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New Community Offers Officials Cheap Housing
Summary:Officials in Shiyan, Hubei will have exclusive access to purchasing hugely-discounted homes in a new development. The project was supposedly designed to alleviate housing problems, but many who qualify already own multiple apartments. They’ll also be able to sell the new units for windfall profits.

By Cheng Jiulong (
Issue 612, March 25, 2013
Nation, page 10
Translated by Chi Yi
Original article:

On Zhejiang Road in Shiyan (十堰), Hubei Province sits a quiet construction site. If everything goes smoothly, a modern housing project with over 4,500 apartments will be standing there in one year. The development has been the talk of the town recently. It will be part of the existing Hechang International City (和昌国际城), but locals simply call the new addition the “civil servants’ community.”

Shiyan is a mountainous prefecture-level city with a population of 3.4 million. The average price for a home in the city is over 5,000 yuan per square meter, but these units will be sold for about half that price. The catch is, to buy one, you must be part of a very specific demographic: Shiyan government officials. 

At the sales office on Zhejiang Road, agents busily chat with potential buyers. On Mar 13, an EO reporter went in to inquire about buying one of the homes. “The civil servants’ community units can’t be sold publicly,” and agent told him. “The officials will be directly responsible for all sales.” 

“The civil servants’ community” is causing excitement within the Shiyan government. But outside, it’s quite controversial. 

“We define it as a discount from the developer,” said Yan Qinghua (严清华), chief of the Shiyan government’s Administration Bureau, referring to the low prices. “The developer has many other projects in Shiyan, so he’s willing to offer the discount in order to have a better relationship with the government.” 

Yan said that the project is intended to alleviate long-standing housing problems civil servants have faced since housing reforms have made it more difficult to buy a home. But when reading over the list of applicants for the new units, the image of “people with housing problems” doesn’t spring to mind. Many are the heads of government departments.

Through the EO’s investigation, it appears the reality of the project is far different from the original aim. Many civil servants who already own more than one apartment are still qualified to buy property in the development. Because of the gap between the purchase price and the market price, many may simply sell the property for profit.  

“Any public servant who hasn’t benefitted from government housing assistance can apply for this project,” Yan Qinghua said. “The number of apartments they have now is irrelevant.”

Hechang International City is a mature community with large supermarket and high-end cinema. Properties there are regarded as the most sought after in the city, which is why 385 were sold in just the last three months of 2012. The super low prices make snapping up a unit a no-brainer for civil servants.

“The price is so low,” a relative of a local official told the EO. “No matter how many apartments they already have, public servants will apply for the project as long as they are qualified.” 

According to Yan Qinghua, by Feb 6, 2013, the bureau had received about 5,000 applications. “We are examining the applicants’ qualifications now,” he said. 

What’s even more controversial about the project is how it will be funded. Documents obtained by the EO show that the local government had planned to pay for 40 percent of the project before construction even started. If that plan had gone forward, it would have been considered illegal fund-raising under central government regulations.

“The civil servants’ community is in a mountainous area,” Yan said. “The developers are asking for advanced payment because removing some of the mountains can be expensive. If we say yes it would be breaking the law.” 

The project is currently stalled because of this obstacle.

Another problem occurred right after the project plan was unveiled within the government. A local estate agent told the EO there were people who qualified for the project trying to “sell their qualification.”  

Yan made it clear that once qualified officials have applied and received the ownership certificate, there will be no restrictions on selling the apartments. “It’s his property so he has the right to sell it,” he said.

The average housing price in Shiyan is 5,200 yuan per square meter, while officials who qualify for the “civil servants’ community” will get their homes for a discounted price of about 2,800 yuan per square meter. 

With 4,500 units slated to be built, and assuming the average size of an apartment is 120 square meters, Shiyan officials stand to get a total discount of nearly 1.3 billion yuan below market prices. If any of them wish to immediately sell their new home at the going market rate, then they’ll make a quick profit of around 280,000 yuan.

“There is indeed room for profits,” Yan said.



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