China Plans Millions of Low-Cost Rental Homes in Equality Push
(Bloomberg) -- China will build millions of low-cost rental housing by 2025, in line with President Xi Jinping’s drive for “common prosperity” and as the government seeks sustainable alternatives to a slumping property market.
A total of 6.5 million homes for leasing purposes will be built across 40 major cities in the five years through 2025, Pan Wei, an official with the Ministry of Housing and Urban-Rural Development, told reporters at a press conference on Tuesday.
The homes will account for around 26% of new housing supply in the cities during the 14th five-year plan period and benefit 13 million young people and new residents, he added.
Homes in big Chinese cities are largely unaffordable for many young people and migrant workers after years of rapid price gains. In his key essay on common prosperity, Xi listed expanding affordable rental housing supply as one of the top priorities for the nation. The housing ministry has also outlined plans to keep a lid on home rents.
In addition, the government is stepping up efforts to grow the leasing market for the long-term development of the real estate industry in the face of plunging property sales and a cash crisis among some developers.
More than 930,000 low-cost rental homes were built in the 40 cities last year, Pan said.
“The program alleviated the housing difficulties for new urban dwellers and young people,” he said. “It also adjusted the supply structure in the property market and promoted the healthy development of the industry.”
The State Council, or China’s cabinet, in June urged more market participation in government-led programs to provide rental housing at prices lower than market rates. It also encouraged firms to turn unused business properties and factories into such homes.
Pan on Tuesday did not make clear who would pay for the new rental houses to be built or who would own the properties. But he said for the past year or more, local governments helped lower building costs with supportive land, tax and financial policies.
He said separately that nearly 220,000 urban living blocks built nationwide before 2001 will be renovated by the end of 2025.
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