Shanghai, Chongqing housing 'New Deal' deserves affirmation
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Almost all provincial and municipal officials at two annual sessions of the National People's Congress (NPC) and the National Committee of China's advisory body have been asked by media both at home and overseas on a very sensitive topic of housing prices.
Shanghai Party Secretary Yu Zhengsheng could not help but sighed and said in early 2009 that housing prices could rise no more. This Shanghai Party Secretary claimed at the current third sessions of the 11th NPC and the 11th National Committee of Chinese People's Political Consultative Conference (CPPCC) that he had not only viewed a hit-TV series called "Woju", or "A Snail's House", a Chinese version meaning a "humble abode", but recommended to all cadres at meetings to watch the TV series, as he noted, "housing situation is good for most of them, without necessarily having the first-hand experience with housing shortages.
Yu's sighs, however, cannot stem the housing prices "fever" or hike in Shanghai: Housing prices in this municipality rose by 40 percent in 2009, relevant date indicated. So, the Party Secretary was so troubled because runaway housing price has become the bottleneck of the city's talent strategy. Housing prices are too high, and people cannot afford housing, and then who will come to work in Shanghai?
From this perspective, a lot of provincial and municipal decision-making social sectors simultaneously introduced their "New Deals" designed to expand the coverage of social security realm and enlarge protective house species.
As for protective houses, they were mainly the affordable houses, which once made people elate and hate at the same time and even with more hatred than affection. As the right to own affordable housing can be purchased at low prices and sold out at higher prices and, once this right is materialized, it could mean be huge profits – a congenital weakness, to make it into a seam of the "egg".
Minister of Housing and Urban-Rural Construction Jiang Weixin voiced both his anger and resolve to media on Monday, March 8th, pledging never to allow those driving a Mercedes –Benz to live in fittest affordable houses. As a result, some areas begin trying to bypass the "seam of the eggs" and introducing low-cost housing and public rentals on a large-scale.
For example, Chongqing and Shanghai, despite their huge population pressures, turn their eyes to public rentals. Chongqing Mayor Huang Qifan told media on March 5 that his city would build 20 million square meters of public rental in 10 years, including 10 million square meters in the next two to three years. On Sunday or March 7, Shanghai Mayor Han Zheng disclosed in an interview at People's Daily website his hope that the ratio of housing of the protective nature to total housing space in his metropolis would rise to 60 percent, and the total housing to launch this year in society as a whole would reach 20 million square meters, including 12 million square meters of the protective nature, and public rentals were also to be sprung up in 18 districts and counties in and around the city.
Mayor Han portrayed the fine, amazed prospects: The old urban area in Shanghai would be rebuilt or transformed for local residents to help resolve their housing issue; affordable houses built for new residents and junior or young white-collars, public rental for migrant workers from rural areas and different kinds of people, who have just started to work.
Then, can such initiatives achieve the effect of stabilizing house prices? This is not necessarily so optimistic nevertheless. Even Minister Zhang maintains that there is an immense pressure on housing prices over the next two decades. Those initiatives similar to those taken by Chongqing and Shanghai municipalities are mainly for social strata of low-income earners, who are not at all the strength to boost the housing prices. From a long-term point of view, however, if local governments peg or link rich land transfer prices to the investment policy of guaranteed housing, it is of significance to some extent to containing the non-rational rise of housing prices.
To say a step backward, even if this is temporarily helpless in stabilizing housing prices, the detailed survey of low-income groups done by the government and its layered efforts to resolve the housing difficulties should also be encouraged.
The housing needs of commoners in China have experienced a drastic turn from a planned to market economy and part of the planned supply has been almost non-existent to date. At present, to resume part of a modest recovery of public rental, low-cost housing supply and to ensure the vulnerable groups their home ownership by capitalizing on an integration of planning and marketing - comply with China's present level of economic development and is also the home-coming of the government functions.
