The CCP recently introduced a significant “housing reform” program, outlining a dual-track system primarily focusing on affordable housing to resolve housing market issues. The policy, titled “Guiding Opinions on Planning and Constructing Affordable Housing,” emphasizes two goals:
- increasing the construction and supply of affordable housing in major cities, and
- limiting investment-oriented commercial housing.
The policy stipulates that 60% of the housing market be allocated to affordable, public rental, and low-cost housing (保障性住房, affordable housing), and 40% be designated as “improved housing” housing (改善性住房, commercial housing). The policy targets three main groups as recipients of affordable housing: low-to-medium-income earners, new graduates, and “talented persons” recommended by the government for housing. Affordable housing is restricted to one unit per applicant, and it is forbidden from being turned into commercial housing. The reform aims to repurpose unused land and commercial housing inventory.
Beijing will carry out the housing reform in cities with over 3 million residents. There are 35 such cities in China, including Beijing, and Shanghai.
Some have raised concern over potential consequences of this policy:
- it may put additional pressure on China’s commercial real estate market, pushing more real estate developers to bankruptcy;
- it may result in financial loss for Chinese investors, who are heavily invested in real estate; and
- China’s local governments may not have sufficient money to fund the development of affordable housing.
Source: Epoch Times, November 10, 2023