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It is difficult to repair residential elevators, it is difficult to withdraw maintenance funds, and old and dilapidated houses pose great safety hazards... As my country's housing market has entered the era of stock from the era of growth, residents' housing demand has changed from "whether or not" to "living well", and the importance of housing quality and safety issues has begun to emerge.

Recently, Dong Jianguo, Vice Minister of the Ministry of Housing and Urban-Rural Development, stated at a press conference held by the State Council Information Office that it is necessary to study and establish three systems, namely housing physical examination, housing pension and housing insurance, to build a long-term mechanism for housing safety management throughout the entire life cycle. Shanghai and 22 other cities are currently carrying out pilot projects.

Will housing also be used for "aging care" in the future? How will it be done, where will the money come from, and what impact will it have on the owners? These questions have attracted widespread attention.

In fact, my country currently has an existing "special housing maintenance fund" system for the maintenance and renovation of public parts and facilities of houses. This special fund has been established since the reform of commercial housing, and owners have paid it when purchasing houses. However, the current special housing maintenance fund has many pain points: small amount of funds, cumbersome withdrawal procedures, and difficult implementation of the renewal payment system. Housing safety issues urgently need to make up for the shortcomings.

The housing pension mentioned in the current policy is to provide a "bottom line" for public safety. The industry said that the current construction focus is on the pension "public account", which comes from public funds and is explored by local governments; the part of the housing pension related to individuals, that is, the current housing special maintenance funds, will not increase the additional burden on the owners.

"The source of funds for public accounts is a focus of attention from all walks of life. Setting aside a certain proportion of project land transfer fees, the added value of maintenance funds, fiscal subsidies, and creating supporting financial products may be important directions for exploration," said Chen Wenjing, director of market research at China Index Academy.

22 cities are carrying out pilot projects

"Say goodbye to the large-scale new construction of the past few decades. Houses are like living organisms entering middle age. They have also entered an era that requires physical examinations, retirement care, and increasing pensions through insurance." Li Yujia, chief researcher at the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, said.

Recently, "housing pension" has become a hot word. Dong Jianguo, vice minister of the Ministry of Housing and Urban-Rural Development, recently said that it is necessary to study and establish three systems: housing physical examination, housing pension, and housing insurance, to build a long-term mechanism for housing safety management throughout the life cycle.

On August 20, Shanghai Mayor Gong Zheng also said on housing safety management that by the end of 2023, the existing urban housing construction area in Shanghai will exceed 760 million square meters, and a large number of houses will begin to enter the "middle-aged and elderly" period. Shanghai will explore and implement three systems. The first is the regular housing physical examination system, the second is the housing safety insurance system, and the third is the housing pension system. This year, the pilot will be carried out in Pudong and other districts, and will be rolled out throughout the city next year.

Do you need to have a physical examination, pension, and insurance for housing? There was a lot of discussion in all walks of life, and netizens even worried about whether they would have to "pay more money" in the future.

In fact, the concept of housing pension system did not appear this year. It has frequently appeared in official documents, meetings and speeches since 2022. Since 2023, the Ministry of Housing and Urban-Rural Development has publicly stated many times that it will study the establishment of a housing pension system.

In June 2023, Ni Hong, Secretary of the Party Committee and Minister of the Ministry of Housing and Urban-Rural Development, published a signed article proposing that housing development has shifted from a total shortage to a structural supply shortage, and has entered a development period of structural optimization and quality improvement. Urban development has shifted from large-scale incremental construction to a focus on both stock quality improvement and incremental structural adjustment, and has entered an important period of urban renewal. It is necessary to study and establish three systems of housing physical examinations, pensions, and insurance to provide housing with full life cycle safety protection and make people's living lives more comfortable and beautiful.

Various regions have also begun to explore the housing pension system. For example, at the beginning of the year, the Housing and Urban-Rural Development Department of Qinghai Province issued a document to encourage various regions to carry out pilot projects of housing physical examination, pension and insurance in urban affordable housing projects such as public rental housing, affordable rental housing, and renovation of old urban communities. Yantai, Jining, Qingdao and other cities in Shandong Province are also exploring the above system.

