Who is Being Allocated Policy-based Housing?

By Tang Xiangyang
Published: 2010-05-26

The Chinese government's determination to solve the housing difficulties of families and individuals with mid or low-income by providing them with small, cheap housing may suffer a blow as local governments push to construct large-scale, low-priced "policy-based" housing for civil servants.

A small city in Shanxi Province, Mei County's plan to sell 409 of the 610 policy-based homes that have been constructed to local civil servants has been exposed. The size of the homes are projected to range from 48 to 137 square meters.

"Policy-based housing", also called "affordable housing" or "government-subsidized housing", refers to government constructed housing for low-income families and individuals. Since the developers of such housing projects are not required to pay a land grant fee(土地出让金)to local governments, the projects are priced much lower than the market rate. According to policies issued in 2007, each government-subsidized home must be around 60 square meters in size.

Mei County is not alone. Another local government that plans to provide government-subsidized housing to its civil servants is Shenzhen, a city located in Guangdong Province. In April, it was released by media that 299 applicants for Shenzhen's policy-based housing were working for the government. Some of them even already owned luxurious homes.

Aside from providing access to policy-based housing, local governments are also constructing homes specifically for officials. Since such housing projects are presided over by governments themselves, they are also exempted from paying the land grant fee.

Recently, the city of Rizhao in Shandong's plan to construct 3,500 apartments for local officials has been exposed. These houses are to be located in the city's prime area and are priced at 3,800 yuan per square meter, while cost of nearby housing is 5,000 yuan per square meter.

When questioned about the reasoning behind such a project, one local official said, "we are constructing these houses because the difficulties local officials and civil servants face regarding housing are very urgent."

"There are many precedents. Our city is already lagging behind," he went on to say.

Despite officials claims that they are experiencing "housing difficulties"; officials have already begun to sell their uncompleted Rizhao homes through intermediary housing companies nearby.

According to Legal Daily, Rizhao's project became exposed through budget documents handed out at a meeting that were supposed have been collected at the meeting's conclusion.

Liuzhou City in Guangxi Province has constructed a "serene and elegant zone of luxury" for local officials. Every official will share a villa along a river with a garden and garage with another official.

Statistics show that around 74 percent of mid-level civil servants are living in housing provided by central government agencies.

"In fact, government officials are in a completely different situation than ordinary people regarding housing. Even in this period of skyrocketing housing prices, they do not feel the pressure of being a mortgage-slave or the anxiety brought on by increasing housing prices," Li Chengyan, a professor at Peking University's School of Government, said.

"Yes, there are civil servants who can not afford a house, but their numbers are much smaller than the number of people with low-income in our country. That is the core of the problem,"Chen Zhun, director of China's Urban-Rural Economic Development Research Institute, said.

He said, civil servants have mid-level income and should not be covered by the policy-based housing projects.

More cities, including Anqiu City in Shandong Province and Shijiazhuang City in Hebei Province, are buying apartments at prices much lower than the market rate for their local civil servants.

Additionally, it has been reported that employees from the Ministry of Agriculture have bought such houses.

Another city in Shanxi Province, Xianyang, is planning to construct 2,600 units of housing for its local civil servants. This housing project will occupy an area of 112,000 square meters.

Time will tell if the government's recent housing reforms will address this issue and finally begin to provide housing to the people who need it the most.

This article was edited by Rose Scobie

Links and Sources
The Beijing Times: 多地频现公务员团购低价房 保障房渐成特权房
Legal Daily: 眉县“权力房”不能仅止于名单作废