal Regulations

On October 29, 2020, the proposal for China’s 14th Five-Year Development Plan and the Long-Range Goals for 2035 formally proposed the implementation of urban renewal actions. In November 2020, Menghui Wang, the then Minister of the Ministry of Housing and Urban–Rural Development of the People’s Republic of China, issued the policy document Implementation of Urban Renewal Actions, which explicitly set the goal of urban renewal as building livable, green, resilient, smart, and humanistic cities. Subsequently, Shenzhen, Guangzhou, Shanghai, and Beijing each introduced their respective local regulations: the Shenzhen Special Economic Zone Urban Renewal Regulations, the Guangzhou Urban Renewal Regulations (Draft for Comments), the Shanghai Urban Renewal Regulations, and the Beijing Urban Renewal Regulations, establishing frameworks for urban renewal planning and construction. Currently, Shenzhen, Shanghai and Beijing have formally implemented their urban renewal regulations, while the Guangzhou regulations remain at the consultation stage and have yet to be officially implemented (see

Table 3. Timelines and Attributes of Local Urban Renewal Regulations.

City	Regulation Attributes	Announcement Date	Implementation Date	Implementation Cycle
Beijing	Local formal regulation	Nov 2022	Mar 2023	4 months
Shanghai	Local formal regulation	Aug 2021	Sept 2021	1 month
Guangzhou	Exposure draft (not formally issued)	Jul 2021	Not yet implemented	/
Shenzhen	Special economic zone formal regulation	Dec 2020	Mar 2021	3 months

). As higher-level local regulations, these urban renewal frameworks are characterized by their stability and legal authority. On the one hand, they serve to standardize governmental administrative behaviors, harmonize the actions of various municipal departments, and effectively prevent fragmented or inconsistent practices among district-level governments. On the other hand, they provide critical policy guidance for the implementation of urban renewal projects, stabilize market expectations, and enhance the willingness of multiple stakeholders to invest in urban renewal initiatives.

As China’s four major first-tier cities, Beijing, Shanghai, Guangzhou, and Shenzhen have led the way in promulgating urban renewal regulations and pioneering practical efforts. Analyzing the content, priorities, and local practices of their regulations offers valuable insights into the latest trends in China’s urban renewal landscape. Moreover, this analysis provides a basis for diagnosing potential challenges and drawing lessons that can guide other cities as they embark on their urban renewal endeavors.

3.2.2. Overall Structure of Urban Renewal Policy in First-Tier Cities

To further understand the priorities of urban renewal across the four first-tier cities, we summarize the structural characteristics of their local urban renewal regulations, including the number of sections, section titles, number of articles, character count, and the percentage distribution of text across sections. The detailed information is presented in

Table 4. Chapter Structure and Content Proportion of Urban Renewal Regulations in Beijing, Shanghai, Guangzhou and Shenzhen.

City	Chapter No.	Chapter Title	Number of Articles	Number of Characters	Text Percentage
Beijing	1	General Rules	11	2398	20.66%
	2	Urban Renewal Planning	6	781	6.73%
	3	Urban Renewal Subjects	12	2208	19.02%
	4	Urban Renewal Implementation	17	3689	31.78%
	5	Urban Renewal Guarantee	8	2102	18.11%
	6	Supervision and Management	4	406	3.50%
	7	By-laws	1	24	0.21%
Shanghai	1	General Rules	10	1322	15.84%
	2	Urban Renewal Guidelines and Renewal Action Plan	8	999	11.97%
	3	Urban Renewal Implementation	16	2812	33.69%
	4	Urban Renewal Guarantee	15	1968	23.58%
	5	Supervision and Management	5	596	7.14%
	6	Special Regulations for Urban Renewal in Pudong New District	6	427	5.12%
	7	Legal Liability	2	103	1.23%
	8	By-laws	2	120	1.44%
Guangzhou (Exposure Draft)	1	General Rules	8	1017	11.82%
	2	Planning and Management	8	1142	13.28%
	3	Planning and Implementation	6	926	10.76%
	4	Land Management	8	1365	15.87%
	5	Supervision and management	9	1784	20.74%
	6	Protection of Rights and Interests	7	1273	14.80%
	7	Legal Liability	5	791	9.20%
	8	By-laws	2	304	3.53%
Shenzhen	1	General Rules	12	1402	14.04%
	2	Urban Renewal Planning and Programming	11	1874	18.77%
	3	Demolition and Redevelopment Type of Urban Renewal	22	3722	37.28%
	4	Comprehensive Urban Renewal	8	1044	10.46%
	5	Safeguards and Oversight	10	905	9.06%
	6	Legal Liability	6	669	6.70%
	7	By-laws	3	369	3.70%

.

Generally, urban renewal regulations in these cities are composed of 7–8 sections, encompassing approximately 50–75 articles and 8000–12,000 characters. The contents typically address several key areas: general provisions, renewal planning, implementation procedures, safeguard measures, supervision and management, and supplementary provisions. However, the focus of these regulations varies across cities. Beijing and Shanghai place the greatest emphasis on the implementation stage of urban renewal, with implementation-related provisions accounting for 31.78% and 33.69% of their total text, respectively. The Shenzhen Special Economic Zone Urban Renewal Regulations specifically highlight demolition and reconstruction-related provisions, dedicating 3722 characters (37.28% of the total) to two major types of projects: demolition and reconstruction, and comprehensive renovation. In contrast, Guangzhou urban renewal regulations place greater emphasis on supervision and management, with this section accounting for 20.74% of the texts, significantly higher than in the other three cities, which focus more heavily on the implementation aspects of urban renewal projects.

3.2.3. Specific Contents and Comparison of Urban Renewal Policy in First-Tier Cities

In addition to analyzing the overall structure of the urban renewal regulations in first-tier cities, we also conduct an in-depth analysis of their specific content. This study primarily compares the characteristics of urban renewal policies in Beijing, Shanghai, Guangzhou, and Shenzhen from four aspects: administrative department participation, renewal principles, classification of renewal objects, and the scope of renewal activities (see

Table 5. Comparative Analysis of Urban Renewal System Frameworks and Implementation Focus in Beijing, Shanghai, Guangzhou and Shenzhen.

