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Home truths for low-cost housing

By Hou Liqiang (China Daily)

13:14, July 23, 2013

This room in the Dongshengyuan Apartment Building near Beijing's Wudaokou area is a typical shared unit that often houses seven or eight tenants. hou liqiang / China Daily

Problems rooted in disparity in demand and supply of cheap accommodation

When Ji Xiang leased his small Beijing apartment near the Shuangjing Subway Station in early spring, it was a standard two-bedroom flat with a living room, kitchen and bathroom. Today it is more like a hostel, housing up to 24 tenants.

Bunk beds line the walls in almost every room, each available to rent by the month.
"I'm a fresh graduate myself, so I know how difficult it can be searching for a job and a home," said Ji, who left college this year with "a Web-related degree" and has a full-time job at an Internet cafe.

He said he struck on the idea of investing in a dozen beds after seeing how his relatives had supplemented their incomes by subletting.

In Ji's opinion, he is helping the capital meet the massive demand for cheap accommodation. Only recently did he learn that cramming so many people in one place violates multiple city regulations on housing, and health and safety.

He is not the only one doing it, either. A search for "bed rentals" — the Chinese term for such properties — produces more than 25,000 postings on and about 7,000 more on, both major classified advertising websites in Beijing.

Official data support Ji's claim about a disparity in supply and demand. According to the National Bureau of Statistics, the capital has almost 8 million nonnative residents (people without hukou, or permanent residency, who stay six months or more). Yet the municipal public security bureau said in June last year there were only 1.39 million rental properties.

Part of the pressure on the rental market has come from Beijing's measures to cool property prices, introduced in May 2010, which included a ban on non-hukou holders purchasing homes unless they have paid social security or income tax in the capital for at least five consecutive years.

As a result, roughly 81 percent of nonnative residents of Beijing have no option but to rent, estimated Hou Jiawei, director of Population Development Studies Center of Renmin University of China.

Naturally, this has led to a spike in rental prices.

The NBS reported a rise of 6.2 percent year-on-year in June, while Li Junfu, deputy director of Beijing University of Technology's sociology department, said the increase had been "50 percent over the last three to four years".

Data compiled by real estate agency Homelink and cited by Beijing Youth Daily put the average cost of a one-bedroom property inside Fourth Ring Road today at 4,500 yuan ($733) a month. However, that is only 246 yuan less than the average starting monthly salary for this year's crop of graduates, according to a study by Zhaopin, a major recruitment company.

Young people with low salaries and new graduate jobseekers on tight budgets "will automatically gravitate toward shared housing if they don't want to live in the suburbs", Li said.

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