Still Worried Container Buildings Violate Rules? Encouragement Policies Are Already Out!

Many people have recently asked: Can container buildings be placed in China? Can they be registered? If you share the same questions, this is for you.

As strategic plans from the Party Central Committee, the State Council, and the Ministry of Housing and Urban-Rural Development to vigorously develop prefabricated buildings go deeper, related policies have landed densely across regions. Rewards, support, and encouragement have become key words. Prefabricated buildings are clearly driving policy innovation, mechanism innovation, and management innovation in construction, with ongoing upside for industry transformation and upgrading.

Shenzhen departments coordinate: the "3% floor-area reward measure" now has detailed requirements and procedures, and is officially 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 Floor-Area Rewards for Prefabricated Building (Housing Industrialization) Projects in Shenzhen. That means the long-awaited "3% floor-area reward measure" in Shenzhen's prefabricated-building sector now has detailed requirements and operating procedures and is officially in force.

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 floor-area reward: "The rewarded floor area is 3% of the prescribed residential floor area built with industrialized methods, with 50% of the assessed market land price charged."

After five years of preparation, the document was finally released and became a new programmatic text. A series of encouragement and support policies has greatly stimulated enterprises and the market, and laid a new foundation for Shenzhen's building industrialization.

In fact, "granting floor-area rewards for prefabricated buildings" has been introduced in many Chinese cities. At the practical level, however, because housing and construction, land, planning, development and reform, and other authorities are involved—and because implementation risks behind the reward must be controlled—the policy has widely faced the awkward problem of being "hard to land."

To remove policy barriers and, through detailed rules, truly play the positive roles of government guidance, encouragement and support, market operation, and social participation, Shenzhen's housing and construction bureau and land resources commission have in recent years actively studied and explored ways to break departmental silos and simplify procedures. They ultimately formed the "basic principles" and "processing procedures" for floor-area rewards, strongly advancing prefabricated buildings.

Shanghai: BIM listed in land-transfer conditions; all prefabricated projects must adopt it; subsidies 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 spirit of the Implementation Opinions of the CPC Shanghai Municipal Committee and the Shanghai Municipal People's Government on Further Strengthening Urban Planning, Construction, and Management Work in This Municipality in Line with the Central Urban Work Conference, further advance Building Information Modeling (BIM) application, and achieve the goal of citywide BIM application in 2017, and pursuant to the Guiding Opinions on Promoting BIM Application in This Municipality and related rules, notice is hereby given as follows on further strengthening BIM promotion and application:

Promotion and application requirements

BIM shall be rolled out comprehensively by project scale, investment nature, and region, in phases. From October 1, 2016, newly approved projects in the following scopes shall apply BIM in design and construction stages, and are encouraged to apply BIM in operation and other stages. For projects already approved but not yet started, BIM requirements shall be clarified in design or construction tendering/contracting according to the current stage. Projects already under construction are encouraged to apply BIM at completion acceptance, archiving, and operation.

• Government fiscal investment projects invested by municipal, district, or designated regional management committees with investment of $13,888,889 or above, or with a single-building floor area 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 projects invested by state-owned enterprises in the six key functional areas: Expo Park, Hongqiao CBD, International Tourism Resort, Lingang, Qiantan, and both banks of the Huangpu River
• Projects implemented with prefabricated building methods
• Projects applying for green-building star ratings, outstanding survey and design awards, or quality awards
• Major renovation 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 and state-owned enterprises shall fully apply BIM. Other social-investment and below-scale projects are encouraged to apply BIM.

Project review and supervision

Member units of the Shanghai BIM Technology Application Promotion Joint Meeting, district governments, and designated regional management committees shall attach high importance, intensify BIM promotion, and strengthen review and management at every stage of projects required to apply BIM, to ensure BIM is implemented.

• At land transfer: For land not yet supplied, district governments shall clarify BIM application requirements in the annual construction land supply. The municipal housing and urban-rural construction commission, together with the municipal development and reform commission, planning and land resources bureau, and others, shall prepare a BIM application implementation plan aligned with that year's construction land supply plan, and issue it to district governments after municipal government approval.

For projects supplied by bidding, auction, or listing, the planning and land resources department shall consult the housing and construction authority before land transfer. The housing and construction authority shall state whether BIM must be applied; where BIM is required, the planning and land resources department shall note it in the land-transfer documents and specify BIM requirements in the land-transfer contract.