City	Renewal Classification	Core Exclusive Principles	Lead Functional Departments	Key Content Focus
Beijing	Residential/industrial/facility/public space renewal, Regional comprehensive renewal	Technology-empowered, Problem-oriented, Demand-driven	Housing & Construction, Planning, District-level authorities	1. Housing safety & living quality improvement
				2. Industrial stock space efficiency upgrading
				3. Public space environmental optimization
Shanghai	Regional renewal, Piecemeal renewal	Piecemeal promotion, Data-empowered, Green & low-carbon	Housing & Construction, Planning, Economy & Information departments	1. Mega-city infrastructure optimization
				2. Regional functional layout adjustment
				3. Urban characteristic style shaping
Guangzhou	Micro renovation, Comprehensive renovation, Mixed renovation	Systematic and orderly, Democratic priority	Housing & Construction, Natural Resources departments	1. Historical heritage protection
				2. Public facility upgrading
				3. Old neighborhood renovation
Shenzhen	Demolition & reconstruction, Comprehensive improvement	Public welfare priority, Conservation and intensification, Market operation	Urban renewal bureaus	1. Infrastructure upgrading
				2. Hazardous building renovation
				3. Inefficient land redevelopment

).

First, regarding the participation of administrative departments, all four cities designate the municipal people’s government as the overall coordinator of urban renewal efforts. However, the description of responsibilities among various government levels and departments differ slightly. Guangzhou, Shanghai, and Beijing have designated their respective municipal housing and construction departments as the primary authorities responsible for urban renewal, while planning and natural resources departments are responsible for preparing multi-level renewal plans and managing land resources. In contrast, only Shenzhen’s regulations do not explicitly specify an updated competent department [40]. At the operational level, there are notable differences: Guangzhou regulates urban renewal management only at the district level; Shenzhen extends regulation to street office level; Shanghai regulates both street and town levels; and Beijing reaches down to the neighborhood and village committee levels below the street and town levels. It is also noteworthy that Beijing and Shanghai explicitly call for the establishment of dedicated urban renewal agencies. The Beijing Urban Renewal Regulations propose the establishment of an expert committee and outline the responsibilities of designated planners and architects, while the Shanghai Urban Renewal Regulations advocate for the establishment of an urban renewal center to support the city’s renewal activities.

Second, regarding renewal principles, there has been a clear evolution over time. Initially focused on basic concepts such as government coordination, planning guidance, and public participation, the principles have gradually expanded to incorporate digital technology, green and low-carbon development, and a stronger emphasis on addressing residents’ needs. In addition, both Shanghai and Beijing explicitly advocate the “preservation, renovation and demolition” principle, prioritizing preservation and protection.

Third, regarding the classification and scope of urban renewal, variations are evident across cities. Shenzhen categorizes urban renewal into demolition and reconstruction, and comprehensive governance. Guangzhou divides it into micro-renovation, comprehensive renovation, and mixed renovation. Shanghai differentiates between regional and sporadic renewal. Beijing classifies urban renewal into five categories: residential, industrial, facility, public space, and regional integration. Despite some differences, there are commonalities: all four cities incorporate both public service facilities and urban infrastructure within their renewal activities. However, differences are observed in their emphasis. Shenzhen and Guangzhou focus more heavily on areas characterized by harsh environments, safety risks, and non-compliance with evolving social development needs. In contrast, Shanghai places greater importance on optimizing regional functional layout, improving the living environment, and enhancing the urban landscape. Beijing, distinctively, excludes land reserves and real estate development projects from the scope of urban renewal, underscoring its focus on residential, industrial, facility, public space, and comprehensive regional renewal.

From the perspective of land management, Guangzhou’s separate chapter on land management in its regulations, Shenzhen’s detailed provisions on demolition and redevelopment, and Beijing’s exclusion of commercial residential development from the scope of renewal all represent different institutional explorations of balancing public interests and market returns in the process of land value revitalization.

4. Typical Case Study of Urban Renewal

Different urban renewal models correspond to differentiated land value distribution mechanisms: the government-led model emphasizes the public welfare attribute of land value increment, the market-driven model prioritizes the return on investment of market entities, and the multi-stakeholder collaborative model focuses on balancing the interests of multiple stakeholders in the process of land value appreciation.

The current urban renewal models in China can generally be divided into three types: government-led, market-driven and multi-stakeholder collaborative models. Government-led model refers to the government playing the dominant role throughout the entire process, from policy formulation and planning preparation to project development and post-construction management. Relying on institutions such as the Housing and Urban Development Bureau, Housing Management Bureau, community committees, state-owned or centrally owned enterprises, local governments directly undertake urban renewal activities. Typical examples of this model include the Hongqi Village Renewal Project in Shanghai, the Comprehensive Renovation Project of Pazhou Village in Haizhu District, Guangzhou, and the Dachong Old Village Renovation Project in Shenzhen. The market-driven model involves the government formulating guiding policies and delegating certain rights and interests to market actors, utilizing the market’s development and operational capacities to drive urban renewal. Representative cases include the renovation of Liede Village in Guangzhou, the Taipingqiao Old City Renovation Project in Shanghai, and the Jiazhaoye City Square Project in Shenzhen. The multi-stakeholder collaborative model emphasizes enhancing public participation, focusing more strongly on public interests and residents’ rights, and encouraging landowners to lead the renovation of their own properties. Typical examples include the Yongqing Square Renovation Project in Guangzhou, the Wangjing Xiaojie Renovation Project in Beijing, and the Hong’anli Renovation Project in Shanghai. The cities where these cases are located, along with the participating parties involved, are shown in

Table 6. Typical Models, Cases and Participating Subject Characteristics of Urban Renewal.

