From "Developer-Provided Construction" to "Government Coordination and Diversified Supply," Shenzhen's affordable housing supply logic has undergone a major shift!

On March 1, the Shenzhen Housing and Construction Bureau and the Planning and Natural Resources Bureau jointly issued the “Notice on Further Standardizing Matters Related to Urban Renewal Project Management” (hereinafter referred to as the “Notice”), which will take effect from March 16, 2026, with a validity period of five years.

According to the Daily Economic News, the core breakthrough of this new policy is a complete overhaul of Shenzhen’s affordable housing supply system, shifting from the long-standing “developer-built” model to a “government-led, multi-channel supply” approach.

The Notice states that for urban renewal projects that have not completed planning approval, the bonus floor area for affordable housing will be canceled, and in principle, affordable housing may not be required to be built.

Subsequently, the sources for securing affordable housing will be coordinated through new construction, revitalization of existing buildings, multi-channel acquisitions, and other methods by relevant departments.

Previously, Shenzhen’s urban renewal projects always enforced a mandatory affordable housing requirement, requiring old renovation projects without approved planning to allocate a certain proportion of units for affordable housing.

While this requirement effectively increased the supply of affordable housing, it also significantly increased developers’ financial pressure and development costs. In recent years, many old renovation projects in Shenzhen have faced the dilemma of “not balancing the books,” ultimately leading to stagnation.

According to He Yi Urban Renewal statistics, as of December 8, 2025, Shenzhen had planned to withdraw, invalidate, or decommission a total of 38 urban renewal projects involving approximately 3.21 million square meters of demolition. Among these, the city planned to withdraw, invalidate, or decommission 17 projects in 2025.

This time, Shenzhen’s new policy has optimized the requirements for the construction of affordable housing.

The Notice mentions that old renovation projects that have completed planning approval will still follow the original requirements for affordable housing; projects that have not completed planning approval will generally no longer be required to build affordable housing, only needing to meet the relevant standards of the “Residential Project Code.”

So, after lowering the threshold for mandatory construction, how will the gap in affordable housing supply be filled?

The new policy provides a clear answer: through new construction, revitalization of existing stock, multi-channel acquisitions, and other coordinated efforts.

In fact, Shenzhen has already begun relevant practices. In January 2026, Shenhuitong Group under the Nanshan District State-owned Assets Supervision and Administration Commission acquired a whole apartment building, Greenland Baishizhou Jingting, for 700 million yuan. Industry insiders expect it may be renovated into affordable rental housing, making it a typical case of state-owned enterprises acquiring and storing existing stock.

In addition to the shift in supply models, the new policy emphasizes proactive government action, implementing a combination of measures to accelerate old renovation projects.

At the planning level, for old renovation projects revitalized through “clear and transfer” methods, re-planning or partial adjustments to approved plans are allowed, with land transfer rates aligned with the new policy, simplifying approval procedures; at the financial level, encouraging financial institutions to provide loans and acquisition financing to ease developers’ funding pressures, and supporting financial asset management companies to revitalize stalled projects through asset restructuring and bankruptcy reorganization.

The Notice also mentions that projects converting old industrial zones into affordable housing will still follow the original requirements for affordable housing construction.

Some industry insiders believe that Shenzhen’s new policy is a specific implementation of the central economic work conference’s clear directives to “control growth through city-specific policies, reduce inventory, optimize supply,” and “encourage the acquisition of existing commercial housing mainly for affordable housing.”

“With the decline in commercial housing prices, for some old renovation projects, the current break-even calculations for developers may become unbalanced during the renovation process, or even lead to losses. Therefore, shifting to a ‘government-led, multi-channel supply’ approach can reduce renovation costs, boost developers’ enthusiasm for participation, and also help reduce inventory and stabilize the housing market by revitalizing existing stock,” said Li Yujia, Chief Researcher at the Guangdong Housing Policy Research Center, in an interview on March 3.

Li Yujia stated that after the implementation of this new policy, it will effectively reduce developers’ renovation costs, boost participation enthusiasm, and promote the high-end development of old renovation projects.

“The progress of old renovation depends mainly on the trend of the commercial housing market, especially the stability of sales volume and prices in the area; it also depends on whether the renovation can be carried out in a block-based manner to enhance the area’s value. Additionally, whether the principle of lawful expropriation can be implemented to reduce compensation costs is crucial,” Li Yujia added. Compared to lowering the requirements for affordable housing construction, these factors are more critical for advancing old renovation projects.