Page 9 - SCBJ-201612
P. 9
November 2016
Local incentives However, research has shown that
Most local governments across state-level fiscal measures and local
China have separate preferential
policies that can stack on top of level regulations can help make green
the country’s national incentives,
expediting the investment process and increasing the investment affordable housing viable. China has
returns for foreign companies. Western China, for example,
offers a reduced CIT rate of 15 percent for companies that build both of these in place with its extensive
green housing in the region, while Shanxi province provides
a streamlined application process and additional subsidies of Photo from bing.com incentive framework, making green
between RMB 10 and 20 per sq. m, depending on the rating housing construction comparable
attained.
to, and potentially even cheaper than, conventional housing.
Similar incentives exist across a range of first to third-tier cities
in the country. Many of these cities have separate green building Moreover, the costs associated with green construction are now
targets in place, funds to encourage the investment that is required
to meet these targets, and even form a link between the dual significantly less than in the past, with experienced constructors
needs for green buildings and affordable housing. In Dongguan
in Guangdong province, for instance, an RMB 10 million (US$ 1.5 able to build housing at a roughly equivalent price to conventional
million) special fund has been set up to support green building
projects, while Heze in Shandong province mandates that 30,000 homes.
sq. m of new construction in each of its counties be green and that
this should partly be used to provide affordable housing. Green affordable housing is therefore not only possible in the
Chinese market, but potentially profitable for foreign investors,
and the need for this type of housing is set to only grow in the
future. In addition to China’s ambitious target that green
buildings comprise 50 percent of new construction by 2020 are
the general sustainability goals laid out in its 13th Five Year Plan,
which stipulates that clean energy form 20 percent of China’s
energy mix before 2030. In order for China to both meet these
targets and effectively house its urbanizing population, green and
affordable housing will have to be at the forefront of construction
in the mid to long-term future.
Viability of green affordable housing
and future outlook
The chief concern with green affordable housing in China is
the comparatively higher upfront cost. Green buildings require
high-tech applications that are typically more expensive than
traditional building materials. In order for such buildings to be
constructed and still have a scalable impact on China’s housing
supply problems, they will have to by necessity be low-cost.
7
Local incentives However, research has shown that
Most local governments across state-level fiscal measures and local
China have separate preferential
policies that can stack on top of level regulations can help make green
the country’s national incentives,
expediting the investment process and increasing the investment affordable housing viable. China has
returns for foreign companies. Western China, for example,
offers a reduced CIT rate of 15 percent for companies that build both of these in place with its extensive
green housing in the region, while Shanxi province provides
a streamlined application process and additional subsidies of Photo from bing.com incentive framework, making green
between RMB 10 and 20 per sq. m, depending on the rating housing construction comparable
attained.
to, and potentially even cheaper than, conventional housing.
Similar incentives exist across a range of first to third-tier cities
in the country. Many of these cities have separate green building Moreover, the costs associated with green construction are now
targets in place, funds to encourage the investment that is required
to meet these targets, and even form a link between the dual significantly less than in the past, with experienced constructors
needs for green buildings and affordable housing. In Dongguan
in Guangdong province, for instance, an RMB 10 million (US$ 1.5 able to build housing at a roughly equivalent price to conventional
million) special fund has been set up to support green building
projects, while Heze in Shandong province mandates that 30,000 homes.
sq. m of new construction in each of its counties be green and that
this should partly be used to provide affordable housing. Green affordable housing is therefore not only possible in the
Chinese market, but potentially profitable for foreign investors,
and the need for this type of housing is set to only grow in the
future. In addition to China’s ambitious target that green
buildings comprise 50 percent of new construction by 2020 are
the general sustainability goals laid out in its 13th Five Year Plan,
which stipulates that clean energy form 20 percent of China’s
energy mix before 2030. In order for China to both meet these
targets and effectively house its urbanizing population, green and
affordable housing will have to be at the forefront of construction
in the mid to long-term future.
Viability of green affordable housing
and future outlook
The chief concern with green affordable housing in China is
the comparatively higher upfront cost. Green buildings require
high-tech applications that are typically more expensive than
traditional building materials. In order for such buildings to be
constructed and still have a scalable impact on China’s housing
supply problems, they will have to by necessity be low-cost.
7
