Still Worried Container Buildings Break the Rules? Encouraging Policies Are Out!

Many friends have asked recently: can container buildings be placed in China? Can they be registered? If you have the same questions, read on.

As the CPC Central Committee, the State Council, the Ministry of Housing and Urban-Rural Development, and others deepen the strategic push for prefabricated buildings, local policies have landed in denser waves. Rewards, support, and encouragement are the keywords. Prefabricated construction is driving policy, mechanism, and management innovation in the building sector, with steady upside for industry transformation and upgrading.

Shenzhen agencies act together: the "3% GFA reward" now has detailed rules and procedures and is formally in force

The Shenzhen Municipal Housing and Construction Bureau and the Shenzhen Municipal Planning and Land Resources Commission jointly issued the Notice on the Implementation Rules (Trial) for Building Area Rewards for Prefabricated Building (Housing Industrialization) Projects in Shenzhen. That means the long-awaited "3% building area reward" now has clear requirements and an operating process and is officially live.

As a comprehensive pilot city for housing industrialization, Shenzhen already stated in the 2014 Guiding Opinions on Accelerating Housing Industrialization in Shenzhen that eligible projects may apply for a GFA reward: "The rewarded building area is 3% of the specified residential GFA built with industrialized methods, with 50% of the assessed market land premium charged."

After five years of preparation, the document is finally out and serves as a new guiding framework. A series of supportive policies has strongly motivated enterprises and the market and opened a new stage for building industrialization in Shenzhen.

In fact, "GFA rewards for prefabricated buildings" have been issued in many Chinese cities. Yet in practice—because housing, land, planning, development and reform, and other authorities are involved, and because implementation risks behind the reward must be controlled—the policy has often been hard to land.

To clear barriers, Shenzhen's housing and construction and land resources agencies studied the issue, broke down silos, simplified procedures, and produced "basic principles" and "processing procedures" for the GFA reward, strongly advancing prefabricated buildings.

Shanghai: BIM written into land-grant conditions; prefabricated projects must fully adopt it; subsidy up to $694,444 — Notice on Further Strengthening the Promotion and Application of Building Information Modeling Technology in Shanghai (Draft for Comment)

To all relevant units:

To implement the Opinions of the CPC Shanghai Municipal Committee and the Shanghai Municipal People's Government on Further Strengthening Urban Planning, Construction, and Management in Line with the Central Urban Work Conference; to further promote BIM application and meet the 2017 goal of citywide BIM use; and pursuant to the Guiding Opinions on Promoting BIM Application in This Municipality and related rules, notice is given as follows on further strengthening BIM promotion and application.

Promotion and application requirements

BIM shall be rolled out by project scale, investment type, and district, in stages. From October 1, 2016, newly approved projects in the following scopes must use BIM in design and construction; use in operation and other stages is encouraged. For approved projects not yet started, BIM requirements shall be stated in design or construction bidding or contracting according to the current stage. For projects already under construction, BIM use in as-built archiving and operation is encouraged.

• Government fiscal investment projects of municipal, district, or designated area management committees with investment of $13,888,889 or above, or single-building GFA of $2,778 square meters or above (hereinafter "above-scale")

• Above-scale municipal and district major projects and projects invested by state-owned enterprises in suburban new towns

• Above-scale SOE-invested projects in six key functional areas: Expo Park, Hongqiao CBD, International Tourism Resort, Lingang, Qiantan, and both banks of the Huangpu River

• Projects delivered as prefabricated buildings

• Projects applying for green-building star ratings, outstanding survey and design awards, or quality awards

• Major repair projects with fiscal budget or urban-maintenance funds of $4,166,667 or above

From October 1, 2017, all above-scale new, renovation, and expansion projects invested by government or SOEs shall fully apply BIM; other social-investment and below-scale projects are encouraged to use BIM.

Project review and supervision

Members of the Shanghai BIM Technology Application Promotion Joint Meeting, district governments, and designated area management committees shall prioritize BIM promotion, strengthen review at every management link for projects that must use BIM, and ensure BIM lands in practice.

