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UPDATED: November 22, 2010 NO. 47 NOVEMBER 25, 2010
Easing Housing Woes
A new housing law brings the hope of decent housing for everyone

ECSTASY OF WINNING: Liang Yan, from Hefei, Anhui Province, hugs her son after her family won the chance to purchase a low-cost apartment in December 2009 (XINHUA)

Local government officials will be evaluated. Those in areas where low-priced housing goals are not being met will be criticized in written notices. On the other hand, areas that have surpassed their low-priced housing goals will be rewarded by the Central Government.

Current measures

In advance of a comprehensive law, many locales have introduced measures to curb real estate speculation, a key factor driving up housing prices. For example, many cities restrict residents to buying only one or two apartments. Cities have also tightened down-payment requirements and adjusted mortgage interest rates.

Even when low-priced housing projects have been built, however, benefits have not always flowed to their intended low-income recipients. For example, a low-priced housing lottery scam was exposed last June in Wuhan, the capital of Hubei Province. More than 5,000 people applied for 124 housing units. However, individuals involved in the lottery allegedly took nearly 1 million yuan ($149,000) in bribes and arranged for six consecutive numbers to win.

In a more recent scandal, a publicized list of applicants for low-priced housing in Shenzhen, who had already received first-stage approval, included people who already owned luxury homes and couples who were both civil servants.

China Business News also reported in November that Guo Yunchong, Vice Minister of Housing and Urban-Rural Development, admitted that some low-priced housing had been distributed to civil servants as part of their employment benefits.

Taking Beijing as an example, according to a November 15 story by Southern Metropolis News, more than 70 percent of land used for residential projects in Beijing between 2005 and 2009 qualified for government financial incentives. However, only about 7 percent of this housing was sold publicly. The report said the remaining housing was mainly sold by government ministries to their employees at much lower than market prices.

Shen from Tsinghua University, who participated in drafting the new law, said the new low-priced housing generated by the law should mainly be low-rent housing. Insuring that tenants don't own the housing should prevent speculation. Shen also suggested joint ownership of affordable housing between purchasers and local governments. He also proposed expanding eligibility for low-priced housing to migrant workers living in cities.

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