An Analysis of Transaction Costs Involved in the Urban Village Redevelopment Process in China
Abstract
:1. Introduction
2. Literature Review
3. Transaction Characteristics of UVRPs in China
4. Research Methodology
4.1. Analytical Framework
4.2. Data Collection
5. Results
5.1. Inception and Planning
5.1.1. Project Application
‘The city planning department sometimes rejects the planning scheme submitted by the district government or puts forward some requirements to revise the scheme to coordinate with other city projects.’
5.1.2. Site Selection
‘Following the achievement of a consent rate of around 95% or two-thirds of villagers, a UVRP can be officially initiated.’
5.1.3. Requisition Schemes
5.2. Predemolition
5.2.1. Announcement
5.2.2. Measurement and Evaluation
‘The local government sometimes searches for information regarding the householders’ relatives to find whether any of them has worked in the relevant government department or state-owned enterprise under the top-down institutional arrangement. If so, these relatives are also required to join the team to persuade the householders to sign the contract.’
5.2.3. Contracting
‘Some villagers grasp this chance to bargain for more benefits from the redevelopment process; this may be their last chance in their life.’
5.2.4. Moving Out
‘It is hard for the elderly villagers to rent a house as landlords are afraid that the elderly villagers would die in their house.’
5.3. Post Demolition
5.3.1. Demolition
‘…the local government published an announcement stipulating that the “illegal buildings” will be forced demolished after ten days. But some migrants did business on the ground floor and did not find appropriate housing in such a short period. When the deadline came, the renters still had not moved out and the government forces demolished those houses without moving their personal belongings out. The disputes, therefore, arose. Renters said there was this [gold necklaces] or that [cash], but there was no evidence to prove because everything had been buried. If they told me there were 1 million cash dollars in their room, should I compensate 1 million for them? Such a dilemma was caused by the government…’
‘The local government will leave the last “nail householders” there if continuous negotiations fail in most practices. When new land-use planning for public projects is established, the local government will forcibly demolish their houses legally.’
5.3.2. Construction
‘…there are still around 40 households that have not been relocated, which is the fault of the private developer, Baoli. We do not know why there were not enough apartments to relocate all the households. It can obviously increase the size of transaction costs at the stage of relocation…’
5.3.3. Relocation
‘Some unruly villagers do not obey the rules articulated in the policy. They even refuse to move in even if we clearly announce the relocation principle at the beginning.’
‘We have no money…but I have no money to buy the “supportive area”. The purchase price is CNY 5000/m2. Our self-built house occupies a 170 m2 building plot. This site has one floor and another has two floors. According to the compensation policy, the relocation area allocated to us is 510 m2 [170 × 3 = 510] and the shared area (gongtan mianji) is equal to 127.5 m2 [510 × 0.25 = 127.5] with different amounts of construction costs. This means I need to provide around CNY 3 million to purchase the exchange area. Please tell me how I could provide such a sum of money…?’
6. Discussions and Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Acknowledgments
Conflicts of Interest
Appendix A
City | Organisations/Villages | Date |
---|---|---|
Hangzhou | Demolition headquarters for JJB village | 2017/9/14 |
Hangzhou city construction committee | 2017/9/5 | |
Hangzhou city land resource bureau | 2017/7/31 | |
2017/9/26 | ||
Shangcheng district construction bureau | 2017/9/18 | |
Shangcheng district land resources bureau | 2017/9/27 | |
Ningbo | Dandong sub-district government | 2017/11/17 |
Danxi sub-district government | 2017/11/18 | |
Dongjiao sub-district government | 2017/11/15 | |
DT village | 2017/11/9 | |
Duantang sub-district government | 2017/11/9 | |
Haishu district old village redevelopment office | 2017/11/14 | |
HJT village | 2017/11/18 | |
Jiangbei district urban village redevelopment office | 2017/11/15 | |
Ningbo city land resource bureau | 2017/11/13 | |
Shiqi sub-district government | 2017/11/8 | |
Xiangshan district construction bureau | 2017/11/18 | |
Xiangshan housing expropriation office | 2017/11/17 | |
Taizhou | High-speed railway demolition headquarters | 2017/10/26 |
Hongjia sub-district government | 2017/10/26 | |
Luqiao district land resource bureau | 2017/10/20 | |
Luqiao district urban village redevelopment office | 2017/10/20 | |
Luqiao sub-district government | 2017/10/23 | |
Shuicheng demolition headquarters | 2017/10/25 | |
Taizhou city construction committee | 2017/10/11 | |
Taizhou city land resource bureau | 2017/10/11 | |
WLP village | 2017/10/17 | |
Xinqian sub-district government | 2017/10/19 | |
Wenzhou | DLX village | 2017/7/18 2017/7/25 |
Wenzhou city construction committee | 2017/10/27 | |
Wenzhou city land resource bureau | 2017/10/27 | |