• In land granting: for parcels not yet supplied, district governments shall state BIM requirements in the annual construction-land supply. The municipal housing and urban-rural construction commission, with development and reform, planning and land resources, and other departments, shall prepare a BIM implementation plan tied to the year's land-supply plan and issue it to districts after municipal government approval.

For projects supplied by bidding, auction, or listing, planning and land resources shall consult the housing and construction authority before granting land. Housing and construction shall state whether BIM is required; if required, planning and land resources shall note it in the grant documents and in the land-grant contract.

For allocated land for shared-ownership affordable housing, public rental housing, and government-invested public buildings, housing and construction and development and reform shall state BIM opinions at project recognition and approval stages; planning and land resources shall treat BIM requirements as a land-supply condition.

• In project approval: development and reform and designated area committees shall state BIM requirements—including stages, items, depth, and expected results—for projects that must use BIM. New projects shall require full-lifecycle BIM, cost control via BIM, and as-built model archiving. In budgeting, finance and housing and construction shall state BIM requirements for eligible fiscal or urban-maintenance major repairs.

• In planning approval: planning and land resources shall require BIM models of the appropriate depth to support schematic design and engineering planning permits.

• In construction management: housing and construction shall collect BIM application information when projects that must use BIM apply for construction. Design and construction bid documents shall add BIM requirements, and one BIM expert shall sit on the evaluation panel. Where productized components and equipment are planned in the BIM design model, a physical BIM model of similar components or equipment shall be required. At construction permitting, BIM application information shall be submitted and reviewed. Drawing review and safety/quality supervision may use models to assist review and oversight.

• In as-built archiving: a BIM as-built model matching the as-built drawings shall be archived. At completion filing, BIM outcome information—stages, items, depth, cost, deliverables, and so on—shall be reported and confirmed by the filing authority.

• Health, education, culture, transport, water, sports, and other competent authorities shall state BIM requirements in annual project plans and ensure implementation.

Incentive mechanisms

• For projects that use BIM for collaborative design and build a construction-drawing model, when applying for a construction permit the construction-drawing review certificate may be submitted within 3 months after the permit is issued.

• Where the developer leads BIM use: for design and construction stages, subsidy is $2.78 per square meter, capped at $416,667; for design, construction, and operation all using BIM, subsidy is $4.17 per square meter, capped at $694,444. Developers apply to the municipal housing and urban-rural construction commission; funds come from Shanghai's special support for building energy efficiency and green-building demonstration projects. Application procedures will be set separately by that commission, development and reform, and finance.

• In bid evaluation, enterprises with BIM capability that took part in Shanghai BIM pilot projects and similar programs receive extra points.

• For government and SOE projects that must be tendered by law, if the developer provides a reviewed BIM application plan, engineering, procurement, and construction (EPC) may be preferred.

• For affordable housing using BIM, BIM application costs count toward project cost.

Safeguards

• Development and reform and designated area committees shall set fee standards, fund matching costs, and state funding channels for government projects; the municipal economy and informatization commission shall do the same for SOE industrial projects; for approved but unstarted projects, matching costs may be secured via budget adjustment. Finance and housing and construction shall fund matching costs in major-repair budgets.

• Planning, fire, transport, housing and construction, and related departments shall prepare BIM-based review or acceptance requirements and procedures and simplify processes. Housing and construction shall issue sample bid and contract clauses for BIM; quality and safety supervisors shall issue BIM-based supervision requirements and manuals to raise efficiency.

• Housing and construction with related units shall organize BIM standards and supporting policies, train talent, and raise industry skill levels.

• District governments and designated area committees shall strengthen local BIM promotion per the municipal annual plan, with clear bodies and requirements. The municipal housing commission with development and reform and planning and land resources shall check district execution each year; results feed the district annual assessment indicators for comprehensive building energy efficiency and property energy efficiency.

• Projects that obtained BIM funding or incentives but failed to apply BIM as required shall return or forfeit support and be publicly criticized.

