Affordable Housing in China

According to the Wiki, affordable housing is housing deemed affordable to those with a median household income as rated by country, state (province), region or municipality by a recognized Housing Affordability Index. Considering the Housing Affordability Index, it is quite easy to get the conclusion why China’s central government puts so much efforts in the development of affordable housing. Because of the booming population combined with, to a certain extent, limited land resources, housing prices are rising higher and higher. And that makes affordable housing out of reach for a large amount of low-income people.

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When we talk about affordable housing in China, what are we thinking? Instead, there are three words you should keep in mind. Which is, the Affordable Housing Program, low-rent housing and public rental housing.

The Affordable Housing Program, or the Economical and Comfortable Housing Program is designed to provide affordable housing to those with middle or low income to encourage home ownership. Based on my experience, the impact of this program is not that ideal. In another words, this program is controversial due to poor administration, widespread corruption and improper use. Take the length of post into account, I am not going to explain in depth.

Low-rent housing, refers to housing subsidies in the rental sector to low-income households with housing difficulty. To be specific, firstly, the public housing is provided by government with government controlled rents. Secondly, low-income households who rent private housing on the market will get monetary subsidies. Thirdly, there is a rent reduction for households who already live in public low-rent housing. Although this program did get some positive results, it was still limited under the existing public finance system. From my perspective, the local government can not commit funds to low-rent housing because it takes a small share of budgetary revenue but shoulders the majority of expenditure.

As for Public rental housing, it is rental housing provided by either public or private agencies with government controlled rents. Compared to low-rent housing, the limits are fewer. its targets are mainly middle or low income households with housing difficulties, new employees, and qualified migrants in cities. Different from the previous programs, this program get increasingly focus in China. Although there are some concerns regarding funding and land use problems, I am stillI quite optimistic about this program. My hometown, Chongqing, played an important role in promoting this program. I was proud to say the outcome is pretty good as the first stage.

But as a citizen, I do have some thoughts about the improvements. In my opinion, public rental housing should plan to expand the coverage. Maybe it is a better way to replace economical and comfortable housing with public rental housing. In addition, the private agencies and government should fully consider the needs of middle and low income households before making an decision, like site selection.

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