Patterns	Definition	Classic Cases	Participating Subjects
Government-led	Government takes the dominant role in full lifecycle of policy-making, planning, construction and operation.	1. Hongqi Village Old Renewal (Shanghai)	Shanghai Zhonghuan Group [SOE], Zhonghai Real Estate [SOE]
		2. Pazhou Village Renovation (Guangzhou)	Guangzhou Natural Resources Bureau [Gov], Poly Group [CSOE], China Resources Land [CSOE]
		3. Dachong Old Village Renovation (Shenzhen)	China Resources Land [CSOE]
Market-driven	Government delegates partial rights to market entities, relies on market capital and operational capabilities for project implementation.	1. Liede Village Renovation (Guangzhou)	Fuli Real Estate [Mkt], Hejing Taifu Real Estate [Mkt], Sun Hung Kai Properties [Mkt]
		2. Taipingqiao Old City Renovation (Shanghai)	Ruian Group holds 97% of total project shares [Mkt]
		3. Jiazhaoye City Square Renovation (Shenzhen)	Jiazhaoye Group [Mkt]
Multi-stakeholder Collaboration	Introduce public participation to protect public interests and residents’ demands in the renewal process.	1. Yongqing Square Renovation (Guangzhou)	Liwan District Urban Renewal Bureau [Gov], Vanke Real Estate [Mkt]
		2. Wangjing Xiaojie Renovation (Beijing)	Wangjing Xiaojie Autonomous Committee [Pub], Vanke Group [Mkt], Fangheng Group [Mkt]
		3. Hong’anli Renovation (Shanghai)	China Merchants Shekou [Mkt], Greenland Group [Mkt], Shanghai Real Estate Group [SOE]

Note: [Gov] = Government department, [SOE] = Local state-owned enterprise, [CSOE] = Central state-owned enterprise, [Mkt] = Market entity, [Pub] = Public autonomous organization.

. To further deepen our understanding of these three urban renewal models, we will select two representative cases from each category for detailed analysis in the following sections.

4.1. Government-Led Urban Renewals

The Hongqi Village renewal project in Shanghai is located between Zhongning Road in the east, Caoyang Road to the west, Wuning Road to the south, and Tongchuan Road to the north, covering an area of less than 600 acres. As of 2014, the area accommodated 70 printing factories, 207 cold storage facilities, 9 large markets, 16 establishments categorized as “four small” businesses (small hotels, small supermarkets, small restaurants, and small entertainment venues), more than 1200 business operators, 4800 tenants, and a floating population of nearly 100,000. At that time, it was the largest and most urgently needed urban village transformation project in central Shanghai.

The renewal of Hongqi Village started in March 2015, with the demolition and implementation managed by Shanghai Zhonghuan Investment and Development (Group) Co., Ltd., a company wholly owned by the State-owned Assets Supervision and Administration Commission of Putuo District. By the end of 2016, the primary phase of land consolidation was largely completed. In October 2018, Shanghai Haisheng Huansheng Real Estate Development Co., Ltd.—a consortium jointly established by Zhonghai Real Estate (70% shareholding), Shanghai Zhonghuan Investment and Development (Group) Co., Ltd. (20%), and Shanghai New Changzheng (Group) Co., Ltd. (10%)—acquired four land parcels in Hongqi Village at a land price of 9.399 billion yuan. The actual controller of the latter two companies is the Rural Collective Asset Management Committee of Changzheng Town, Putuo District. Between January and February 2020, the consortium further acquired the remaining old and renovated land parcels for an additional 1.914 billion yuan. According to the land transfer agreements, developers were mandated to construct rental housing, affordable housing, public squares, community service facilities, and public infrastructure. Moreover, commercial properties were required to be wholly self-operated, and incoming enterprises had to align with Putuo District’s industrial positioning, focusing on sectors such as corporate headquarters, R&D centers, technological innovation, and modern commerce. In August 2019, the first phase of Zhonghai Zhenru Prefecture was launched, achieving opening within just 10 months after land acquisition. In this model, more than 30% of the land value increment is used for public facility construction and affordable housing supply, realizing the public-oriented distribution of land value.

The Dachong Old Village Renovation Project in Shenzhen represents the largest comprehensive urban village renovation project in Guangdong Province and is also the largest national project built by CR Land. The project covers a total area of approximately 680,000 square meters, with a planned construction area of 2.8 million square meters, including 1.5 million square meters of relocation housing. Following the renovation, the site will accommodate residential buildings, serviced apartments, commercial complexes, office towers, hotels, cultural theaters, three kindergartens, a primary school, and a nine-year consistent school. In terms of cooperation mechanisms, the project pioneered an integrated coordination model characterized by “government led, market-oriented operation, and participation by village collective stock companies.” In terms of business model, it adopts a “block + mall” design, blurring the boundaries between landscape and architecture and implementing the concept of urban streetscape planning. Regarding the industrial model, it promotes the integration of industry and city through the “organic renewal” concept, empowering innovative technology enterprises through technological finance and fostering the upgrading of the local science and technology innovation ecosystem.

4.2. Market-Driven Urban Renewals

Liede Village was the first urban village in Guangzhou to undergo renewal. In 1994, Liede Village signed a “Land Transfer Agreement” with the Guangzhou Land Development Center. In 2002, the Tianhe District Government approved the dissolution of the village committee and the establishment of the Liede Economic Development Company. In May 2007, the renovation plan for Liede Village was officially launched, and by July, the village collective had approved the demolition compensation scheme. In September 2007, a consortium of Fuli, Hejing Taifu, and Sun Hung Kai Properties jointly acquired commercial land in the western area of Liede Village for 4.6 billion yuan. Demolition activities began in October 2007 and were substantially completed by the end of 2009. By early 2010, relocated households had moved back to the eastern portion of the original village site. The western commercial plots were jointly developed by Fuli, Hejing Taifu, and Sun Hung Kai, with each company holding a one-third equity stake. The total construction area of the development amounts to approximately 568,000 square meters, designed as a large-scale complex integrating high-end apartments, hotels, shopping malls, and office buildings. The first apartment project, Tianluan Apartments, was launched in November 2011, experiencing a delay of 50 months from acquisition to opening. The Tianying Square office buildings and Tianying Square East Tower were subsequently launched in the second half of 2013 and 2015, respectively. The shopping mall IGC officially opened in October 2016. In this model, market entities obtain about 45% of the land value increment through commercial development, which effectively mobilizes the participation enthusiasm of social capital.