According to information from the Ministry of Housing and Urban-Rural Development, 22 cities including Shanghai are currently carrying out pilot projects related to housing pensions.

The establishment of housing pension and other systems is necessary. Li Yujia said that in the past, we paid too much attention to the construction of new houses, especially to the needs of living space and whether there are houses. We did not pay enough attention to timely filling the gaps in housing supporting facilities and solving safety hazards. After many cities entered the stage of high urbanization, some shortcomings and loopholes urgently need to be filled.

"Like middle-aged and elderly people, they need to have a physical examination first to find out the problems and make up for what they lack. However, the funds mainly relying on property maintenance funds are difficult to cope with the pension needs when the houses enter the middle-aged and elderly stages and the aging stage. Therefore, there is an urgent need to coordinate the construction of institutional arrangements and mechanisms for the sources of funds needed for housing pensions." Li Yujia said.

To ensure housing safety

In fact, my country already has an inherent "fund pool" for the maintenance, renovation and reconstruction of houses - a special housing maintenance fund.

According to the Ministry of Housing and Urban-Rural Development's "Management Measures for Special Housing Maintenance Funds", special housing maintenance funds are funds used specifically for the maintenance, renewal and renovation of common parts of houses and common facilities and equipment after the warranty period expires. This fund is usually paid when residents purchase a house. Since 2004, special housing maintenance funds have become a fee that must be paid when applying for a property ownership certificate.

A report from the Shanghai Real Estate Science Research Institute pointed out that currently, the national special maintenance fund surplus exceeds 1 trillion yuan, and cities such as Shanghai, Beijing, and Hangzhou have surpluses exceeding 10 billion yuan. According to the Property Law and the Civil Code, the special maintenance fund for residential communities belongs to the owners and should be managed by the owners' committee, but the situation varies from community to community, and is currently basically "managed on behalf of" by government departments.

Why do we need to explore new housing inspection, pension and insurance systems when we already have a special housing maintenance fund system?

Huachuang Securities once published a research report stating that, on the one hand, the volume of old houses in some areas is large, but the volume of special residential maintenance funds is small, which makes it difficult to meet the demand for house maintenance. Taking Nanjing as an example, among the houses in Nanjing that have been built and put into use for more than 15 years, the number and area of ​​residential houses account for 42.15% and 36.52% of the total, respectively. However, about 30% of the houses have not collected maintenance funds for various reasons. Even for the old communities that have collected maintenance funds and currently have surpluses, 28% of the communities have a balance of less than 100,000 yuan.

On the other hand, due to factors such as the cumbersome application procedures, the current withdrawal rate of special residential maintenance funds is low. By the end of 2022, the withdrawal rate of special residential maintenance funds in Beijing was less than 10%; at the end of 2019, the withdrawal rate in Shandong was only 3.3%.

In addition, the "housing reform houses" and some commercial housing in 2004 did not pay special residential maintenance funds; the commercial housing and affordable housing around 2004 had a low price, so the base for special residential maintenance funds was low, and some communities had low balances, making it difficult to raise funds.

Therefore, the establishment of a housing pension system is intended to fill the gaps in the above-mentioned issues and provide an institutional guarantee to ensure housing safety.

Yu Xiaofen, director of the China Housing and Real Estate Research Institute of Zhejiang University of Technology, said that although my country has established a system for home buyers to pay a housing maintenance fund at 5-8% of the construction cost, and it has played an important role in ensuring the daily maintenance of public areas in communities and the renewal of facilities such as elevators, the number is very limited and it is difficult to meet the needs of safe maintenance of urban houses and renewal of old communities.

"In recent years, governments at all levels have been actively exploring the establishment of housing pensions. City governments have collected funds through multiple channels, such as local financial subsidies, land transfer fees, housing provident fund appreciation income, and funds from the sale of original public housing, to explore the establishment of a stable funding pool that can be used for safety inspections, safety management, and maintenance and renewal subsidies for existing housing." Yu Xiaofen said.