For shared-ownership affordable housing, public rental housing, and government-invested public buildings supplied by allocation, the housing and construction authority and the development and reform authority shall respectively state BIM opinions at project recognition and approval stages; the planning and land resources department shall, based on those opinions, make BIM application a condition of land supply.

• At project approval: Development and reform departments and designated regional management committees shall clearly set BIM application requirements for projects required to use BIM, including application stages, items, depth, and expected results. New projects shall require full-lifecycle application, cost control with BIM, and archiving of as-built models. In project budgeting, finance and housing and construction departments shall clarify BIM requirements for eligible fiscal-budget or urban-maintenance major renovations.

• At planning approval: The planning and land resources department shall require BIM models at the corresponding depth to assist scheme design and engineering planning permit reviews.

• At construction management: The housing and construction department shall collect BIM application information during construction application review for projects required to use BIM; design and construction tender documents shall add BIM implementation requirements, and one BIM expert shall be drawn to join bid evaluation. For projects whose BIM design models propose industrialized components and equipment, physical BIM models of similar components or equipment shall be required. At construction permitting, BIM application information shall be submitted and reviewed. Construction drawing review and safety/quality supervision may use submitted models for assistance.

• At completion archiving: A BIM as-built model matching the as-built drawings shall be archived. At completion acceptance filing, BIM application outcome information shall be submitted—including stages, items, depth, cost, and results—and confirmed by the filing authority.

• Competent authorities for health, education, culture, transport, water affairs, sports, and similar projects shall clarify BIM requirements in annual project plans and advancement, and ensure implementation.

Encouragement mechanisms

• For projects that apply BIM for collaborative design and build construction-drawing models, when applying for a construction permit, the construction-drawing review certificate may be submitted within 3 months after the permit is issued.
• For projects led by the developer that apply BIM in design and construction, the subsidy is $2.78 per square meter, capped at $416,667; for projects that apply BIM in design, construction, and operation, the subsidy is $4.17 per square meter, capped at $694,444. The developer applies to the municipal housing and urban-rural construction commission; funds come from Shanghai's special support fund for building energy-saving and green-building demonstration projects. Related application and approval procedures are set separately by the municipal housing commission, development and reform commission, and finance bureau.
• In bid evaluation, enterprises with BIM capability that have participated in Shanghai BIM Technology Application Pilot Projects and similar programs receive extra points.
• For government and state-owned enterprise investment projects that must be tendered by law, where the developer provides a reviewed BIM application plan, EPC (general contracting) may be preferred.
• For affordable housing that implements BIM, BIM application costs are included in project cost.

Safeguard measures

• Development and reform departments and designated regional management committees shall clarify fee standards, allocate matching funds, and specify expenditure channels in government investment project approvals; the municipal economy and information technology commission shall do the same for state-owned industrial investment projects; for approved but not-yet-started projects, matching costs may be added via budget adjustment applications. Finance and housing departments shall allocate matching funds in major-renovation budget reviews.
• Municipal planning, fire, transport, housing and construction, and related departments shall prepare BIM-based review or acceptance filing requirements and procedures to simplify processes. The municipal housing and construction department shall draft BIM-related clauses for design/construction tender documents and model contracts; quality and safety supervisors shall establish BIM-based quality and safety supervision requirements and manuals to raise supervision level and efficiency.
• The housing and construction department, with related units, shall organize BIM application standards, codes, and supporting policy documents, and train talent for key roles to continually raise application levels among local enterprises and personnel.
• District governments and designated regional management committees shall strengthen BIM promotion in their areas, clarifying implementing bodies and advancement requirements per the municipal annual plan. The municipal housing authority, with development and reform and planning and land resources departments, shall check each year how district governments execute BIM implementation plans; results feed into the district annual assessment indicator for "comprehensive building energy saving and property energy saving."
• For projects that obtained BIM matching funds or encouragement policies but failed to apply BIM as required, relevant authorities shall recover or cancel support and circulate criticism.

