Housing for the people

(China Daily)
Updated: 2007-02-27 07:17

Property prices keep soaring despite repeated central government pledges to provide affordable housing to the people, putting policymakers to a major test.

As a sign of the authorities' renewed determination to control housing prices, Vice-Premier Zeng Peiyan pledged at a recent State Council meeting to offer more real estate for sale and provide more and better housing to low-income families.

The stance of the central government is clear, but policymakers seem short of effective measures to ensure that their policies are carried out locally.

Zeng has rightly urged big cities, such as Beijing, to channel more funds into low-rent housing and standardize the construction, sale and distribution of affordable housing.

Through this intervention, low-income families will, hopefully, gain access to affordable housing a clear responsibility of the government.

But even such well-meaning measures can go awry, as the distribution of the current affordable housing shows. Many rich people have managed to occupy housing that was constructed for low-income families.

Beijing has promised to build 10 million square meters of low-cost affordable housing in the next three years. The city will begin building 300,000 square meters of low-rent housing this year. Hopefully, other big cities will follow suit.

How to plug the loopholes to ensure that those who really need the housing get it will be no less a task than building the housing.

It is vital for policymakers to rein in the determination of local governments and developers to profit from the booming housing market at the cost of those in need of housing.

For example, developers have hoarded land to profit from a rising market, which then further pushes up prices.

The government has realized the problems, as Zeng has ordered a curb on hoarding land and other irregularities, such as contract frauds and bidding up prices.

But we have yet to see more practical policies to wipe out the ever-higher cost of housing.

(China Daily 02/27/2007 page10)