[photopress:real_estate_housing.jpg,full,alignright]The State Council’s latest circular on housing requires local governments to make subsidized rental accommodation available to poor families across the country by the end of 2010. Or earlier.
As well it tightens management of the low-cost housing system, a policy to provide low-cost accommodation that is subsidized by the government.
Housing under this scheme should be about 60 sq meters and cannot be resold within a five-year period.
To get that size of 60 sq meters into perspective it is worth knowing that in the United States the International Residential Code merely insists that every dwelling unit shall have at least one habitable room of not less than 11 sq meters of gross floor area and any other rooms should be at least 6.5 sq meters. And the average starter home, not apartment, in the US with three bedrooms starts at about 112 sq meters.
So the idea that 60 sq meters is desperately cramped and would not be accepted elsewhere is not supported by the figures.
Pan Shiyi, chairman of SOHO China, said. ‘The most important thing about the circular, I believe, is that government subsidies can now really go to the poor families rather than to the rich.’
Affordable housing as a concept and as a reality has been criticized for being too big and poorly supervised. Some apartments were as large as 200 sq meters. And it is said that some of the buyers drove to sales centers in BMWs and bought several apartments at once. Which is not the idea in any way whatsoever.
Wang Hongxin, a professor at Beijing Normal University, speaking of the circular, said, ‘Such measures increase supply by reducing housing size and also curbs demand through limited ownership. But the circular won’t be able to slow rising prices in the short term.’
He said the proportion of low-rent housing and affordable housing on the market determines its influence on property prices.
Although the circular stipulates the annual land supply for low-rent housing, affordable housing, and medium- and small-sized housing should be no less than 70%, the exact proportions are somewhat unclear.
Wang Hongxin said, ‘Therefore, we cannot be too optimistic about an increase in the supply of affordable housing. He also said that a lack of incentive for local governments to increase supply could also negatively affect the results.
According to Ye Tan, chief commentator on the National Business Daily, the circular will set China’s real estate sector back on track. ‘Low-income families will resort to low-rent housing, and low- to medium-income families will be able to get affordable housing while the remainder will buy standard housing.’
Guangzhou, Beijing and Shanghai, all of which have been affected by soaring real estate prices, are now actively working on the circular’s detailed rules.
Guangzhou’s mayor is planning to give a press briefing on the new circular.
Beijing’s municipal government said early this year the city will construct 300,000 sq meters of low-rent housing this year, 10 million sq meters of affordable housing and 10 million sq meters of fixed-price housing within three years.
Source: China.org.cn and research.