Reconstruction of Prefabricated Panel Houses

The reconstruction of prefabricated panel houses is both necessary and feasible at present, but it faces challenges in terms of residents' opinions, housing quality, quantity, and funding.

Necessity of Reconstruction

• Severe Housing Aging Issues: There are approximately 120 million prefabricated panel houses in China, mostly built from the 1950s to the 1980s, with a designed lifespan of 30 to 40 years. Many of them are now over-served. They have poor earthquake resistance, only one-third of the current standard. In the Tangshan earthquake, the collapse rate was as high as 83%. During the heavy rain in Zhengzhou in 2023, three over-served prefabricated panel houses developed structural cracks. There are also issues such as poor sound insulation and small unit sizes. Even after renovation, the inherent defects of brick-concrete structures are still difficult to overcome.
• High Renovation Costs: Renovation costs are often underestimated. In the long run, the cost of multiple reinforcements is not lower than that of reconstruction. The cost of renovation per square meter ranges from 3,000 to 5,000 yuan, while the construction and installation cost of reconstruction is about 2,950 yuan. With government subsidies, the financial burden on residents is lighter.

Advantages of Reconstruction

• Improved Living Quality: For example, in the "Four Originals" reconstruction project in Yuhua District, Changsha, residents raised about 100,000 yuan on their own. The new houses meet earthquake resistance standards, and the optimized unit layout has increased the usable floor area ratio from 65% to 80%. In the project in Gongshu District, Hangzhou, residents are offered the choice of a 30% discount on the original relocation area or a 1:1.2 exchange for peripheral areas. 78% of the residents chose the latter option, resulting in improved living quality and more choices.
• Policy Support: The central government's "Opinions on Continuously Promoting Urban Renewal Actions" clearly states the need to accelerate the demolition and renovation of Grade D dilapidated houses. Funding sources include fiscal special bonds and ultra-long-term special treasury bonds. Zhengzhou's prefabricated building policy is being promoted, aiming to have prefabricated buildings account for more than 50% of new construction by 2025, providing technical support for reconstruction.
• High Appreciation Potential: Reconstructed houses have a high appreciation potential. An old renovation project in Chengdu saw a 40% increase in value, and reinforced houses in Hangzhou can also be sold at a good price. More importantly, reconstruction can release the land value in urban core areas.

Challenges Faced by Reconstruction

• Diverse Residents' Opinions: Young people hope that old houses can be "demolished and rebuilt", but many elderly people have emotional attachments to their old houses and oppose "demolition and reconstruction".
• Varied Housing Quality: The quality of prefabricated panel houses varies. Some can be renovated and continue to be inhabited through old renovation methods after identification, while some have become dilapidated houses and can be included in the demolition list, making it difficult to handle them uniformly.
• Large Quantity: A large number of prefabricated panel houses were built in China in the 1970s and 1980s. It is unrealistic to "demolish and rebuild" all of them in a short period of time, and it will also have an impact on the urban environment.
• Funding Issues: If residents share the costs, demolition and reconstruction are more likely to be achieved. However, if residents are unwilling to contribute or have different opinions, the plan will be shelved. When applying for government special renovation funds or investment from developers, there will be significant differences in compensation plans.