Jiazhaoye City Square is located in the core area of Banxue Gang Technology City in Longgang District, Shenzhen, on the former site of Baoji Crafts (Shenzhen) Co., Ltd. Baoji Factory—once the world’s largest manufacturer of Christmas trees. Following the company’s bankruptcy amid the 2008 financial crisis, the factory was abandoned. In January 2010, Jiazhaoye acquired the Baoji Factory site for 840 million yuan and subsequently applied to the Shenzhen Municipal Government for land-use conversion to allow commercial and residential development. The plan envisioned transforming the former factory into a large mixed-use complex—Jiazhaoye City Square—integrating commercial, residential, and educational facilities. In January 2011, the Longgang District Government approved the Baoji Factory urban renewal project, and in March 2011, the project was included among the 60 key engineering projects under Shenzhen’s 12th Five Year Plan. By September 2011, Jiazhaoye had completed negotiations and signed the “Relocation Compensation Agreement” with all affected parties. By December 2012, all relocated households had completed their house selection. The Jiazhaoye City Square project covers a site area of approximately 400,000 square meters, with a total construction area of about 1.8 million square meters. It was developed in four phases. The first sale occurred in December 2012, approximately 35 months after acquisition. By the end of 2019, three phases of development had been completed, comprising schools, office buildings, and large-scale commercial shopping centers.

4.3. Multi-Partnership Urban Renewals

In 2020, Chaoyang District adopted a multi-party construction model combining “government investment + social capital” to carry out the block-level renovation of Wangjing Xiaojie in collaboration with Vanke and Fangheng. The Wangjing Street Office invested 13 million yuan to upgrade the infrastructure, while Vanke contributed 35 million yuan to enhance the environmental quality and technological intelligence of the street, driving a comprehensive spatial and commercial revitalization of the area. The project created a diverse consumption space integrating shopping, leisure, dining, business, accommodation, and other functions, forming the distinctive “Wangjing Xiaojie” commercial district. The Wangjing Xiaojie Upgrading and Renovation Project became the first successful urban revitalization project in Beijing to integrate complex systems, making a significant milestone in the city’s urban development history. It transformed a declining municipal road into a vibrant public space and embodied a development model of “government-guided, social capital participation,” coupled with a sustainable operational model based on “co-construction, co-governance, and sharing.” The project catalyzed industrial upgrading, improved the business environment, enhanced the lifestyles of local residents, stimulated consumption and investment, and contributed to the dual upgrading of both consumption patterns and industrial structure. Today, as urban development in major cities shifts from incremental expansion to stock optimization, urban renewal has emerged as a crucial strategy for enhancing global city competitiveness. The upgrading of small streets, such as Wangjing Xiaojie, highlights how urban landscape interventions impact renewal design, emphasizing that urban renewal should not only reshape space but also preserve cultural continuity, foster social diversity, and embody humanistic care. In this model, the government, market entities and residents share the land value increment according to the investment proportion, realizing the inclusive distribution of land value.

Yongqing Square, formerly known as Yongqing Street, is located along the central section of Enning Road in Guangzhou’s historic old city. Established in 1931, the area has borne witness to the memories and lives of several generations. It is home to numerous historic dwellings and cultural relics, including Bruce Lee’s ancestral residence and Zhan Tianyou’s former home, representing a typical historic district of Guangzhou. Before renovation, Yongqing Square faced serious deterioration, with widespread dangerous structures, severe building damage, and the outmigration of younger residents. Since 2006, Guangzhou has pursued the renewal of the Enning Road area, and after more than a decade of exploration, the approach shifted from “large-scale demolition and redevelopment” to one emphasizing “protection, renewal, and adaptive reuse.” In 2016, the concept of “micro-renovation” was officially introduced. The Liwan District Government employed a BOT (Build–Operate–Transfer) model, attracting social capital to undertake transformation, construction, investment, and operational responsibilities, with project ownership reverting to the government after 15 years. At this stage, the government introduced Vanke Group through a public tender process and adopted an innovative model characterized by “government leadership, enterprise undertaking, and resident participation.”

4.4. Financing Models for Urban Renewal

The financing model of urban renewal is essentially a mechanism arrangement for the advance investment and later return distribution of land value, and the sustainability of financing directly determines whether the land value revitalization can be realized smoothly.

Depending on the type of renewal, urban renewal projects in China adopt different financing models and funding sources. Currently, China’s urban renewal financing landscape remains in a stage of exploration and optimization and can be broadly classified into three types: government investment, government–social capital partnership, and innovative exploratory financing. The types, advantages, disadvantages, and applicability of these financing models are shown in

Table 7. Implementation Methods, Advantages, Disadvantages and Application Scenarios of Government-led Urban Renewal Financing Models.

Financing Types	Implementation Methods	Advantages	Disadvantages	Applications
Financial allocation	Government direct investment via public fiscal funds	Fast project initiation, strong overall government control	Limited total funding, low renewal intensity	Low-investment comprehensive improvement projects
				Livelihood projects with strong public welfare attributes
				Land pre-development projects with unclear benefits
Special urban renewal bonds	Government-led investment via urban renewal special bonds, or fiscal fund + special bond combination	Dedicated funding pool, low capital cost, standardized operation	Small dedicated debt quota, limited investment intensity, low operational efficiency	Projects with stable profitability capable of covering special debt principal and interest, achieving fund self-balance
Government-authorized state-owned enterprises	SOEs as implementation entities, raising funds via bond issuance, matching financing, bank loans, special loans, etc.	Leverage SOEs’ resource and financing advantages, integrate multi-dimensional renewal benefits, withstand long investment return cycles	Long revenue payback period, financing constraints under national investment and financing policy adjustments	Government-planned projects with stable operating income and long investment return period

,

Table 8. Implementation Methods, Advantages, Disadvantages and Application Scenarios of Market-participated Urban Renewal Financing Models.

Specific Types	Implementation Methods	Advantages	Disadvantages	Applications
PPP model	Government attracts social capital to co-found project company, responsible for full-lifecycle investment, construction and operation	Improve renewal efficiency	Limited by 10% debt red line constraint	Projects with clear boundaries, stable operational demand and mature return mechanism
		Rationalize risk-benefit sharing mechanism	Long operation cycle
		Reduce government fiscal pressure	Few projects meet PPP return requirements
Multi-stakeholder collaboration model (Local government + real estate enterprise + property owner)	Government invests in public facilities; real estate enterprises take charge of renovation and operation; property owners participate in benefit sharing	Integrate multi-resource advantages	High coordination cost across multiple stakeholders	Projects with good profitability, strong public welfare attributes and complex ownership structure
		Resolve property right disputes efficiently	Easily affected by village collective interest demands
		Improve project operational profit	/

and

Table 9. Implementation Methods, Advantages, Disadvantages and Application Scenarios of Innovative Urban Renewal Financing Models.

