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Print Edition> Forum
UPDATED: December 27, 2008 NO. 1 JAN. 1, 2009
Affordable Housing Not Affordable
To provide more low-rent houses?
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Low-rent houses cannot totally replace affordable houses. For the time being, maybe the costs of low-rent houses are less than those of affordable housing. But in the long run, this won't be the case. As for low-rent housing, it targets the lowest-income families, and the government is responsible for all the investment. Affordable houses, however, are for sale. To scrap the affordable housing program therefore means a huge loss for the local government.

In addition, the country's 4-trillion-yuan ($586 billion) economic stimulus package has included huge investment in public housing programs. Of the planned 900 billion yuan ($140 billion), 600 billion yuan ($85.5 billion) is to be spent on affordable houses. If all local governments decide to eliminate the affordable housing program, how can the Central Government's plan be fully implemented?

Zhang Jingwei (The Beijing News): Affordable and low-rent houses are both important parts of the housing security system, targeting people in different income ranges. Low-rent housing means to help those who live with lower incomes. While reducing supplies of affordable houses, some low-income people who are not so poor as to be eligible for low-rent houses will have to spend more on housing.

As far as low-income families are concerned, at present, they can choose either affordable houses or low-rent houses. If the affordable housing system is scrapped, these cheap houses are inaccessible.

The housing security system means a lot to people's livelihoods. The government is supposed to solve the many problems in current real estate market by other policies, instead of sacrificing the low-income group's interests.

Most unsold commercial houses were built at a time of exorbitantly high house prices, when land and most building materials were relatively expensive. Developers are unlikely to sell the houses at discount, provided they are not cash-strapped.

To ensure housing security, the key is sufficient investment in the public housing program by the government. Local governments should not change relevant policies casually.

Li Ji (Chongqing Times): From the perspective of overall economic development, to remove the affordable housing program is improper.

When housing prices are low, the decision to scrap affordable houses may not pose a huge negative impact. But what if the prices rebound? Without affordable houses, low-income families who hope to have their own homes may find it more difficult to find a cheap house they used to be qualified to apply for purchase. Worse still, this will damage the Central Government's plan to expand consumer spending by building more affordable houses.

Chen Bin (www.xinmin.cn): Compared with low-rent houses, building affordable houses is not as cost-efficient. However, in the long run, the government might lose more by building only low-rent houses. It's true that the government possesses the ownership of low-rent houses. But in the case of relocation programs, the government always has to give up the property rights to dwellers.

Many local governments said that they stopped affordable housing supplies because the gap between prices of affordable and commercial houses was not big. Fundamentally, it is because local governments, which have been used to making money from land transactions, are impatient to wait for the recovery of the property market. The recessive property market is now unable to transfuse blood to the local financial department and it is also diminishing the local economic growth. To scrap the affordable housing program and expand the low-rent housing program through purchasing commercial houses are only the first of these regions' efforts to throw a lifeline to property developers.

However, compared with the huge amount of unsold houses, the government can only purchase a small fraction. Besides, most unsold commercial houses are too big and too expensively equipped for low-income earners to rent. Will the government pay for all this, or is it going to transfer all the costs to tenants who are already poor? If the affordable housing system is ruled out, the housing security system that was originally designed to benefit low-income families will become yet another tool for real estate developers to make huge profits.

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