A look at the methods of securing land for characteristic town projects

On 1 July 2016, the Ministry of Housing and Urban and Rural Development, the National Development and Reform Commission and the Ministry of Finance jointly issued the Notice on Launching the Work for Fostering Characteristic Towns, deciding to launch the work for fostering characteristic towns on a nationwide scale. At the present stage, such different types of characteristic towns as historical/cultural towns, characteristic industry towns, ecotourism towns, etc. have developed. However, regardless of the type of town, project land is the physical medium on which characteristic towns are developed, and the methods of securing project land is an issue that all characteristic towns face.

We once provided our services throughout the process for a characteristic town project in Yunnan. This project is both a characteristic industry town, being the place of origin of a famous characteristic Chinese traditional medicine, and an ecotourism town, as it is located in a scenic mountainous area. Within the planned scope of the project, there is a characteristic food street, music town, retirement neighborhood, ski resort, hospital, schools, theater, hot spring hotel, commercial real estate, etc. As such projects take various forms, the methods and means by which investors obtain project land also vary.

Allocation method. The primary condition for allocation is that the purpose of the land complies with the Allocated Land list. Accordingly, not all projects within a town require the investors to acquire the land for consideration, for example the land for public roads, public squares, green spaces, water supply facilities, non-profit schools, charitable hospitals, etc. within a town may be provided by allocation, thereby reducing the pressure on the investors to a certain extent. However, it should be noted that the restrictions on the purpose of allocated land are quite strict, with the state showing a trend toward narrowing the scope of allocated land, and it is almost impossible to secure land by allocation for for-profit schools, hospitals, theaters, etc.

Wang Jihong is a partner and Tang Hongwei is an associate at Zhong Lun Law Firm