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

Zhejiang: 100% fully finished new housing; prefabricated EPC may be exempt from tendering

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

Zhe Zheng Ban Fa [2016] No. 111

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

To implement decisions of the central authorities and the provincial Party committee and government, carry out the spirit of the provincial urban work conference, and pursuant to Several Opinions of the CPC Central Committee and the State Council on Further Strengthening Urban Planning, Construction, and Management (Zhong Fa [2016] No. 6) and the Zhejiang Green Building Regulations, and with provincial government approval, the following implementation opinions are put forward to vigorously advance green buildings and promote modernization of the building industry:

Main goals

• Full green-building coverage. Following the principles of applicable, economical, green, and beautiful architecture, further improve building function and energy, water, land, and material saving and environmental protection. By 2020, achieve full coverage of one-star green buildings for new buildings in urban areas province-wide, with two-star and above accounting for more than 10%.
• Expand prefabricated building coverage. Government investment projects shall fully use prefabricated technology; affordable housing projects shall all use prefabricated construction. In 2016, province-wide new-project prefabricated floor area shall reach more than 1,111,111 square meters, of which prefabricated residential and public buildings (excluding venue buildings) shall exceed 416,667 square meters. From January 1, 2017, all new projects on transferred or allocated land in the central urban areas of Hangzhou, Ningbo, and Shaoxing shall use prefabricated construction. By 2020, prefabricated buildings shall account for 30% of new buildings.
• Full coverage of fully finished new housing. From October 1, 2016, all new housing on transferred or allocated land in city and county central urban areas province-wide shall be fully finished and delivered as finished product; ongoing housing projects are encouraged to adopt full finishing.

Key tasks

• Formulate industrial development plans. Compile the Zhejiang Building Industry Modernization 13th Five-Year Plan. Localities shall, per the Technical Guidelines for Compiling Zhejiang Green Building Special Plans, promptly prepare green building special plans, reasonably set overall goals and technical paths for green buildings and building industrialization in prefecture-level cities and counties (cities), scientifically delineate green-building target management zones and policy units, and clarify area shares of two- and three-star green buildings among new civil buildings in each zone, key implementation areas for prefabricated buildings and fully finished housing, and control indicators such as green-building grades and prefabricated/full-finish requirements for new project types. After compilation, special plans are approved and published by the same-level government. Prefecture-level cities shall finish by end-2016; counties (cities) by end-June 2017.
• Strengthen production capacity. Localities shall actively advance building industrialization bases, optimize layout, and form component production capacity suited to industrialization. Give full play to design leadership: actively adopt prefabricated structural systems in design, strongly raise survey and design personnel's BIM capability, continually improve modular design application, and ensure design depth meets factory production and assembly construction. Promote integrated civil/fit-out design and construction and integrated kitchen-bath installation; promote prefabricated fit-out technologies and products for industrialized interior integration. Use industry alliances to improve the chain and develop equipment manufacturing, logistics, green building materials, construction machinery, renewable energy, and related industries, gathering branded products and key enterprises with proprietary IP.
• Ensure projects land. Localities shall, based on green building special plans and targets, set annual implementation plans for prefabricated buildings and fully finished housing and file them with the provincial housing and construction department. Strengthen supervision of such projects, build dynamic supervision and industry statistics systems, and create project files and ledgers for information-based management. For new projects whose special-plan control indicators require prefabricated construction and full finishing, development and reform, construction, land resources, and planning departments shall strictly enforce requirements at land transfer, planning approval, design review, construction permitting, and acceptance.
• Improve technical support. Improve the green building standards system; accelerate compilation and timely release of standards for prefabricated buildings, fully finished housing, and BIM applications to meet component design, production, construction, and acceptance needs. Promptly set or adjust supplementary pricing bases for prefabricated buildings and BIM. Give full play to building industrialization expert committees at all levels for technical review, assessment, and consulting. Prefabricated buildings shall be certified per the Evaluation Guidelines for Industrialized Buildings.
• Advance renewable energy building integration. New civil buildings shall implement integrated renewable energy application per national and provincial laws and rules, at scales meeting Zhejiang engineering standard DB33/1105-2014 Accounting Standard for Renewable Energy Application in Civil Buildings. Equipment shall be designed as one with the building and coordinated with the structure and surroundings. On flat roofs, use parapets and similar elements for appropriate screening; on pitched roofs, tanks and equipment without solar-radiation needs shall be concealed, and collectors and PV panels integrated with the pitch. Design and construction of renewable systems shall meet mandatory engineering standards for safety and reliability.
• Promote steel structures. Leverage Zhejiang's steel-structure industry clusters; vigorously promote steel buildings and accelerate integration of prefabricated concrete and steel structures. Actively advance steel residential buildings; promote full steel application in government-invested public buildings and large public buildings over 2,778 square meters such as airports, stations, hotels, restaurants, malls, and office buildings. Orderly advance light-steel rural housing; widely apply steel in industrial buildings and municipal transport infrastructure. Actively build steel-structure industry bases and scale clusters. Strongly raise steel enterprises' EPC capability, shifting from specialty contractors to system integrators. Accelerate local technical standards and engineering pricing bases for steel buildings to promote industrialization and scale.
• Strengthen quality and safety management. Establish quality and safety assurance systems for prefabricated buildings and fully finished housing; reinforce enterprises' primary quality and safety responsibility and lifelong quality responsibility; tighten supervision and on-site quality and safety management. Strengthen whole-process component quality management with IoT information systems for tracking, location, maintenance, and accountability. Improve incoming inspection and installation-process inspection systems. Promote quality warranties and insurance for prefabricated buildings and finished housing, plus third-party supervision of full finishing and early property involvement; encourage diverse insurance purchase and improve accountability and compensation mechanisms.
• Expand pilots and demonstrations. Advance building industrialization demonstration cities; strong construction cities (counties) shall take the lead as provincial demonstration cities. Plan demonstration bases, coordinate layout, implement policies, and promote industrial clustering. Use government investment projects as entry points to select typical, replicable projects for demonstration, and, combined with beautiful livable demonstration villages and rural housing design pilots, promote contiguous rural housing upgrades with prefabricated methods and solar PV and other renewables. Advance demonstration enterprises, focusing on R&D, component production, and construction firms with strong innovation and high industrialization and informatization levels.

