Backgrounder: Review of China's affordable housing programs over past five years

08:56, January 18, 2011      

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Soaring property prices in China's major cities are making the dream of buying a house increasingly hard to achieve for middle and low income earners.

Despite a number of measures by the government to crack down on speculation and rein in home prices, which began in April last year, property prices are still too high for many urban residents.

Government statistics showed Monday that home prices in 70 major Chinese cities jumped 6.4 percent year on year in December, after surging 7.7 percent in November.

In an effort to allow more middle and low income residents to have access to affordable housing, the Chinese government has strived over the years to subsidize housing costs for low-income citizens in cities, pressed ahead with construction of more public rental houses, and renovated shanty towns and dangerous rural dwellings in a bid to improve people's living conditions.

The following is a review of China's efforts over the past five years in supporting its affordable housing programs, which include government-subsidized low-rent housing for the most financially difficult residents, public rental houses for those middle-income earners who can not purchase a house, and renovations of shanty towns.

In 2006, nearly 70 prefecture cities in China had not established low-rent housing programs for residents with the lowest incomes and poorest living conditions;

In 2007, China allocated 7.7 billion yuan for low-rent housing projects;

In 2008, China placed more importance on housing subsidies for low-income residents as the central government spent 18.19 billion yuan to support affordable housing projects;

In 2009, the nation's total funding for affordable housing programs reached 55.06 billion yuan. The central government also stepped up subsidy support for low-rent housing programs, especially in the less developed western regions.

In 2010, the central government budget allocated 80.2 billion yuan to fund affordable housing projects. Further, the country started the construction of 5.9 million units of affordable housing.

According to figures by the country's Ministry of Housing and Urban-Rural Development, the central government allocated 133.6 billion yuan for affordable housing projects during the 11th Five-Year Plan period (2006-2010). By the end of 2005, only 329,000 households with the lowest income in China had access to low-rent houses, but nearly 15 million urban families at present have been able to live in affordable housing.

With the deepening of China's urbanization, experts forecast another 400 million people from the country's rural areas will live in cities within 20 years, posing a great challenge for the government to address the issue of residential housing.

In the proposed 12th Five-Year Plan (2011-2015) by Chinese authorities, the country stressed additional efforts will be undertaken to construct more affordable houses in order to increase the housing supply to middle and low-income residents.

According to the Ministry of Housing and Urban-Rural Development, China plans to build 10 million units of affordable housing in 2011, a sharp increase over last year. (One U.S. dollar equals roughly 6.6 yuan)

Source:Xinhua
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