This notice takes effect on the date of issuance and remains valid through December 31, 2018.

Zhejiang: 100% fully finished new housing; prefabricated EPC may skip tendering

Implementation Opinions of the General Office of the Zhejiang Provincial People's Government on Promoting Green Buildings and Building Industrialization

Zhejiang Government Office Document [2016] No. 111

To municipal and county (city, district) people's governments and provincial government units:

To implement central and provincial decisions, the spirit of the provincial urban work conference, the Several Opinions of the CPC Central Committee and the State Council on Further Strengthening Urban Planning and Construction Management (Central Document [2016] No. 6), and the Zhejiang Green Building Regulations, and with provincial government approval, the following opinions are issued:

Main goals

• Full coverage of green buildings. By the applicable, economical, green, and beautiful building principles, raise function and energy, water, land, and material efficiency and environmental performance. By 2020, all new urban buildings province-wide shall meet one-star green building or above, with two-star and above at 10% or more.

• Broader prefabricated coverage. Government-invested projects shall fully use prefabricated technology; affordable housing shall all use prefabricated construction. In 2016, new prefabricated GFA province-wide shall exceed $1,111,111 square meters, of which prefabricated residential and public buildings (excluding venues) exceed $416,667 square meters. From January 1, 2017, all new projects on granted or allocated land in central urban areas of Hangzhou, Ningbo, and Shaoxing shall use prefabricated construction. By 2020, prefabricated buildings shall account for 30% of new construction.

• Full coverage of fully finished new housing. From October 1, 2016, all new housing on granted or allocated land in city and county central urban areas province-wide shall be fully finished and delivered as finished homes; projects under construction are encouraged to adopt full finishing.

Key tasks

• Industrial development planning. Compile the Zhejiang Building Industrialization 13th Five-Year Plan. Localities shall prepare green-building special plans per provincial technical guidelines, set overall goals and technical paths, define target-management zones and policy units, and state area ratios for two- and three-star green buildings, key zones for prefabrication and full finishing, and control indicators. After approval by the same-level government, plans take effect. Prefecture-level cities shall finish by end-2016; counties (cities) by end-June 2017.

• Production capacity. Advance industrialization bases, optimize layout, and build component capacity suited to industrialization. Lead with design, adopt prefabricated structural systems, raise BIM skills among survey and design staff, improve modular design, and ensure design depth fits factory production and assembly. Integrate civil works and interior design/construction and kitchen-bath installation; promote prefabricated interiors; industrialize interior components. Strengthen industry alliances and related industries—equipment, logistics, green materials, machinery, renewables—and gather branded products and key enterprises with IP.

• Project delivery. Localities shall set annual plans for prefabricated and fully finished projects per special plans and targets and file them with the provincial construction department. Strengthen supervision, dynamic oversight, and industry statistics with project files and digital management. For new projects whose control indicators require prefabrication and full finishing, development and reform, construction, land, and planning shall enforce requirements at land grant, planning approval, design review, construction permit, and acceptance.

• Technical support. Improve green-building standards; accelerate standards for prefabrication, full finishing, and BIM. Update supplementary pricing for prefabrication and BIM. Use industrialization expert committees for review, assessment, and consulting. Prefabricated buildings shall be recognized per the Industrialized Building Evaluation Guidelines.

• Renewable energy building integration. New civil buildings shall apply integrated renewables per national and provincial rules and the provincial Civil Building Renewable Energy Application Accounting Standard (DB33/1105-2014). Equipment shall be designed with the building and coordinate with the surroundings. On flat roofs, use parapets and similar elements for screening; on pitched roofs, hide tanks and non-solar equipment, and integrate collectors and PV with the roof. Design and construction shall meet mandatory engineering standards for safety and reliability.