Specific Types	Implementation Methods	Advantages	Disadvantages	Applications
Urban Renewal Fund	Government and SOEs co-initiate dedicated fund with social capital, raising multi-channel funding for urban renewal projects	Integrate cross-stakeholder resource advantages	Mismatch between fund return requirements and urban renewal’s long payback cycle	Key promoted urban renewal projects with large capital demand and clear revenue expectation
		Diversified fundraising channels	High operational challenges in practice
		Accelerate project implementation progress	/
Investor + EPC Model	Government-affiliated SOEs, construction enterprises and professional operators co-found joint venture, responsible for full-lifecycle investment, construction and operation	Integrate engineering, operation and financing capabilities	Few projects meet required return threshold	Large-area renewal projects that require overall financial balance to ensure smooth implementation
		Support large-scale urban renewal project promotion	Heavily dependent on government subsidies, with implicit debt risk under land policy constraints

.

Generally, comprehensive improvement projects with strong public welfare attributes and relatively low capital demands are primarily government-led. As shown in Table 7, investment and financing models for such projects include direct government investment, special government debt investments, and investment through government-authorized state-owned enterprises. The main funding sources consist of financial appropriations and special urban renewal bonds [41].

As shown in Table 8, for projects with high public welfare requirements and complex planning adjustments, a cooperation model between the government and social capital is most suitable. This model typically includes arrangements such as Public–Private Partnerships (PPP) or collaborations involving local governments, authorized state-owned enterprises, real estate developers, and village collectives. Demolition, reconstruction, and organic renewal projects generally entail substantial funding needs. For such projects, implementation is typically carried out through a combination of government participation and social capital investment or through purely market-driven operations.

As shown in Table 9, for projects characterized by strong operational capacity and clear profit-return mechanisms, adopting innovative exploratory financing models is more appropriate to lead project implementation and ensure sustainable outcomes.

5. Analysis of Problems in the Process of Urban Renewal in China

Urban renewal, both in China and globally, has evolved through extensive exploration and practice, accompanied by the gradual development of policies, institutional frameworks, and implementation models. Yet, it remains a complex and challenging process, often fraught with contradictions and difficulties. Beyond redefining urban functions, renewal reshapes development dynamics, emphasizing resource efficiency and the revitalization of aging urban spaces. It presents both opportunities and challenges—enhancing urban functionality while enabling the emergence of new spatial forms. The ultimate goal is to create cities that surpass their former states, not only economically but also culturally, by fostering new industries while preserving historical identity. Achieving this requires breaking path dependencies, identifying systemic bottlenecks, and implementing targeted reforms to improve the efficiency and quality of urban renewal. Based on first-tier city cases in China, several key issues can be identified in current practices.

5.1. Early-Stage Practice and Policy Deficiencies

Drawing on international experiences, institutional innovation plays a pivotal role in shaping the mode, pace, and quality of urban renewal. Since the 1950s, countries such as the United States, Germany, the United Kingdom, and Japan have developed comprehensive urban renewal systems that integrate social, economic, and cultural dimensions. National-level policies in these countries effectively guide local implementation and ensure sustainable transformation. In contrast, China lacks a unified legal framework for urban renewal at the national level. However, with “urban renewal action” included for the first time in the 14th Five-Year Plan, central ministries have issued a series of policy documents. For example, in August 2021, the Ministry of Housing and Urban–Rural Development released a directive to curb large-scale demolition, proposing the “four controls” (population, land, buildings, function) and “three reservations” (historic culture, urban fabric, community structure). In November 2021, the Ministry launched the first batch of pilot cities through the “2255” guideline, and in 2022, it released a list of best practices emphasizing coordination mechanisms, government–market–public cooperation, and policy innovation. Yet, most of these are high-level guiding documents, lacking detailed implementation rules and operational guidance. Top-down institutional design remains incomplete and difficult to translate into effective practice. At the local level, cities like Shenzhen, Shanghai, and Beijing have issued formal urban renewal regulations, providing stronger legal support. Nevertheless, local institutional innovation still faces challenges. Incomplete policy systems and insufficient guidance often hinder project execution and increase implementation difficulty. The lack of national unified land-related system design has led to inconsistent standards for land value capture, plot ratio transfer, and historical land use right confirmation, which is the core institutional obstacle to land value revitalization.

5.2. Government Dominance and Weak Multi-Stakeholder Coordination

China’s urban renewal is gradually shifting from a purely government-led approach toward more inclusive governance. The Guiding Opinions on Comprehensively Promoting the Transformation of Old Urban Districts emphasized voluntary participation and multi-actor collaboration. However, due to the complex distribution of interests, effective coordination among governments, developers, and residents remains limited. In practice, many cities have begun experimenting with governance models that combine government leadership, market mechanisms, and public participation. Successful renewal projects typically involve three core actors: the management body (government), the implementation body (developers), and the rights holders (residents or collectives). Yet, each group pursues distinct interests—fiscal gains for the government, profit for developers, and better living conditions or asset appreciation for residents—making consensus-building challenging [42,43]. Moreover, non-government stakeholders face unclear roles and lack effective channels for participation [44,45]. Community organizations, investors, and residents are often sidelined, and grassroots governance mechanisms are weakly integrated into formal renewal processes. As a result, renewal projects struggle to address broader social needs and fail to fully unleash the potential of spatial revitalization. Although multi-stakeholder models involving government, market actors, and the public have been proposed, their implementation remains limited and largely underdeveloped. The inconsistent interest demands of all parties have essentially become a contradiction in the distribution of land value increment, and the lack of a multi-stakeholder benefit sharing mechanism has seriously restricted the efficiency of land value revitalization.

