Don't sell welfare housing as commercial developments

(China Daily)
Updated: 2009-11-23 11:51

Beijing will select some welfare housing projects including Huilongguan, Cuicheng and Chaoyang Xincheng for sale as commercial developments, in a bid to make up for losses incurred by their developers.

At the moment, the welfare housing project in Huilongguan has already been approved for the change. People familiar with the situation say that if the developers continue to make a loss, they may sell more welfare housing as commercial developments.

Whether or why the projects have actually suffered economic losses shouldn't be determined by the developers' claims alone. Even if they have lost money from the projects, the decision to sell welfare housing as commercial projects is still a dubious one.

At the moment, the supply of welfare housing in Beijing or other cities is still very limited, and the demand for housing affordable to lower-middle income earners has far outstripped the supply. Under this situation, to sell some welfare housing as commercial developments will certainly further squeeze its supply. This means some lower-middle income earners will never be able to buy homes.

The real estate developers may have many reasons for their losses. But allowing them to sell welfare housing as commercial property will not only deprive lower-middle income earners of the opportunities to buy homes, but also transfer the losses to ordinary people including the home buyers.

Actually, there's no connection between losses by welfare housing developers and ordinary people. Besides long construction period, cost of relocation and rising prices in materials, poor company management and lack of a strong government support can also contribute to the losses. But whatever reasons, developers and the government should take the responsibility for the losses. The shift has trivialized the welfare housing policy.

Some government departments have indicated that the change in policy will not reduce the supply of welfare housing, as they will construct more such homes. This makes people wonder about the rationality of the new policy: Why will they build more welfare projects, while selling the existing housing as commercial development?