• Sat
  • Jul 12, 2014
  • Updated: 5:07am

More cash for low-income housing

PUBLISHED : Wednesday, 08 February, 2012, 12:00am
UPDATED : Wednesday, 08 February, 2012, 12:00am

The Ministry of Finance has pledged more funding this year to build homes for low-income households.

The ministry has recommended a variety of fund-raising options for local governments, and says they must 'effectively guarantee' their share of the funding needed to sustain affordable-housing projects under their control, while 'not leaving any gap' between the plans and their financing.

With the increasing emphasis on such housing, Vice-Premier Li Keqiang on Monday called for more efforts to prevent deception and corruption in the distribution of subsidised apartments.

'Fair distribution is key to the success of low-income housing and is the lifeline of its sustainability. It is also an important test of the government's credibility and its ability to execute the programme,' Li said.

Several large-scale affordable- housing programmes are being carried out simultaneously in Chinese cities in an effort to improve the housing conditions of low-income families.

The Finance Ministry said provincial governments should also provide additional funding to cities that were struggling to raise enough money.

It also said that affordable housing should be given priority in the use of proceeds from local government bonds. Revenue from property taxes, where applicable, should be injected into building affordable housing.

The property tax is now being collected on an experimental basis in Shanghai and Chongqing, but mainland economists said the scheme may be expanded to other cities this year.

A Ministry of Finance circular discussing the programme marked the beginning of a campaign to rally support for housing programmes, which Beijing has used to raise the living standards of poor urban households and to stabilise once sky-rocketing urban housing prices.

Heavy pressure was applied to local governments last year to get them behind the effort to build 10 million flats.

Lin Songli, an economist with brokerage Guosen Securities, said many local governments may have drained their coffers for these types of housing projects.

Meanwhile, the local governments have earned less from the auction of land rights - generally a main source of their income - as a result of Beijing's efforts to cool the overheated housing market.

But He Tian, an analyst with the China Index Academy, one of China's largest property research organisations, said that since the building of affordable housing was such a priority with Beijing, local governments would have to find ways to pay their share of the plan if the central government pushed hard enough.

0.18%

According to a survey of 100 cities across the mainland, the average house price was this much lower in January than a month earlier

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