5.3. Financial Imbalance in Complex Urban Renewal Projects

Urban renewal, as a highly systematic undertaking, involves more stakeholders, longer construction cycles, uncertain returns, and greater complexity than traditional new construction projects. Among the key constraints, funding has long been the most critical challenge. Demolition and reconstruction projects, in particular, entail substantial development volumes, with the largest upfront cost typically being demolition and relocation. According to current national policies, financing must consider local government debt limits, regulatory constraints on real estate enterprises, and fiscal pressure on state-owned and central enterprises. These overlapping factors impose strict limitations on project implementation. Moreover, urban renewal projects often possess the characteristics of public or quasi-public goods, which reduces their financial returns. Under current regulations, such projects typically generate fixed rather than market-based profits. Consequently, financing difficulties and extended development cycles frequently result in mismatches between investment and return. In this context, sustainable urban renewal requires the establishment of diversified and stable financing mechanisms that ensure effective capital access and maintain a reasonable balance between project revenues and financial obligations. The single financing model leads to blocked land value realization paths, making it difficult to balance the long-term and short-term returns of land value revitalization.

5.4. Heavy Reliance on Government Financing

Among the common financing models for urban renewal projects in China, cases where local governments serve as the primary investors account for a substantial proportion. Regardless of whether a project adopts a government-led, market-led, or multi-party participation model, the early stages are typically constrained by limited project revenues, making financial input from governments a critical source of funding. Currently, many urban renewal projects face significant funding shortfalls. Special financial allocations from central and local governments can partially alleviate fiscal pressures and promote project advancement. However, given the large scale, technical complexity, extended timelines, and substantial capital requirements of urban renewal, public financial support often serves only a supplementary role. Moreover, operational weaknesses, high debt levels, and low credit ratings among some local government financing platforms have further restricted access to bank credit, corporate bond issuance, and special local government bonds. These challenges create a vicious cycle of financing difficulties, ultimately exacerbating fiscal burdens at the local level. In response, several cities have established special development funds to support urban renewal. Nonetheless, concerns over low returns and investment risks have led these funds to adopt a cautious approach, leaving the primary funding pressure on local government finances [46].

6. Discussion

Building on the findings presented earlier, this section moves beyond description to offer critical interpretation and comparative insights. Specifically, we (1) explain why the four first-tier cities have adopted divergent land value revitalization models by linking their endowment conditions to the three institutional logics (administrative, market, social) defined in our theoretical framework; (2) synthesize cross-model success and failure conditions to provide actionable lessons for other cities, directly addressing the financial and coordination problems raised above; and (3) compare our findings with the existing international literature to highlight theoretical contributions and contextual boundary conditions.

6.1. Root Causes of Cross-City Model Differences

The significant differences in land value revitalization models among Beijing, Shanghai, Guangzhou, and Shenzhen are not arbitrary. Drawing on our institutional logic framework, we argue that each city’s dominant logic is shaped by its unique endowment conditions, including land property rights structure, historical path dependency, and fiscal capacity. These conditions systematically constrain which stakeholder interests are prioritized and how land value increments are distributed. This analysis directly addresses the problem of government dominance and weak multi-stakeholder coordination by showing that coordination mechanisms are not absent by accident but are structured by deeper institutional logic.

Take Beijing as the first case. As the national capital, Beijing operates under strong central government oversight and symbolic-political constraints. Urban renewal here prioritizes historical-cultural preservation and public interest guarantees over market profitability. This is reflected in its regulation’s explicit exclusion of commercial residential development from the renewal scope and the heavy reliance on state-owned enterprises as implementation agents, as seen in the Hongqi Village case. Consistent with institutional theory, the formal political constraint of “capital city status” overrides economic efficiency considerations, producing a government-led, top-down planning model. In terms of value distribution, more than 30% of land value increment is channeled into public facilities, aligning with the administrative logic’s welfare orientation. This model mitigates the financial imbalance problem through direct fiscal commitment, but it also risks operational inefficiency.

Shenzhen presents a sharply different picture. The city’s rapid urbanization left a legacy of collectively owned construction land with fragmented and ambiguous property rights. Under China’s land law, collective land cannot be directly transacted on the urban market; therefore, market-driven renewal has emerged as a pragmatic solution to coordinate property rights among numerous smallholders. Shenzhen’s regulation dedicates more than one-third of its text to demolition-and-redevelopment provisions, explicitly encouraging private developers to negotiate with village collectives. From the perspective of stakeholder theory, Shenzhen’s model delegates coordination costs to market actors, who capture a substantial share of value increment—approximately 45% in cases like Liede Village—in exchange for assuming negotiation and relocation risks. This model directly addresses the problem of heavy reliance on government financing by leveraging private capital, but it also creates new problems, such as gentrification and under-provision of public goods, which explains why weak multi-stakeholder coordination is more acute in market-driven contexts.

Shanghai and Guangzhou fall between these two extremes, adopting a balanced or hybrid logic. Shanghai, with its strong fiscal base and mature planning institutions, follows a project-type differentiation approach: regional comprehensive renewal leans toward government leadership, as in the Hongqi Village case, while piecemeal commercial projects allow market participation. Guangzhou’s prolonged exposure to “three old renewals”—old towns, old factories, and old villages—has fostered a layered governance model that combines administrative guidance, such as the Liwan District BOT model for Yongqing Square, with market operations. This hybridity reflects a deliberate institutional design that tempers the limitations of pure models: administrative logic avoids gentrification and ensures public service provision, while market logic improves operational efficiency and reduces fiscal pressure. This finding suggests that the financial imbalance problem is most effectively addressed not by a single model but by context-sensitive mixing.

The theoretical implication of this cross-city variation is clear. The dominant institutional logic is not a free choice but is endogenously determined by local land property rights structures and political–administrative constraints. This refines institutional theory by specifying how macro-level endowments shape micro-level governance choices in land value revitalization. Moreover, it explains why the top-level design problem cannot be solved by a uniform national policy alone. Local adaptation is necessary and inevitable.

6.2. Applicability of Different Models and Practical Insights

Having explained why each first-tier city adopted its particular model, we now turn to a more practically oriented question: under what conditions does each model succeed or fail? Answering this question directly addresses the problems identified earlier (early-stage policy deficiencies, weak coordination, financial imbalance, and over-reliance on government funding) by showing how different models handle these challenges in context-specific ways.