Policy support

• Strengthen land safeguards. Localities shall, per industrialization goals and land-use and urban master plans, arrange dedicated land quotas in the annual construction land plan keyed to assigned task area, prioritizing land for industrialization bases (parks). For provincial key-project industrialization base land, prioritize plan indicators.
• Strengthen fiscal support. Provincial finance shall integrate related special funds to support building industrialization. Local governments shall increase investment and integrate special funds focusing on technological innovation, bases, and prefabricated projects. For whole-village or contiguous rural housing upgrade projects meeting prefabricated requirements, grant subsidies of no more than 10% of main works cost; specific standards are set by prefecture-level city governments. Prefabricated wall portions in prefabricated projects, once certified by relevant departments, are treated as new wall materials, with wall-reform funds collected and immediately refunded. Where buildings use solar, shallow geothermal, or air-source energy, developers may apply for project subsidies per national and provincial rules.
• Increase financial support. For commodity housing built as prefabricated buildings purchased with housing provident fund loans, the loan amount may rise by up to 20%; specific ratios are set locally. Buyers of finished housing may set loan amounts by the finished-housing transaction price. For farmers' self-built homes using prefabricated methods, support personal lending services and rates.
• Implement tax preferences. Encourage and support enterprises, universities, and R&D institutes developing green-building new technologies, processes, materials, and equipment. Related R&D expenses may enjoy pre-tax additional deductions and other preferences per national rules. Support eligible provincial building industrialization demonstration enterprises in applying for high-tech enterprise status and related tax preferences after certification. For prefabricated projects, the contractor's quality deposit is calculated at 2% of (contract total minus prefabricated component total); the developer's residential property warranty deposit is calculated at 2% of (property construction and installation cost minus prefabricated component total).
• Encourage project application. For commodity housing meeting prefabricated requirements, prefabricated wall floor area (not exceeding 3%–5% of planned total floor area) need not count toward plot FAR; for projects meeting both prefabricated and full-finish requirements, prefabricated wall floor area (not exceeding 5% of planned total) need not count toward FAR—specific methods set by local governments. Floor area added by wall insulation technology is excluded from FAR-counted area. For residential buildings using ground-source heat pumps for heating and cooling, system electricity may use residential peak-valley time-of-use tariffs.
• Promote EPC. Prefabricated projects should prefer integrated design-production-construction EPC. For government financing projects that must be tendered by law where only a few industrialization production-construction firms can undertake the work, invitation tendering is allowed if rules are met. Prefabricated buildings needing patented or complete prefabricated technology may, per the Implementation Regulations of the Tendering and Bidding Law of the PRC, lawfully forgo tendering.
• Optimize approval services. For commodity housing projects that meet prefabricated requirements, obtained land-use rights by transfer, hold land-use and construction planning permits, have invested 25% or more of total construction investment or completed foundations to ±0, and have set construction progress and delivery dates, pre-sale registration and a commodity housing pre-sale permit may be processed with the local real estate authority, unless laws provide otherwise. When processing the Commodity Housing Pre-sale Permit, prefabricated component investment may count toward total construction investment for progress measurement. For prefabricated projects of 10 stories or more, developers may apply for staged main-structure acceptance.