• Promote steel structures. Leverage Zhejiang's steel-structure cluster; accelerate fusion of prefabricated concrete and steel. Advance steel-structure housing; government-invested public buildings and large public buildings over $2,778 square meters—airports, stations, hotels, restaurants, malls, offices—shall fully use steel. Orderly develop light-steel rural housing; widen steel use in industrial buildings and municipal transport infrastructure. Build steel-structure industry bases and clusters; raise EPC capability so specialists become system integrators. Establish local steel-structure technical standards and pricing to industrialize and scale the sector.

• Quality and safety. Build quality-safety systems for prefabrication and full finishing; strengthen enterprise primary responsibility and lifelong quality liability. Tighten site supervision. Manage components end-to-end with IoT for tracking, location, maintenance, and accountability. Improve incoming inspection and installation quality checks. Promote quality guarantees and insurance for prefabricated and finished homes, third-party oversight of full finishing, and early property involvement; encourage insurance products and improve liability and compensation.

• Expand pilots and demonstrations. Advance demonstration cities; strong construction cities (counties) should lead as provincial industrialization demonstration cities. Plan demonstration bases, policies, and industrial clustering. Use government projects as entry points for replicable demonstration projects; combine beautiful livable village programs and rural housing design pilots with prefabrication and solar PV. Foster demonstration enterprises strong in R&D, components, and construction with high industrialization and informatization.

Policy support

• Land security. Per industrialization targets and land-use and urban plans, set aside dedicated land indicators in annual construction-land plans for industrialization bases (parks). Priority land indicators for provincial key industrialization bases.

• Fiscal support. Provincial finance shall pool special funds for industrialization. Local governments shall increase investment and pool funds for innovation, bases, and prefabricated projects. Rural whole-village or contiguous housing upgrades meeting prefabrication requirements may receive subsidies of up to 10% of main-structure cost; prefecture-level cities set detailed rates. Prefabricated wall portions certified as new wall materials shall receive wall-reform fund rebate upon collection. Projects using solar, shallow geothermal, or air-source energy may apply for subsidies per national and provincial rules.

• Financial support. Housing provident-fund loans for prefabricated commodity housing may rise by up to 20%; local governments set the rate. Buyers of finished homes may base loan amounts on the finished-home transaction price. Preferential personal loan service and rates for farmers' self-built homes using prefabrication.

• Tax incentives. Encourage enterprises, universities, and R&D institutes to develop new green-building technologies, processes, materials, and equipment; R&D expenses may enjoy pre-tax additional deduction and related preferences. Support provincial industrialization demonstration enterprises in applying for high-tech enterprise status and related tax preferences. For prefabricated projects, contractors' quality deposits are calculated at 2% of contract price minus prefabricated component value; developers' residential property warranty deposits at 2% of building installation cost minus prefabricated component value.

• Encourage project use. For commodity housing meeting prefabrication requirements, prefabricated wall GFA (not exceeding 3%–5% of planned total GFA) may be excluded from plot ratio; where both prefabrication and full finishing are met, prefabricated wall GFA (not exceeding 5% of planned total GFA) may be excluded—local governments set detailed rules. Extra GFA from wall insulation is excluded from plot-ratio GFA. Residential buildings using ground-source heat pumps for heating and cooling may use residential peak-valley time-of-use electricity rates for those systems.

• Promote EPC. Prefabricated projects should prefer design-production-construction integrated EPC. For government-financed prefabricated projects that must be tendered by law, where only a few industrialization firms can deliver, invitation-to-tender may be allowed if rules are met. Prefabricated buildings that need patents or complete prefabricated technology packages may legally skip tendering under the Implementing Regulations of the Tendering and Bidding Law of the People's Republic of China.

• Optimize approval services. Commodity housing projects that meet prefabrication requirements, hold land-use and planning permits from granted land, have invested 25% or more of total construction investment or reached grade level (±0), and have set construction progress and delivery dates may register for pre-sale and obtain a pre-sale permit, unless otherwise provided by law. Prefabricated component investment may count toward total construction investment when measuring progress for the pre-sale permit. For prefabricated buildings of 10 stories or more, developers may apply for sectional acceptance of the main structure.

Prefabricated buildings in the support above mean prefabricated residential and public buildings, excluding venue buildings.

