Housing Reform
3 min readHousing Reform（1）
Housing reforms began in China with a sizable rent increase，followed by subsidized purchases of old and new public-owned housing by its tenants.The administration of housing construction and sales was split in order to meet varying consumer demands.Current government policy categorizes housing as commodity，low-profit，cost-balance and standard.Commodity housing is generally well constructed and priced beyond average affordability.The other three categories are government-subsidized to various degrees.As an official from the Hunan Provincial Department of Land and Resources explained，“This policy confines the minority，high-income earners to the purchase of commodity housing at market prices.At the same time it enables the majority，low-and medium-income earners to buy housing in the low-profit，cost-balance and standard categories.This policy has proven decisive in propelling residential housing construction in China.
Throughout the process of commercializing housing，the Chinese government has followed the principle of“feeling the way across the river.”It has accomplished this by conducting pilot experiments prior to publicly promoting any new policy and its measures.One example is the policy that allows for government-subsidized private purchases of public-owned housing.In 1982 Jiangsu’s Changzhou，Jilin’s Siping，Henan’s Zhengzhou and Hubei’s Shashi were pilots for trial subsidizedprivate purchases of newly built public-owned housing.This method of private apartment purchase worked on the basis of the government’s contributing one-third of relevant construction costs and the other two-thirds being shared between the individual and relevant work units.The scheme subsequently went into operation in Beijing，Tianjin，Shanghai and over 80 cities in 23 provinces and autonomous regions.It was promoted across the entire country in 1994.
Housing Reform（2）
Public-owned housing was originally public property that accumulated under the administration of the planned economy.In July 1994，the State Council issued“The Decision Concerning the Deepening of Urban Housing Reform.”This proposed the establishment of a public housing accumulation fund for urban residents to whichthey，their workplace and the government contributed.It also set concrete targets as regards increases in rentals and sales of housing.As Li Wu，a doctorate student at Renmin University of China，says，“Housing reforms constituted the largest Chinese welfare project ever，bearing in mind that the urban Chinese had hitherto been living on low incomes under rented roofs.The reforms have contributed substantially to the rapid growth of a new industry.”
In recognition of the sacrifices made in the interests of the country’s construction by those that worked under the planned economy，the new housing sale policy incorporates a price deduction scheme based on length of service.Since its implementation in 1994，more than 90 percent of public-owned housing in large and medium-sized cities has been sold into private ownership.
The Chinese government expects housing reforms to achieve four main objectives.
That most easily achievable is reducing its financial burden；next is rapid replenishment of housing funds in order to speed up housing construction.The long term objective is to establish a just and efficient housing system that is conducive to rational labor mobility.The most immediate goal，however，is to create a neweconomic growth point that will propel the development of related industries.