Yiwu | Futian sub-district government | 2017/11/1 |
Houzhai sub-district government | 2017/11/2 | |
LXT village | 2017/10/28 2017/11/5 | |
Suxi township government | 2017/11/3 | |
XXYX new community | 2017/11/2 2017/11/4 | |
City land resource bureau | 2017/10/30 2017/11/6 | |
Community construction office | 2017/10/31 2017/11/3 | |
Three redevelopments and one demolition office | 2017/10/31 | |
Beijing | Beijing city planning and land resources committee | 2017/11/27 |
DWY village | 2017/11/27 | |
Fengtai district construction committee | 2017/11/21 | |
Lugouqiao township government | 2017/11/22 | |
Tongzhou district land resource bureau | 2017/11/24 | |
YGZ village | 2017/11/26 | |
Guangzhou | Liede sub-district government | 2017/5/26 |
MG village | 2017/5/22 | |
PZ village | 2017/5/11 | |
XC village | 2017/5/3 |
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Specific Stage | Activity | Involved Parties | Transaction Costs |
---|---|---|---|
Project application | Legal designation of land use, planning permission | Different departments of government at various levels, including planning department, construction department and land resource bureau | Costs of continued negotiations, rejection or revision of land use planning and site selection; long-term approval process; information requisition |
Site selection | Name, number and area of urban village determination; pre-investigation of the consent rate of affected villagers | Government officials from the city, district (country) and sub-district levels; VCs/ Village collective economic organisation (VCEO) | Costs of information requisition and negotiation |
Requisition schemes | Compensation and relocation policies, rewarding policies | Top-down: land resource bureau, construction department or urban village redevelopment office; Bottom-up: VCs/VCEO | Costs of creating policies, information requisition, continued negotiation and revision |
Announcement | Mobilization meeting; announcement of selected evaluation companies; provision of redevelopment information to affected villagers, including compensation and relocation policies; measurement date, contracting date and moving out date | Local governments, VCs/VCEO, ordinary villagers | Costs of information requisition and negotiations with affected householders; conflicts of interest lead to the revision of the associated policies |
Measurement and evaluation | Measuring the size and area of the original self-built houses, evaluating the value of the original self-built houses, determining the allocated area | Local government, VCs/VCEO, ordinary villagers, evaluation company | Costs of measuring and evaluation, information requisition and negotiation, conflict resolution |
Contracting | The local government (top-down) or VCs/VCEO (bottom-up) establishes a contract with the affected householders | Local governments, VCs/VCEO, ordinary villagers | Costs of making the contract, conflict resolution, signing the contract (e.g., time, human resources) |
Moving out | The villagers who signed the contract need to move out of their houses on the given date | VCs/VCEO, ordinary villagers, local government | Costs of conflict resolution, holdout problems (e.g., time, human resources) |
Demolition | The government or VCs/VCEO select the demolition companies on the open market; demolition of the original self-built houses | Local government or VCs/VCEO, demolition companies | Costs of finding appropriate companies, conflict resolution, holdout problems |
Construction | The government or VCs/VCEO select the construction companies or private developers on the open market; construction of RHB for resettlement and temporary relocation housing for the elderly according to the consensus contract | Local governments, VCs/VCEO, construction companies, or private developers | Costs of finding appropriate companies; continued negotiation with the affected householders about plot ratio, floor plans and greening rate of RHB. The costs may occur before signing the contract in some cases because the villagers want to decrease uncertainty |
Relocation | Relocating affected villagers based on the relocation policies, e.g., drawing lots irrelevant to contracting date, drawing lots relevant to contracting date, selection fees | Local governments, VCs/VCEO, ordinary villagers | Costs of conflict resolution about the floor plan, stories and the location of the housing or apartment. In some cases, the relocation stage is prior to the construction stage |
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Yuan, D.; Yau, Y.; Lin, W.; Cheng, J. An Analysis of Transaction Costs Involved in the Urban Village Redevelopment Process in China. Buildings 2022, 12, 692. https://doi.org/10.3390/buildings12050692
Yuan D, Yau Y, Lin W, Cheng J. An Analysis of Transaction Costs Involved in the Urban Village Redevelopment Process in China. Buildings. 2022; 12(5):692. https://doi.org/10.3390/buildings12050692
Chicago/Turabian StyleYuan, Dinghuan, Yung Yau, Wenyi Lin, and Jianxin Cheng. 2022. "An Analysis of Transaction Costs Involved in the Urban Village Redevelopment Process in China" Buildings 12, no. 5: 692. https://doi.org/10.3390/buildings12050692