Consider first the government-led model. This approach succeeds when three conditions are met: a clear public good definition (such as historical block protection or old community renovation), strong state fiscal capacity to bear upfront costs, and low fragmentation of property rights. When these conditions hold, the government-led model can deliver fast and equitable outcomes. The Hongqi Village case in Shanghai exemplifies such success: more than 30 percent of land value increment was allocated to public facilities, and the project was completed within ten months after land acquisition. However, this model also carries characteristic failure risks, including operational inefficiency, under-provision of commercial amenities, and low resident satisfaction due to top-down design. More importantly for policy learning, the government-led model directly inherits the problem of heavy reliance on government financing. It is fiscally sustainable only for wealthy municipalities; for less affluent cities, a pure government-led approach would likely exacerbate local debt pressures rather than relieve them.

The market-driven model operates under a different set of success conditions. It works best when expected profit margins are high enough to attract private developers, when property rights are clear or can be consolidated at reasonable cost, and when there is strong market demand for renewed space. The Liede Village case in Guangzhou shows how this model can achieve rapid demolition and value appreciation. But the failure risks are equally well documented: gentrification and social conflict, under-provision of public goods, and developer capture of value at the expense of residents. In the absence of strong regulatory safeguards, the problem of weak multi-stakeholder coordination becomes acute under this model, because resident bargaining power is often insufficient to ensure a fair share of value increments. That said, the market-driven model does mitigate the financial imbalance problem by shifting investment burdens to private capital—a significant advantage. However, it also introduces new governance problems that require countervailing public oversight.

The multi-stakeholder collaborative model, in turn, has its own distinctive logic. It works best under conditions of complex, heterogeneous stakeholder interests; where historical or cultural values preclude large-scale demolition; and where mediating institutions, such as neighborhood committees or digital participation platforms, exist to facilitate negotiation. The Wangjing Xiaojie case in Beijing demonstrates success: a government–Vanke–community partnership revitalized the area within three years, balancing efficiency and fairness. Yet, failure risks are also present: high coordination costs, slow project progress, and difficulty in reaching consensus. The early phase of Yongqing Square in Guangzhou suffered from prolonged negotiations precisely because roles were unclearly defined. This model directly addresses the weak coordination problem by institutionalizing stakeholder participation, but it does not automatically solve the financing problem. In many cases, it still requires government seed funding.

Synthesizing these model-specific insights, three cross-cutting conclusions emerge that directly respond to the problems raised earlier. First, there is no one-size-fits-all model. The early-stage policy deficiencies observed in many Chinese cities cannot be cured by simply copying a successful city’s regulation. Instead, each city must diagnose its own endowment conditions (i.e., property rights clarity, fiscal capacity, social cohesion) before selecting or designing its dominant institutional logic. A city with severe historical preservation needs, like Beijing, should not default to a market-driven model, while a city with highly fragmented property rights, like Shenzhen, cannot rely solely on government-led coordination. Second, hybrid models can mitigate the core trade-offs. The problems of financial imbalance and weak coordination are often two sides of the same coin. Shanghai’s project-type differentiation and Guangzhou’s layered governance show that mixing administrative and market logic at different project stages, or even within the same project, can simultaneously improve funding diversity and stakeholder inclusion. This insight is particularly relevant for third- and fourth-tier cities that lack the extreme endowments of first-tier megacities. Third, failure risks are predictable and can be managed through minimum guardrails. Each model has its characteristic failure modes, but these can be preempted by setting clear, enforceable standards. For market-driven projects, a floor for public facility investment and a resident consent threshold would address distributional concerns. For collaborative projects, establishing time limits for negotiation and clear dispute resolution mechanisms would mitigate the risk of slow progress. These guardrails do not require a full national law, which remains absent but can be incorporated into local regulations or project-level contracts.

These findings also connect directly to land value capture theory. Our analysis qualifies the universal applicability of western value capture tools. In China’s public land ownership system, the government can directly allocate value increments via planning conditions, such as plot ratio bonuses, affordable housing quotas, or public facility contribution requirements, rather than relying solely on tax-based capture mechanisms. This expands the theory’s instrument menu for transitional economies and provides a concrete way to address the blocked land value realization paths identified earlier.

6.3. Comparison with Existing Studies and Global Implications

Unlike most existing studies on China’s urban renewal, which are predominantly single-city or single-model case analyses, our study covers 21 pilot cities and four first-tier cities and systematically compares three renewal models using a unified three-dimensional framework of institutional environment, governance structure, and value distribution, allowing us to extract generalizable institutional mechanisms rather than city-specific idiosyncrasies. Compared with western experiences, China’s public land ownership system creates a distinct institutional setting for land value revitalization. In the United States and many European countries, land value capture relies heavily on tax instruments such as property tax increments or special assessment districts because land is predominantly privately owned, forcing governments to negotiate with multiple private landowners; in contrast, under China’s system, local governments retain ultimate ownership of urban land and can condition land transfer agreements on specific public benefit provisions, including mandatory affordable housing quotas, public facility construction, or plot ratio bonuses tied to value sharing. This direct regulatory capture mechanism is less transparent than tax-based systems but can be more efficient in rapidly reconfiguring land value distributions, offering a reference point for other developing countries with state-owned or hybrid land systems. At the same time, our analysis reveals that the strong reliance on administrative logic in Beijing and on market logic in Shenzhen both produce specific pathologies, potential inefficiency and potential inequity, suggesting that institutional pluralism, which maintains multiple logics and allows context-sensitive mixing, is a more robust strategy than pursuing any single best practice. For global audiences, the key takeaway is not to copy China’s specific policies but to understand how endowment conditions (i.e., land rights structure, fiscal capacity, and political constraints) shape the feasibility and performance of different value capture instruments. Finally, the absence of a unified national legal framework, while a weakness in terms of consistency, also serves as a source of local experimentation, allowing cities to tailor models to local endowments. This is a lesson from which overly centralized systems might learn, and empirical evidence for the value of controlled local discretion in land value revitalization.

