Amid China’s economic downturn and continued real estate slump, the Chinese Communist Party (CCP) has introduced a mandatory “Residential Project Standard,” requiring new residential buildings to have a minimum floor height of 3 meters and installing elevators for buildings with four or more floors. There has been widespread online questioning and criticism, with concerns raised about how existing homeowners will cope. Experts have revealed four underlying intentions of the authorities, suggesting that the new regulations will lead to a new round of turmoil and construction halts in the real estate industry, accelerate urban space class division, and further burden local government debt.
On March 31, the CCP’s Ministry of Housing and Urban-Rural Development released the so-called “National Standard” for Residential Projects. The main standards include: 1. New residential buildings must have a floor height of at least 3 meters, up from the previous 2.8 meters. 2. Buildings with four floors or more must have elevators. 3. Improved sound insulation of walls and floors. 4. Increased passage width of house doors and bathroom doors. 5. Increased height of balcony railings in open spaces.
The “Standard” will come into effect on May 1, with officials stating that it is a mandatory construction standard that must be strictly enforced.
Several state media outlets have referred to this as the “national standard for good houses.”
During the annual sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference in March, the CCP government work report mentioned “good houses” for the first time, emphasizing stabilizing the real estate market. Minister of Housing and Urban-Rural Development Ni Hong mentioned that the ministry has recently been working on formulating guidelines for “good houses” construction and revising residential project standards.
Many netizens have expressed skepticism, questioning the fate of existing houses under the new standard and suggesting that more affordable housing should be prioritized over these regulations. Some have raised concerns about the impact on the second-hand housing market, highlighting potential difficulties faced by existing homeowners.
“Middle-class Mr.” posted online, noting that the trend in the property market is shifting towards trading volume for existing homes and a lack of demand for new properties. With the introduction of the new standards for “good houses,” buyers may lean towards newly constructed properties meeting these standards rather than purchasing second-hand homes, potentially leading to challenges for existing homeowners in selling their properties.
Beijing intellectual Lao Zhang told reporters that these new regulations are likely to increase developers’ costs, which will ultimately be passed on to homebuyers. He suggested that the authorities could advocate for certain standards rather than impose rigid requirements, allowing developers to choose based on market demand.
In an interview with the Epoch Times, American economist David Huang expressed skepticism about Beijing’s motives behind the regulations, suggesting that while they appear to focus on improving housing quality, their essence lies in strategic control of policies and resource allocation. He outlined four deep intentions behind the new standards.
The first intention is to segment the market and eliminate small developers, reshaping the industry. The CCP aims to raise the threshold using the new standards, prompting under-capitalized and technologically lagging small developers to naturally exit the market, leaving only state-owned enterprises and local SOEs as the main developers. The requirements such as “3-meter floor height, mandatory elevators” could be a fatal blow to small developments in third and fourth-tier cities with strict cost controls. Beijing aims to centralize the supply of future urban residential properties in the hands of large state-owned enterprises it deems trustworthy.
The second intention is to steer demand towards central urban areas and the public housing system. The new standards could make it difficult to sell large amounts of land and previously subpar small housing units in third and fourth-tier cities. This is intended to redirect demand back towards first and second-tier cities, core areas, or government-dominated public housing systems. It aims to reintegrate freestyle civilian housing demand back into the national system.
Thirdly, this represents a policy discourse reversal: from “speeding up projects” to “guaranteeing quality,” reshaping the official narrative of confidence. As China’s real estate market grapples with systemic trust collapse, this policy offers a kind of “false hope”: “Look! We’re not just rushing projects; we’re also improving living standards!”
Huang stated that this is part of Beijing’s narrative engineering project, attempting to quell voices calling out “abandoned projects” and rights protection movements by overshadowing the real challenges with institutional promises.
He emphasized that the significance of the new CCP regulations lies not in actually improving housing quality but in creating a governance illusion and diverting public opinion. This demonstrates a typical manifestation of “institutional hypocrisy.” However, having high institutional standards does not guarantee implementation. Under the CCP system, having laws to follow does not equate to enforcement. Despite having regulations prohibiting fund misappropriation in presales, there are still many unfinished projects. Regulations claiming to safeguard “transparent pricing” rely heavily on personal connections and informal rules. He questioned whether the authorities can ensure that the quality matches the promises of “mandatory elevators and 3-meter floor height.”
Moreover, he pointed out that the fourth intention is for the central government to reclaim the power over building standards and development pace that was previously in the hands of local authorities, consolidating the approval authority for residential development to central authorities (Ministry of Housing and Urban-Rural Development) and the Central Technical Specification Committee.
An analysis by Huang suggests that the introduction of these national standards will lead to a new round of turbulence and construction halts in the real estate industry in the short term. Many existing projects may be scrapped or require reevaluation, leading to slower construction and more delays in project completion. Real estate companies will incur additional costs, but sales are unlikely to improve, further worsening their debt pressures.
“In the medium term, this will accelerate urban spatial class division. The high standards will indirectly squeeze the affordability of housing for the middle and lower-income groups, exacerbating the spatial division between the rich and the poor. Many housing options previously accessible to migrant workers and ordinary citizens may no longer be available due to the new standards.”
He pointed out that in the long run, local governments may need to invest more in infrastructure and provide more land subsidies to state-owned enterprises and real estate developers to comply with the new standards, ultimately draining local finances and increasing the burden of local government debt.
Under the CCP’s rule, there have been frequent reports of shoddy construction projects, and waves of rights protection movements. Huang stressed that shoddy construction projects and supervisory corruption are the true root causes. “The problem is not whether the standards are high or not but who will oversee them? Who can prevent developers from cutting corners? Without civilian oversight and press freedom, even high floor heights cannot fill the void left by conscience.”
“In summary, this is not about ‘building good houses for the people’ but about reshaping the discourse logic of power, reallocating market shares to state-owned enterprises, and providing excuses for local governments,” he concluded.
Taiwanese financial expert Huang Shicong told the Epoch Times that while the public naturally desires to live in good houses, the authorities aim to stimulate the overall real estate market by introducing such regulations, believing it could boost the real estate sector. He noted that with China’s struggling economy largely impacted by the real estate sector, such policies are introduced to support the real estate market.
However, Huang Shicong expressed doubts about the feasibility of the policy given the limited purchasing power of the public. He believes that the effectiveness of the policy will only be observed after implementation and is not very optimistic about its outcomes.