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

Safeguard measures

• Strengthen organization and leadership. Establish a coordination mechanism led by the provincial housing and construction department with relevant provincial units to jointly advance prefabricated buildings and fully finished housing, clarifying responsibilities of development and reform, economy and information technology, science and technology, finance, land resources, housing and construction, quality supervision, and other departments. The provincial housing and construction department shall promptly set recognition methods for provincial demonstration cities, enterprises, bases, and projects, and design and acceptance standards for fully finished housing. Localities shall clarify division of duties, issue support policies, and ensure tasks are completed.
• Strengthen assessment and inspection. Intensify assessment of building industrialization advancement, issue annual responsibility letters, and conduct special inspections. Governments at all levels shall treat green building technology and building industrialization as important drivers of modern urban construction and earnestly fulfill primary responsibility.
• Strengthen talent cultivation. Explore and establish mechanisms to attract and train building industrialization talent; strengthen high-level management training and reserves. Relevant universities should add related courses to train urgently needed high-end talent. Conduct classified training for enterprise and management personnel; cultivate practical technicians. Rely on pilots and demonstration projects and internal training to develop skilled talent.
• Strengthen publicity and promotion. Build a promotion mechanism combining government, media, enterprises, and the public; regularly organize promotion events; strengthen industry exchange and cooperation; recommend quality, trustworthy technologies, products, and enterprises to society; and raise public awareness and recognition of green buildings, prefabricated buildings, and finished housing.

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

Shen Jian [2016] No. 148

To all relevant units:

To further advance modern building industrialization in this city, pursuant to the Implementation Opinions of Shenyang on Comprehensively Advancing Building Industry Modernization (Shen Zheng Fa [2015] No. 57) and the Notice of the General Office of the Shenyang Municipal People's Government on Issuing Several Policy Measures to Advance Building Industry Modernization (Shen Zheng Ban Fa [2015] No. 95), and in line with national policies on building energy saving and green buildings, these implementation measures are formulated.

Subsidy principles

• Favor cultivating building industry modernization demonstration projects in this city
• Favor raising the technological content and prefabrication rate of prefabricated projects
• Favor mobilizing enthusiasm among all parties in building industrialization
• Favor improving this city's building industry modernization management and technical systems
• Favor advancing building energy saving and green buildings

Subsidy scope and standards

Subsidy scope

Basic requirements (all three must be met):

• Under-construction or new construction projects (excluding government-invested projects)
• Must adopt full finishing (under equal conditions, priority to integrated kitchen and bath)
• Prefabricated projects with demonstration effect

Compliance requirements (meet any one of the following):

• Single-building prefabrication rate above 40%
• Prefabrication requirements: use prefabricated exterior walls, or single-building prefabrication rate of 30% or above; and building energy-saving / green-building requirements: 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)—must meet any one prefabrication item and any one energy-saving/green item
• Use prefabricated exterior walls or single-building prefabrication rate of 30% or above, and apply BIM in design or construction

Subsidy standard

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

Application procedures and project review

• The developer submits a written application and materials to the municipal construction commission (see attachment for materials)
• The municipal construction commission receives applications and conducts preliminary technical review
• Together with related departments, it organizes technical experts to review the project and form opinions
• Approved projects are publicized for 7 days on the municipal construction commission website (www.syjs.gov.cn); if no objection, they enter the subsidy application project pool

Related requirements in fund management

Contract management

The municipal construction commission applies contract management to projects in the pool and signs contracts with project entities clarifying project name, responsible party, performance period, total subsidy, support method, payment conditions, breach liability, and more. Project entities shall strictly perform contract terms.

If special circumstances require change or cancellation during implementation, the project entity shall apply for approval per the application procedure.

Project acceptance requirements

Project entities shall implement projects per national and provincial/municipal engineering standards. After a demonstration project is completed, the municipal construction commission accepts the project.

Review and fund disbursement

After completion, the project entity applies for the subsidy per contract; the municipal construction commission reviews per contract, issues a final opinion, and after municipal government confirmation, disburses the subsidy.

Supervision and management

• The municipal construction commission supervises and manages subsidized projects during construction
• No unit may fraudulently apply for subsidy funds; once verified, funds will be recovered and handled per relevant rules

Address: No. 1777 Hualong Road, Shanghai

Website: www.ourcompany.com

Phone: 021-60760737

Mobile: 13681880835/17721310336/13331815891

Email: marketing@ourcompany.com

24H premium customer service hotline: 400-716-6557