7. Conclusions and Policy Recommendations

7.1. Research Findings

Urban renewal, as a mechanism of urban self-regulation, has always played a critical role in the process of urban development. Its primary purpose is to prevent urban decline and enhance overall city functions through continuous structural and functional adjustments, enabling cities to meet future development needs and eventually achieve a new dynamic equilibrium. This study first compares the regional distribution and policy issuance patterns of the 21 pilot cities for urban renewal in China. It then analyzes the specific contents and landmark cases associated with urban renewal regulations in first-tier cities. Based on this analysis, several key challenges in China’s current urban renewal process are identified. (1) Urban renewal remains in the exploratory stage in most regions, with a limited number of relevant policies and regulations introduced, and the content of existing policies requiring further refinement. (2) The main body of urban renewal is still dominated by governmental coordination, with a lack of synergistic mechanisms involving multiple stakeholders. (3) Urban renewal projects typically have long and complex cycles, making it difficult to balance revenues and investment returns. (4) Financing models for urban renewal remain relatively singular, with project funding heavily reliant on public finance. In response to these challenges, this study proposes a series of targeted policy recommendations aimed at supporting the high-quality and sustainable development of urban renewal in China. Meanwhile, this analysis of land value revitalization paths in China’s urban renewal also provides a reference for the governance of land system transformation in other rapidly urbanizing regions.

7.2. Policy Recommendations

7.2.1. Strengthening Top-Level Institutional Design

Urban renewal requires the constraints of a comprehensive planning framework to ensure orderly, high-quality, and efficient development. It is therefore essential to accelerate the improvement of urban renewal laws and regulations: it is recommended that all provincial-level administrative regions complete the formulation of local urban renewal regulations within 2 years, integrating renewal-related provisions into the existing legal system. At the same time, the public interest orientation of urban renewal should be clearly defined, with a negative list of non-public interest renewal scenarios (e.g., pure commercial real estate development projects are not included in the public interest category) and standardized public interest determination procedures to better balance public welfare and the protection of individual rights. Additionally, challenges in urban renewal planning and management can be addressed through the formulation of specialized renewal plans under the broader territorial spatial planning system, with clear rigid control indicators: the proportion of public service facilities in the renewal unit should not be less than 15% of the total construction area.

7.2.2. Building a Diversified Cooperation System

Urban renewal extends beyond the physical transformation of the built environment, and it also involves the renewal of ecological, cultural, industrial, and functional systems. As a complex urban issue, it necessitates the government’s role as guide, coordinator, and regulator, while actively promoting multi-stakeholder participation. It is recommended to establish regional-level urban renewal coordination bodies, with the composition including representatives from natural resources, housing construction, civil affairs departments, community residents (accounting for no less than 20% of the members) and third-party experts, to define cross-sectoral collaboration mechanisms and improve coordination efficiency. A public participation digital platform should also be created, covering functions such as project publicity, opinion collection and benefit distribution hearing, to expand channels for community engagement and foster a governance mechanism characterized by government leadership, public participation, and democratic consultation. Furthermore, attention must be given to achieving full coverage of education, healthcare, elderly care, and other essential services in renewal areas (15-min living circle coverage rate reaches 100%), and set a mandatory bottom line that the proportion of residents’ value increment distribution is no less than 30%, promoting the equalization of public services and ensuring that all participants benefit from urban renewal initiatives.

7.2.3. Innovating Financing Models for Urban Renewal

Given the capital-intensive and long-term nature of urban renewal, relying solely on fiscal resources is unsustainable. It is crucial to attract diverse forms of social capital through financial leveraging, tax incentives, reasonable subsidies, and flexible use of plot ratio incentives: for public welfare-oriented renewal projects (old community renovation, historical block protection), the fiscal subsidy ratio is not less than 30% of the total investment, and the maximum plot ratio incentive can be floated by 20%. Governments should provide systematic policy and funding support to stimulate market enthusiasm and develop new financing tools tailored to the characteristics of organic renewal, such as urban renewal special REITs (access threshold: project operation for more than 3 years, stable cash flow) and asset securitization mechanisms, drawing on the successful experience of Shenzhen and Guangzhou. Enhancing policy-based lending, guarantee mechanisms, and encouraging syndicate financing can further facilitate bank loans for urban renewal projects via financial guaranteed institutions, with the loan interest rate 10–20 basis points lower than the LPR (loan prime rate) of the corresponding period for qualified projects.

7.2.4. Developing a Scientific and Comprehensive Evaluation System

Organic urban renewal encompasses improvements in spatial structure, green and low-carbon development, cultural preservation, and urban governance. Establishing a scientific evaluation system is crucial for promoting standardized, systematic, and sustainable urban renewal practices. Specifically, a multi-dimensional evaluation index system with weight setting should be established: public service improvement accounts for 30%, green low-carbon development accounts for 25%, historical landscape protection accounts for 20%, and economic benefit accounts for 25%. A comprehensive assessment of renewal units’ carrying capacities should be conducted prior to project implementation, with a one-veto system for core indicators: if the resident consent rate is lower than 90% or the risk of historical building damage exceeds the threshold, the project shall not be approved, to guide effective planning and execution.

7.2.5. Applying Intelligent Technologies to Drive Integrated Development

With the rapid advancement of technologies such as AI, 5G, and new energy solutions, the integration of new materials and digital tools into urban renewal has become increasingly feasible [47]. These technologies not only address persistent “urban diseases” but also promote the development of eco-friendly, green, low-carbon, safe, and resilient urban environments. In the renewal process, it is recommended to build a city information model (CIM) platform for urban renewal to realize dynamic management of the whole life cycle of the project, and actively encourage the application of digitalization, intelligent management systems, and green construction technologies: the prefabricated building proportion of newly built parts in the renewal project shall not be less than 80%, and the photovoltaic coverage rate shall not be less than 50% of the roof area, to enhance project information management and reduce carbon emissions. Intelligent technologies and refined governance tools can significantly improve the quality of urban living and facilitate the demonstration of green, low-carbon, safe, and resilient cities, ultimately advancing the quality and efficiency of urban management and sustainable development.

7.3. Limitations and Future Research

This study still has some limitations: First, the research samples are mainly first-tier cities and national pilot cities, and the coverage of third- and fourth-tier cities is insufficient, so the universality of the conclusions for small and medium-sized cities needs to be further verified. Second, this study is a qualitative study based on policy documents and case analysis, and lacks quantitative empirical analysis of the impact effect of land value revitalization policies.

Future research can be carried out from two aspects: First, expand the research sample to include third- and fourth-tier cities to further verify the applicability of the conclusions. Second, use econometric models to quantitatively evaluate the implementation effect of land value revitalization policies, so as to provide more accurate empirical support for policy formulation.