Beijing finds way to meet rental housing demand

Editor's Note: Since the launch of the housing reform in the mid-1990s, the housing sector, including rental housing, has developed in different ways in urban and rural areas, mainly because of the availability of land, writes a veteran journalist with China Daily in the third of a series of commentaries on housing.

One of the hottest topics of discussion among young people who come from different parts of the country to work in big cities is their conflict with their landlords. Their main complaint is that the landlords increase the rent frequently and indiscriminately which they cannot afford to pay. As a result, many youths have to change houses frequently.

Housing rents in a city depend on the inflow of job seekers and demand. In many provincial capitals, a two-room apartment can be rented for 2,000 yuan ($313.70) a month, while in big cities such as Beijing and Shanghai the rent could be as high as 10,000 yuan, much more than the monthly income of a university graduate who has just joined a company. That's why, to save money, many youths share a house with one or two friends or colleagues in big cities.

But house sharing is a temporary arrangement. Once such a youth decides to get married, they have to buy or rent a house, which in many cases they cannot. High housing prices and rents play a negative role in luring and keeping talents.

Some local governments are taking measures to help the youths. In Beijing, for instance, different departments of the local government are being relocated to Tongzhou, 15 kilometers east of the city center. Also, the headquarters of some State-owned enterprises and universities have been encouraged to move out of the city to Xiong'an New Area in neighboring Hebei province. Such moves are expected to help reduce the population as well as the housing prices and rent in the city proper.

But that might take a long time, and some experts say we can't expect it to solve the problem because housing prices and rents largely depend on market demand.

Since the demand for low-rent housing needs to be met urgently, the Beijing local government has decided to offer more housing units for rent and sale. It has redesigned and refurbished some State-owned office buildings, workshops and hotels into rental housing units for the low-income group, and taken up large-scale subsidized real estate projects in suburban areas, projects that offer thousands of rent-only apartments.

Thanks to the government's favorable policies on land transfer fees and tax, such apartments are rented out to those in need at a relatively low rent－usually 30 percent lower than commercial housing. Dozens of my young colleagues have benefitted from such projects, although they need to spend an hour and half to commute to and from home to office.

Yet such low-rental housing has failed to meet the demand of the thousands of people looking for rental housing.

To address the problem, the Beijing government recently allowed villagers close to the urban area to build houses and apartment buildings on the land collectively owned by the village following a series of strict approval procedures. Previously, village residents were allowed to build houses only for themselves on the collectively-owned land and were not allowed to sell them or rent them out.

But even before the Beijing local government had issued the order, many villagers close to cities had ignored the then existing rules and built houses to be sold at one-third of the commercial price in the urban area, in order to earn some extra money. Locals call these houses xiaochanquan fang－houses with limited proper rights. Without necessary government approval, both selling and buying of such houses are considered illegal and the so-called limited property rights not protected by law.

In recent years, many disputes have broken out and law enforcers have dismantled such houses which were illegally constructed on agricultural or forest land or plots earmarked for other purposes.

The Beijing local government's recent decision can help the farmers and tenants to get what both want－more money for the villagers and cheaper rental housing for the youths.

The author is former deputy editor-in-chief of China Daily.

kangbing@chinadaily.com.cn