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September 6, 2010

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Developers seek better policy support for low-rent buildings

SEVERAL builders and operators of special apartment projects are calling for better policy support to attract more high-end professionals from overseas to Pudong New Area.

Though professionals are charged lower rents for such apartments, builders and operators still have to pay high fees for public utilities and tax on rental income as though it was an ordinary commercial building.

Lujiazui Group, a project operator said for the past few years, an apartment complex that they have invested in and operated has been charged as if it was a hotel by the electricity company.

This means it pays a higher fee for electricity compared to ordinary households.

Higher fees are charged for public utilities at other low-rent apartments built on former factory sites due to the land being classified for industrial use.

Operators said these factors have prevented them from keeping rents low and attracting more professionals as planned.

However, a recent government paper stated that low-rent apartments should pay the same fees as ordinary households for public utilities.

The Pudong government is now working to identify low-rent apartments and offer lower fees.

However, the city still lacks special policies on low-rent apartment construction and operation.

"The low-rent apartment is mainly for transitional use, which should have different construction requirements from ordinary household buildings," said a government paper produced by the Pudong Construction and Transportation Commission.

Low-rent apartments for professionals do not need to reach the ordinary household building's requirement for sunlight and parking space, according to the paper.

However, the lack of special criteria has caused difficulties in the design and approval of such apartments.

In response, the Pudong government is researching the issue.

The government has built or started construction of 1.5 million square meters of low-rent apartments for professionals since the policy was first introduced in Pudong in 1995.

Current needs are estimated at 4.3 million square meters.


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