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Duan Bingde

Suggestions on promoting affordable housing construction by means of PPP model


By Meng Chun, Department of Macroeconomic Research, DRC; Wang Jingsen, Research Institute for Fiscal Science, Ministry of Finance

Report No 128, 2014 (Total No 4627)


China is now undertaking arduous work in affordable housing construction with great financial burden so it needs to conduct financing innovation and use the PPP (public-private partnership) model, a government service or private business venture that is funded and operated through a partnership of government and private sector companies to get social capital involved.

The PPP is feasible for China's affordable housing construction for the following reasons: favorable policies, good operation basis and relative stable investment return.

The report proposes the methods of build-operate-transfer (BOT), build-operate-sale (BOS), real estate investment trust (REITs) and housing cooperatives for newly-constructed public rental housing. It also proposes purchasing and storage for some unused housing and the establishment of a PPP guide fund mechanism for affordable housing.

Many other measures, including working out relevant laws and regulations; improving land, fiscal and financial policies; and setting up a PPP coordinating organization could be conducive to promoting affordable housing construction.