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Multibillion yuan budget for low-rent housing program


China plans to earmark 6.8 billion yuan ($951 million) in its 2008 budget to build low-rent houses for urban poor, Premier Wen Jiabao said Wednesday.

The amount is 1.7 billion yuan ($238 million), or 33 percent, more than last year, Wen said in his report to the First Session of the 11th National People's Congress that opened at the Great Hall of the People in central Beijing.

Local governments are required to increase funding in this area, he said.

The government will also build more affordable houses and tighten the management on them to ease housing difficulties of low-income urban residents, and improve the living conditions of rural migrant workers in cities, the Premier said.

A set of tax, credit and land supply measures will come out to increase supply of reasonably priced housing, curb demand for high-end housing and prevent overheating in housing prices, he said.

Provided that China has a large population and relatively little land available, Wen said the country has to turn to small- and medium-sized condominiums that are environmentally friendly to conserve energy and land.

More land will be provided for such projects, he said.

"We must ensure that the government and the market both play their due roles," the Premier said.

The government will give priority to housing for low- and middle-income families while housing demand among high-income families will be met largely through the market, he said.

Attempts to hoard and speculate land and houses will be watched by the authority, he said, "We will deal with violations in accordance with the law."

China's housing prices have soared over the past few years. The average property price in China's 70 large- and medium-sized cities in last December were up 10.5 percent from the same month of the previous year, while in Beijing it was up 17.5 percent, according to the National Development and Reform Commission (NDRC) in January.

A recent online opinion poll by Xinhuanet.com indicated that housing price hike was among the "topics of most concern" of Chinese netizens.

"I am frugal in everything, but the dream of owning a house is far, far away," said a netizen named "Wen Fan" who participated in the opinion poll.

Saving half of his 4000-yuan ($563) salary each month, he still needs 40 years to buy a single-room flat in Beijing as the price for most of its newly-built apartments hit 10,000 yuan ($1,408) per square meters. If he applies for loans, it will still take another 20 to 30 years for him to pay all the debts given his financial situation.

"I am just like a slave for the flat. It feels like the meaning of my whole life is to fulfill the dream of owning a flat," he wrote in the bulletin board of the Website.

For migrant workers in cities, the situation is even worse. Kang Houming, one of the three migrant workers who were elected as deputies to the top legislature for the first time, recalled his living situation when he was a migrant worker in Guangdong Province ten years ago.

"At night, sometimes I had to hide in the hill or climb on the tree for a shelter, because I could barely afford to rent a flat, let alone buying one without a residence permit," said Kang, from southwestern Chongqing Municipality.

He hopes the government could provide more low-rent housing for migrant workers in the future since "what they want is just a safe and comfortable nest in cities after years of hardships."

NPC deputy Jiang Ming said the increasing budget for the low-rent housing program showed a responsible government's determination to put people's interest first.

"Housing is not a common commodity, but a necessity bearing the basic interests of the public. To gear up low-rent housing program nationwide is a crucial step to ensure everyone a home," said Jiang.

Du Mei, a political advisor, believed that the low-rent housing program is also one of the important macro-control measures to curb the housing price surge.

"I reckon the central government has got the key point and has a very clear conception of the government's position in addressing social issues," said Du.

Zheng Zukang, a political advisor and professor at Fudan University,agreed. "The low-rent housing program could be a remedy to cure the rising housing price, since it could prevent the "forced housing consumption" practiced by those who have no place to live in," he said.

Figures from the Ministry of Construction (MOC) revealed that the low-rent housing program had helped 950,000 low-income urban families nationwide to improve their living conditions by the end of 2007.

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