Tang Xiaochen, founder of Jianran Consulting and chief researcher of Jianran Research Institute, told Caixin that in recent years, accidents caused by problems with housing construction have occurred in many places. At present, the number of existing houses in urban areas has reached a high level, and a large number of existing houses are facing problems such as structural safety and aging facilities and equipment. The starting point for establishing a housing pension system is to respond to the trend of housing aging, improve living quality and safety, and establish a long-term mechanism.

Public accounts will not cause personal burden

As mentioned above, the biggest problem with current housing maintenance and safety management is “not enough money.” From physical inspections of old houses to repairs after problems arise, the existing funding pool cannot meet the growing demand for safety management, and the housing maintenance fund system needs to be upgraded.

In the industry's view, the source of funds for housing "pension" in the future will have "three pillars". "Just as the personal pension system is composed of 'three pillars', personal and public accounts, the housing pension system should also be composed of several pillars." Li Yujia said.

The first pillar is the special maintenance fund, which is collected and jointly owned by all owners when they buy new houses and goes into personal accounts. The second pillar is the public account, such as a certain proportion of land transfer fees, financial rewards and subsidies, public maintenance fund appreciation income, provident fund appreciation income, etc. The third pillar is commercial housing pension, including comprehensive housing safety insurance and commercial housing pension supplement.

Yin Fei, professor and dean of the School of Law at the Central University of Finance and Economics, said that the housing pension system established this time mainly uses public funds and establishes a public housing pension account. The funds in the public account come from public funds, and in accordance with the principle of "not increasing personal burdens and not reducing personal rights and interests", local governments will explore funding channels. Therefore, the public housing pension account established this time will not increase the burden on owners.

The part of housing pension that needs to be borne by individuals, that is, the part in the personal account, is actually the current special housing maintenance fund.

Yan Rong, director and researcher of Shanghai Real Estate Science Research Institute, said that according to laws and regulations, "whoever owns the property is responsible, whoever uses the property is responsible", and the property owner is the first person responsible for housing safety. However, housing safety has externalities, which may endanger the lives and property of the people. Public areas or facilities may be the source of hidden dangers or damage. Without appropriate institutional arrangements, such risks and hidden dangers are difficult to eliminate in a timely manner.

"Since the public account is aimed at public safety issues caused by public areas, the source of funds must naturally be raised by the public sector, and the main source includes the income from urban land transfer." Yan Rong said that it can also come from the renovation funds of old residential areas and other fiscal funds. Therefore, the current research on establishing a public account does not require the people to pay directly.

Tang Xiaochen told China Business News that the difference between public accounts and personal accounts lies mainly in the different sources of funds and scope of use. Public account funds mainly come from government collection, land transfer fees, renovation funds for old residential areas, and other fiscal funds, and are used to support the maintenance and renovation of public areas and public facilities. They are coordinated by the government at the overall level and are not targeted at specific residential areas. Personal account funds are mainly paid by owners at a certain ratio and are used for the maintenance and renovation of personal houses. Personal account funds are only used for the maintenance of their own residential areas.

Chen Wenjing, director of market research at China Index Academy, said that the establishment of a housing pension system will also provide important financial support for housing physical examinations and housing insurance. In addition, the source of funds for public accounts is also a focus of attention from all walks of life. The allocation of project land transfer fees, value-added income from maintenance funds, fiscal subsidies, and the creation of supporting financial products may be important exploration directions.

In addition to exploring the establishment of public accounts, personal accounts based on residential maintenance funds also need to be operated more effectively. At present, some cities have implemented reforms to the system of purchasing elevator insurance with special residential maintenance funds, using the added value of maintenance funds to establish a unified account, improving the joint decision-making system for owners, and adopting the "public announcement without objection" method to purchase elevator insurance under the supervision of the neighborhood committee, which has achieved good results.