Government to Stop Building Rental Housing but Increases Subsidies Instead
The housing minister for China stated that government will stop building rental housing units that accommodates migrant workers and people that are displaced by demolitions or renovations of urban residences or shantytowns. But instead subsidies will be increased for those in need of rental housing and these people will be encouraged to look for their own accommodations from private owners.
Minister of housing and Urban Rural Development Chen Zhenggao has raised the issue during the annual work conference stating that its part of the agenda for boosting the rental housing market. The agenda had broader plans to assimilate 274 million migrant workers as urban residents by providing a new source of demand for housing, education and other consumption that is tied to the economy, the approach also outlined by Chen marked a major shift from the previous approach were governments built large amounts of rental housing and assigned units to applicants.at the end of 2014 around 16.6 million units of public renal houses accounts for one third of the 36 million units of State funded homes that China pledged to built from 2011 until 2015.
There was a rental housing boom but a lot of problems were seen as applicants were complaining on the unfair assigning process and that the housing goes to the privileged rather to those in need. Furthermore a considerable amount of these homes are left idle after construction was completed. Based on the new approach, renters will have the options to apply their subsidy to rent depending on their personal preference, Chen also said that around 6 million dilapidated units will be renovated and those families displaced by the renovation projects wi be getting cash compensation instead of new homes.
The government is negotiating with developers into selling unoccupied homes at a discount to those who are displaced or relocated with the option to buy it directly from developers and sell it themselves to dislocated people. There are unsold homes, but are to expensive for migrant workers even with the subsidies, government can negotiate for a discount with the developers and then sell them to the migrant workers.