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UPDATED: April 3, 2010 NO. 14 APRIL 8, 2010
Will Joint Ownership Housing Help the Less Well-off?
 
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Sharing of property ownership not only reflects the government's concern for the livelihoods of the poor, but also guarantees low-income people's housing needs. This is not an easy practice, because the public has long held a negative opinion of the government's role in the property market. They tend to believe the government is the behind-the-curtain culprit in pushing up housing prices because of dozens of taxes imposed on purchasing and selling of properties. The shortage of government housing funding and the defects in distributing affordable housing make the public suspicious of the government's intentions. In these conditions, joint ownership changes people's views of government while also smoothing relations between the government and the people.

Xiu Yangfeng (Modern Express): The most important value of joint ownership property is that it provides a new model for government efforts in guaranteeing housing needs for the low-income group. The new model will not only bring real benefits for the people, but also entitle the government to certain economic gains, which will increase government willingness to build more affordable properties for the poor. Joint ownership levers the benefits rationally—the purchaser and the local government make a joint investment in the property and share the ownership as well as the appreciated value of the property when it is sold.

The new model reminds us that in terms of building affordable housing projects, we should not only insist on the local government's obligation and investment, but also make it a stakeholder in the project and lay a solid foundation for the construction of affordable homes.

Zhao Guangrui (rednet.cn): At present, rapid development of urban commercial housing projects does not obviate the government function and responsibility to offer shelter to its people. Commercial housing projects are market-oriented and should be categorized as luxury consumption products that cannot be afforded by the majority of people. Therefore, it is the government obligation to provide various kinds of shelters for those people.

Surging housing prices are partly due to government inaction. If the government can effectively resolve the housing problems of low-income people, housing prices might come down to some extent because of the lack of demand.

It is the government obligation to rein in housing prices. The joint ownership concept proposed by the government is a good attempt. On one hand, it satisfies the housing needs of people with low incomes. On the other hand, it is helpful in controlling runaway property prices.

Not worth it

Ou Muhua (Southeast Business): The nature of so-called joint ownership property is commercial property purchased by the government. The biggest benefit of the attempt is to reduce the threshold for the people with low incomes to buy an apartment. But it might not help reduce overall property prices. It might leave a hangover if commercial housing is labeled as low-income housing. Current rules and regulations say low-income housing cannot be resold, while commercial houses can. The problems are whether the government can directly participate in commercial housing transactions, and whether developers will collude with government officials to take advantage of those projects. Local governments must think twice before they adopt the new model.

Min Baoxian (Chongqing Times): Facts speak louder than words. Joint ownership projects have had little effect in bringing down housing prices. On the contrary, during the three years of the program in Huai'an, housing prices in the city have surged. Local media reported that in major districts of the city it is impossible to find houses under 4,000 yuan ($586) per square meter. Most of the housing prices soared above 6,000-7,000 yuan ($878-1,024) a square meter.

The Huai'an Government has in effect pushed up housing prices. The trend has betrayed the original intention of the government. Therefore, the government must attach more significance to building affordable homes rather than creating various concepts such as joint ownership.

Fu Yong (Shanghai Morning Post): In cities where price-limit housing is provided, the demand for such housing far exceeds the supply as the price is much lower than the average market level. As a result, people make various attempts to get one of these houses. But the case in Huai'an City is different. The price of the joint ownership program practiced in Huai'an City is the same as the market price. On the surface, the government makes interest-free loans, but the purchasers must also shoulder a high cost themselves.

Furthermore, joint ownership housing is made upon the prerequisite that housing prices are going to increase in the future. But what if housing prices drop? The government clearly has not thought that through.

Zhang Guodong (Southeast Business): I think for most citizens living in a house that they don't own completely is not an ideal solution. Instead of various attempts like joint ownership housing, the government could take a lot of other measures to relieve people's housing burdens. For instance, it can lower taxes imposed on purchasers and prevent housing speculation. As long as a government puts its foot down in controlling housing bubbles, prices will go back to normal. At that time, joint ownership can be totally ignored.

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