The General Office of the State Council, China's Cabinet, issued a guideline document clarifying institutional and policy support for the development of government-subsidized rental housing from the land, examination and approval, taxation, financial and other aspects.
Such low-income rental housing, often no larger than 70 square meters per unit, aims at solving the housing problem of new residents, young people and other eligible groups, by providing housing at rents lower than the market rate. The clear definition of the target groups, rent level and area bodes well for increasing the supply of small, low-rent housing.
According to the seventh national census, China's floating population reached 376 million in 2020, up nearly 70 percent over the past 10 years. China's housing problem has already evolved from overall supply insufficiency to structural shortage, which is concentrated in big cities with huge population inflows.
Solving the housing problem for people seeking relatively low-rent housing can avoid the crowding-out effect of high housing prices on consumption, help stabilize people's housing market expectations, and promote the steady and healthy development of the real estate market.
Since 2019, the Ministry of Housing and Urban-Rural Development has launched a pilot project to improve the housing security system in 13 cities with a focus on the construction of small and low-rent housing. The difficulties these cities encountered in procuring land, planning, examination and approval, as well as in balancing operating income and expenditure, highlight the urgent need to introduce preferential policies at the national level.
Different from earlier housing security models, the State Council document attaches more importance to giving preferential policies for the establishment of a "multiple-investor, multiple-supply channel" affordable rental housing pattern, to promote the transformation of the government-dominated supply pattern to one that is jointly participated in by the government, enterprises and social forces, and the transformation of the service targets from local residents with hukou, or household registration system, to all permanent residents.
A series of preferential policies, such as reasonable land, water and power prices, simplified approval procedures, financial supports and fund subsidies will provide a strong guarantee to solve the shortage of construction funds and reduce the construction and operation costs of affordable rental housing. Guided by the document, all localities, especially big cities, are expected to actively expand the supply of affordable rental housing, alleviate the structural shortage of housing supply and work toward realizing the goal of housing for everyone.
