Real Estate City Government Study

Since 1998, Chinese government has formally canceled allocating house in kind welfare. With political support, the real estate industry goes through the recession, and gradually becomes the leading and pillar industry in the national economy, which is an important force to promote persistently high-speed growth of national economy. However, its excessive development also leads to serious negative effects, such as over-enclosure, unreasonable layout, rapidly price-rising of the real estate, urban environment being destroyed, lacking social housing security system for low-income citizens, and so on. The central government attempted to macro-regulate its development by financial and land policies, but on the basis of feedback, the effect is minimal. In fact, the real estate industry has strong regional characteristic, which determines its development mainly relying on middle-level management of the city government.Under market-oriented economy, how to administrate the real estate industry is a new event and lacks of experience. And then these reasons lead our governments to management dislocation, offside and vacancy in management practice. Practice needs theoretical instruction. But at present, our researches mainly concentrate on macro-regulation from central government, comparing with few studies on the city government management, even less the systematic theories.This paper's research follows such train of thought: "why the city government manages the real estate industry - what objective to achieve - what methods should to be used - how to evaluate the effect." It synthesizes the knowledge of economics, management, sociology, ethics and politics, combines theories of sustainable development, the real estate economics, urban economics and management study, uses normative analysis, empirical analysis methods, qualitative analysis and quantitative analysis, to study theory and practice about the city government management on the real estate industry, and to complete a theory system about the city government management on the real estate industry finally. This theory system consists of theory bases, general objectives, basic methods, specific effects and so on.1. Research on theory bases underlies establishing this theory system. We only first determine why the city government manages the real estate industry. Then we can determine the general objectives. It has three main theory bases. First of all, from the theoretical point of view, urban land using public property right system is more superiority than private property right system. But the precondition is to implement paid use system. In the process of implementation paid use system, the city government has more information than central government, so the city government acting as the proxy of managing urban land is inevitable. Next, pushed by land price and driven by speculative demand, the real estate price has the characteristic of continuing rise. If we allow it develop freely, the real estate industry will form bubble. So the city government must control the real estate price. Finally, the city housing has both commodity attribute and safeguard attribute. In order to guarantee people's basic housing rights, the city government securing housing for low-income citizens is necessary.2. Research on general objectives is the core and key to establish this theory system .The objective is the motion guide. The reasonable objective can indicate correct direction for the city government managing the real estate industry, and guide the real estate industry healthy development. Otherwise, it will impede its healthy development. The general objectives are to achieve the real estate industry development in co-ordination with urbanization process, urban economic development and urban sustainable development .the development of society, economy and environment. The following are the reasons: The first, the real estate industry and urbanization interact, and the long-term development trend of the real estate industry synchronizes with the urbanization process. So, the development of the real estate industry must co-ordinate with urbanization process. The second , the real estate industry gives impetus to urban economic development, and urban economic development requires the real estate industry developing at a corresponding rate. Therefore, the development of the real estate industry must co-ordinate with urban economic development. The third, the present development of the real estate industry contradicts urban sustainable development, and the ecological ideal target of urban development requires the present development of the real estate industry co-ordination with urban sustainable development.3. Research on the methods is the important content to establish this theory system .After the general objectives are decided, we need study what methods to be used to achieve them. The city government can use four basic methods: urban land utilization plan, urban land reserve management, supervising the real estate speculation and providing city housing safeguard. First of all, the real estate development is easily affected by market mechanism and driven by partial and local interests, developers often only concern economic benefits of enterprises and land, and ignore the whole region interests and the overall interests. Therefore, it is necessary to regulate and restrict the real estate development. Secondly, when the market fluctuates unusually, by urban land reserve management, the city government can change the supply of urban land to regulate and control the real estate market. In addition, the real estate market is easy to appear speculation behavior. The city government can use monitor method to judge the degree of the real estate speculation, and control speculation directly and indirectly by economic, administrative and legal means. So, it can prevent and control the real estate bubble. Finally, the city government provides city housing security to ensure the real estate distribution relatively fair between high-income and low-income citizens.4. Research on specific effects is the indispensable constituent to establish this theory system .After we determine the reasons, objectives and methods, the last task is to evaluate the effect of the city government managing the real estate industry: whether and how degree the city government achieves its objectives. While the city government manages the real estate industry, a certain cost occurs, including the city government invest, society cost and opportunity cost. At the same time, economic benefit, social benefit and environmental benefit also are produced. The effect depends on contrasting benefit and cost. But some cost and benefit can't be measured by money, so there is necessary to establish an effective evaluation system to measure the effect. Previous analysis tells us the development of the real estate industry in co-ordination with city development is the objective. So, to quantitatively evaluate the overall effect, we can use the evaluation system of the real estate industry and city co-ordination degree.Empirical analysis shows that in recent years, the effect of Chinese the city government managing the real estate industry is poor. The reason is improper management of the city government. It specifically includes the followings: Firstly, the city government uses its administrative power to maximize their own economic and political interests. That is management dislocation. Secondly, the city government interferes in normal functioning of market mechanism. That is management offside. Finally, the city government doesn't regulate the real estate speculation and secure the housing of low-income citizens. That is management vacancy. Above questions are caused by four deep-degree reasons: firstly, distorted values of the city government; secondly, misunderstandings about the city government managing the real estate industry; thirdly, imperfect management system about the real estate industry; fourthly, deficiencies existing in management institution about the real estate industry.In view of these questions and reasons, this paper puts forward measures to improve Chinese the city government managing the real estate industry. First, the city government should strengthen the self-construction, including correcting the management philosophy of the city government, accepting the theory of the poor economics, improving the achievements concept of the city government, defining the management functions of the city government. Second, we must perfect the real estate management system. A new management system about the real estate industry is designed in accordance with the decentralized management, power and obligation being equivalent, and the community participating in supervision. Finally, we should improve the real estate management institution, including improving urban land distribution, urban land use planning, agricultural land requisition, urban land supply and city housing security system.Conclusion: The city government managing the real estate industry is inevitable. The objective is to promote the development of the real estate industry in co-ordination with city development. To achieve it, the city government can use urban land utilization plan, urban land reserve management, supervising the real estate speculation and securing city housing. And to measure management performance, it can utility the evaluation system of the real estate industry and city co-ordination degree. In recent years, the effect of Chinese the city government managing the real estate industry is poor. The direct reason is improper location of the city government management. The deep-degree reasons include: distorted values of the city government; misunderstandings about the city government managing the real estate industry; imperfect management system; deficiencies existing in management institution. The measures to improve Chinese city government managing the real estate industry include: strengthening the self-construction, perfecting the management system and institution about the real estate industry.