Safeguards

• Strengthen leadership. Establish a coordination mechanism led by the provincial construction department with relevant provincial units to advance prefabrication and full finishing, clarifying responsibilities of development and reform, economy and informatization, science and technology, finance, land resources, construction, quality supervision, and others. The provincial construction department shall promptly issue recognition methods for demonstration cities, enterprises, bases, and projects, and design and acceptance standards for full finishing. Localities shall assign responsibilities, issue support policies, and complete assigned tasks.

• Assessment and inspection. Strengthen assessment of industrialization progress; issue annual responsibility letters and run special inspections. Governments at all levels shall treat green-building technology and industrialization as key drivers of modern city building and fulfill primary responsibility.

• Talent development. Build mechanisms to attract and train industrialization talent and high-level managers. Universities should add related courses for urgently needed high-end talent. Run classified training for enterprise and government staff; develop practical technicians. Use pilots and demonstrations and in-house training to build skilled workers.

• Publicity. Build a government–media–enterprise–public promotion mechanism; hold regular outreach; strengthen industry exchange; recommend reliable technologies, products, and enterprises; raise public awareness and acceptance of green buildings, prefabrication, and finished homes.

Shenyang: industrialization demonstration projects — subsidy up to $694,444 — Shenyang Measures for Subsidy Funds for Building Industrialization Demonstration Projects

Shenyang Construction [2016] No. 148

To all relevant units:

To further advance modern building industrialization, pursuant to the Shenyang Implementation Opinions on Comprehensively Promoting Building Industrialization (Shenyang Government Document [2015] No. 57) and the Notice of the General Office of the Shenyang Municipal People's Government on Issuing Several Policy Measures to Promote Building Industrialization (Shenyang Government Office Document [2015] No. 95), and in line with national energy-efficiency and green-building policy, these measures are formulated.

Subsidy principles

• Help cultivate Shenyang's building-industrialization demonstration projects

• Raise the technical content and prefabrication rate of prefabricated projects

• Motivate all parties in building industrialization

• Improve Shenyang's industrialization management and technical systems

• Advance building energy efficiency and green buildings

Scope and standards

• Scope

Basic requirements (all three must be met):

• In-progress or new construction projects (excluding government-invested projects)

• Full finishing required (under equal conditions, integrated kitchen and bath preferred)

• Prefabricated projects with demonstration effect

Compliance (any one of the following):

• Single-building prefabrication rate of 40% or above

• Prefabrication: prefabricated exterior walls, or single-building prefabrication rate of 30% or above

  And energy/green: Shenyang one-star or above green building, or low-energy building, or solar PV integrated building (generation at least 1.5% of total building energy use)—one prefabrication item and one energy/green item required

• Prefabricated exterior walls or single-building prefabrication rate of 30% or above, with BIM in design or construction

• Standards

Eligible demonstration projects receive $13.9 per square meter for the developer, capped at $694,444 for the same project.

Application and review

• The developer submits a written application and materials to the municipal construction commission (see annex for materials)

• The commission receives applications and conducts preliminary technical review

• Together with related departments, it organizes experts for review and forms opinions

• Approved projects are publicized on the commission website (www.syjs.gov.cn) for 7 days; if no objection, they enter the subsidy project pool

Fund management

• Contract management

The commission manages pooled projects by contract with the implementing unit, stating project name, responsible party, performance period, total subsidy, support method, payment conditions, and breach liability. The unit shall strictly perform the contract.

Changes or cancellations for special reasons must follow the application procedure for approval.

• Acceptance

The implementing unit shall deliver per national and local engineering standards. After the demonstration project is completed, the municipal construction commission accepts it.

• Review and disbursement

After completion, the unit applies for subsidy per contract; the commission reviews, issues a final opinion, reports to the municipal government for decision, then disburses funds.

Supervision

• The municipal construction commission supervises and manages subsidized projects during construction

• No unit may fraudulently apply for subsidy; if verified, funds will be recovered and handled per regulations

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