Ban imposed on land for luxury housing

PUBLISHED : Thursday, 01 June, 2006, 12:00am
UPDATED : Thursday, 01 June, 2006, 12:00am

Ministry says priority should be given to building low-cost and affordable homes

The Ministry of Land and Resources yesterday ordered an immediate ban on the approval of land for the building of villas and low-density luxury housing.

'All localities must strictly control land supply for the building of low-density, big residential projects,' a ministry circular said. 'We must resolutely stop the supply of land for the development of villa-type housing projects.

'Effective from today, all localities must stop the approval procedures of land and other related applications for such projects, and a rectification will be carried out.'

The circular came just days after the State Council issued measures aimed at boosting the supply of affordable housing and curbing soaring property prices.

In addition to the ban on land for villas, the new directive orders local governments to strictly follow approved land-use programmes and impose tighter restrictions on the conversion of farmland for development.

It is aimed at closing loopholes which allowed local governments to acquire rural land using future quotas and stock up on land in order to shop around for developers who could offer higher prices.

The circular said local authorities must follow strict approval procedures in acquiring land for public infrastructure projects such as highways, power plants and military facilities.

It added that in special situations the authorities would be required to hold public hearings before they could proceed with land acquisitions. Local governments would also be required to amend development plans if evictions triggered mass protests.

Beijing has issued similar edicts before, but local governments often ignored them, claiming there was not a clear definition of a villa. However, the Ministry of Land and Resources said in April it would come up with clearer guidelines to dispel any confusion.

Vice-Minister of Land and Resources Wang Shiyuan said the latest circular was aimed at implementing orders by the State Council to stem the excessive growth of fixed-asset investment and halt contentious land grabs by local authorities.

Mr Wang stressed land sales must be conducted through auctions and public tenders, and priority should be given to the building of low-cost and affordable housing.

Shu Kexin, a ministry deputy department head, rejected claims that competition among developers at land auctions was the main factor behind soaring property prices.

Fu Ying , a law and regulation research director of a ministry research institute, said local officials often circumvented land acquisition regulations and stocked up on more land than allowed under annual land programmes.