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How to evaluate the compensation price for house demolition
Home page >> Business areas >> Illegal construction
Article author：Yingting Lawyers Group | Update time：2022-11-10 | Reading times：1320
With the development of urban construction in our country and the improvement of people's material and cultural living standards, some old urban supporting facilities and functions no longer meet the needs of urbanization development. The transformation of old cities will surely become an important issue in a certain period of time. The government will also inevitably promulgate a series of laws and regulations related to urban house demolition. The new "Urban House Demolition Management Regulations" proposes monetary compensation for demolition, which is a big step forward in the transformation of old cities in my country and is also a major measure in my country's demolition reform. However, how do appraisal agencies and appraisers rationalize the appraisal of house demolition? How do demolishers compensate the demolished people? This is a problem that needs to be solved in our house demolition work.
1. There are mainly the following problems in the demolition assessment:
1. Problems with valuation methods
At present, most urban real estate demolition assessments use benchmark prices combined with coefficients such as newness, location, and street frontage to comprehensively determine the demolition price. This calculation method is inconsistent with the spirit of the "Urban House Demolition Management Regulations" and the "Real Estate Valuation Regulations." First of all, this is because the price of a house is determined by the market. It is not only affected by the inherent tangible factors of its physics itself, but also affected by many factors in the market. The latter is often more influential than the former. For example: the influencing factors of the surrounding environment of real estate. The same real estate is in the same location, but it does not mean that the surrounding environment is the same. This is determined by the characteristics (individuality) of the real estate. Therefore, it is unconvincing for us to only use the benchmark price to measure the real estate market price. Secondly, the origin of the term "base price" cannot be found in the "Real Estate Valuation Regulations", let alone the basis and scientific nature of its calculation.
2. Problems in determining the benchmark price of houses
The calculation of the benchmark house price is first determined by the government to identify the valuation agency, and then the agency makes the calculation, and then the government works with relevant departments to confirm the calculation results. In fact, it is still a government behavior and cannot get rid of government intervention. Therefore, the benchmark price of housing is not a market behavior and cannot accurately reflect the changes in market housing prices. There are even behaviors of the government and its departments deliberately lowering the benchmark price.
3. Problems with house demolition compensation prices
(1) The land compensation price is not truly reflected. The current house demolition compensation price in some cities is combined into a newly derived house demolition compensation price. The final result can only reflect the inherent tangible state price of the house itself to the greatest extent, but cannot accurately reflect the economic utility value brought by this housing entity, let alone the price of land, an intangible asset. Of course, this final result generally reflects the conclusion that the compensation price is low. Failure to fully consider factors such as the floor area ratio and building density of real estate and the rational use of land. Instead, the replacement price of land and houses is combined as the benchmark price, and is calculated based on the building area of the house. The result will inevitably lead to the myth that land of the same quality, quantity and price has a high floor area ratio, and land with a high building density has a higher land price; (2) Government departments intervene more, and some local governments even lower prices and costs to reflect their political achievements, defrauding the people, harming the people, competing with the people for profits, and damaging the government's image.
4. Problems in identifying the nature of houses
Since my country's laws and regulations related to real estate lag behind those of some demolished houses, it is really difficult to complete them and improve the relevant procedures. However, some cities blindly emphasize the completion of procedures and are rigid and dogmatic in determining the nature of houses, without considering the actual purpose and use value. The end result is a lack of respect for history and a failure to reflect the objective fact that housing can bring greater benefits.
5. Problems in determining the price of resettlement housing
As we all know, resettlement houses are provided by the demolishers (usually developers), and their prices should be determined by the developers following the market. Are the demolished houses also at full market price? Of course there is a gap. First, there are problems in determining the demolition compensation price of the house. Secondly, the price of resettlement houses lags behind the demolished houses (due to the development period) and is not the price at the same time. This will inevitably lead to a lack of "fairness and fairness" between the resettlement house prices and the demolition compensation prices.
6. Problems existing in the implementation of house demolition compensation
Of course, it is fair and reasonable to first evaluate house demolition based on market price; however, there is a serious problem of two-level polarization in the urban residents' economy, especially the residents within the scope of demolition. They are vulnerable groups, most of them are laid-off workers and unemployed residents. Some are bedridden due to long-term illness, and their livelihood depends on their children and children. Residents from surrounding communities come to help. Even if their houses are very dilapidated, they can still serve as shelter from wind and rain. Once these residents are demolished, they will lose their original stable production and living order. After they receive demolition compensation, what role will this meager compensation play for them? They cannot afford to buy a small house.
2. The main reasons causing the above problems
1. There is no distinction between government and enterprise
The first manifestation is in determining the benchmark price of demolition compensation. The main evaluation unit of the benchmark price of demolition compensation is determined by the government and relevant departments, rather than obtained through the competitive market of valuation agencies; the content of the valuation needs to be defined by the government and relevant departments. This makes the benchmark price nominally the market price, but in fact it is the government-guided price. Secondly, as reflected in the confirmation of compensation prices, some governments and relevant departments engage in "image projects" for the sake of their political achievements, deliberately lowering the compensation price and reducing costs, so that projects that are difficult to implement can be implemented (such as a cultural and leisure plaza in Wuhe County, Anhui Province).
2. The market system has not yet been fully developed and is still in a stage of development.
This is because the monetization of demolition requires a large amount of real estate market transaction data. However, some cities have small real estate transaction volumes of various types and lack such real estate market information. In addition, real estate transaction information is still very irregular and is still in the hands of some departments. It is not smooth and the real estate information system has not been fully established.
3. The economic development of urban residents is still very unbalanced, and the two levels of differentiation are serious.
Most of the demolished people are disadvantaged groups. They cannot easily sell their houses to demolishers for demolition. Even if the current price of their existing houses exceeds the current price, they cannot sell them. This is determined by their most basic living security (housing).
4. There are no supporting implementation rules for the "Urban House Demolition Management Regulations", resulting in various local demolition assessment and compensation measures.
At present, the nature of land in our country is diverse. Land ownership can be divided into state-owned and collectively owned, and state-owned land can be divided into allocation and transfer. If the nature of the demolition compensation price is not considered, then the transfer of land use rights in my country will inevitably be in a stage where it is difficult to implement and will also be in a very chaotic stage. Our country's urban land use rights are a paid limited-term use system (a system clearly stipulated in the "Urban Real Estate Management Law"). However, after the expiration of the land use right, in addition to being renewable, how does the government recover it? Should the above-ground buildings be recovered together with the land for free? Or should it be recovered with compensation? These are not clearly stipulated by legal provisions, which will inevitably affect our consideration of its residual value (i.e., residual value) in the evaluation of real estate demolition compensation prices, and it is impossible to measure the decrease in its value.
3. Suggestions
1. Improve relevant supporting documents and determine scientific valuation methods
In determining the benchmark price, the "Real Estate Valuation Regulations" should be used as the basis; in determining the use nature of the house, the actual use and use value should be fully considered; in terms of valuation methods, the "Real Estate Valuation Regulations" should be used to determine the valuation technical route.
2. Strengthen the supervision of housing appraisal activities and build an excellent appraisal team
Assessment agencies and evaluators should obtain it through market competition, rather than making mandatory identifications. Government departments should cooperate and jointly manage the results. Even if the demolition assessment conclusion is recognized, the actual difficulties of disadvantaged groups should also be considered. Only in this way can the demolition be carried out smoothly and construction projects that are beneficial to the people and the country can be well implemented.
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