House Sweet Home

China Pictorial (English) - - Contents - Text by Zhang Xue

The past Na­tional Day “golden week” marked an un­prece­dented low for China’s hous­ing mar­ket: At least 19 ma­jor cities suf­fered an av­er­age daily deal de­cline of 51.4 per­cent over the same pe­riod of the pre­vi­ous year. In first-tier cities, the fig­ure fell by up to 70 per­cent—a wor­ri­some con­trast to 2016.

Since 2016, China’s first- and sec­ondtier cities have ex­pe­ri­enced a new round of rapid growth in hous­ing prices cou­pled with ma­jor in­vest­ment spec­u­la­tion, and the hous­ing prices in some of the first-tier cities nearly dou­bled in a year. To ad­dress ris­ing hous­ing prices, gov­ern­ments of many Chi­nese cities have in­tro­duced a series of poli­cies such as lim­it­ing pur­chas­ing and sales and rais­ing the min­i­mum down pay­ment. Since mid-july of this year, cities in­clud­ing Beijing, Guangzhou, Wuxi, and Zhengzhou have launched poli­cies to ex­pand ten­ants’ rights. In just two months, the topic be­came pop­u­lar among stake­hold­ers as well as the fo­cus of water cooler con­ver­sa­tion.

Al­le­vi­a­tion for School Es­tate

This March, at a press con­fer­ence held by the In­for­ma­tion Of­fice of the State Council, an of­fi­cial from the Min­istry of Hous­ing and Ur­ban-ru­ral De­vel­op­ment pro­posed the idea of grad­u­ally grant­ing ten­ants equal rights to pur­chasers in ba­sic pub­lic ser­vices.

In mid-july, the mu­nic­i­pal govern­ment of Guangzhou, cap­i­tal of Guang­dong Prov­ince, led the coun­try by is­su­ing an ac­tion plan to ac­cel­er­ate the de­vel­op­ment of the hous­ing rental mar­ket in the city with the idea of “of­fer­ing the chil­dren of qual­i­fied ten­ants equal rights to pub­lic ser­vices such as en­roll­ment in a nearby school to safe­guard the equal rights of all res­i­dents.” Guangzhou has re­mained at the fore­front of China’s re­form and open­ing up for decades, so its lead role in this realm is fit­ting.

“When the news broke, prop­erty own­ers in our com­mu­nity went crazy im­me­di­ately,” said Guo Leilei, a 38-year-old home owner who had just moved to the res­i­den­tial area that was built in the 1990s. A year ago, Guo bought a two-bed­room apart­ment at a price of more than 40,000 yuan (about US$6,030) per square me­ter. This rate is nearly 10,000 yuan (about US$1,507) per square me­ter higher than houses of the same con­di­tion in the neigh­bor­ing com­mu­nity. How­ever, she moved to the com­mu­nity pri­mar­ily for the school district so her six-year-old son would be ac­cepted to one of the prov­ince’s top pri­mary schools.

“I would have just rented a house here if I had known such poli­cies were com­ing; I sold a big­ger house to move here,” she com­plains. Later, how­ever, she found that the so-called “equal rights for ten­ants and own­ers” is not as sim­ple as it sounds.

In fact, ad­mit­ting ten­ants’ chil­dren into nearby schools is not the new sys­tem. Ac­cord­ing to the reg­u­la­tions, a lease con­tract is an ac­cepted proof of res­i­dence, which can in­deed be used to get a stu­dent ad­mit­ted to a lo­cal school. This also re­quires other con­di­tions such as one of the par­ents must be a lo­cal per­ma­nently reg­is­tered res­i­dent or hold a green card for ta­lented per­son­nel. In ad­di­tion, the num­ber of

va­can­cies is limited— stu­dents must ac­cept the “over­all ar­range­ment” ac­cord­ing to the ac­tual situation, so it can be very dif­fi­cult to en­roll a child in a pres­ti­gious school.

“At this stage, it’s not com­pletely real­is­tic to reach the goal of grant­ing equal rights to ten­ants and own­ers due to the mas­sive in­flow of pop­u­la­tion to ur­ban ar­eas,” opines Ren Xingzhou, a re­searcher with the In­sti­tute for Mar­ket Econ­omy un­der the De­vel­op­ment Re­search Cen­ter of the State Council. “The most dif­fi­cult part is the in­suf­fi­cient sup­ply of qual­ity pub­lic re­sources, es­pe­cially the ap­par­ent short­age of ed­u­ca­tional re­sources in many com­mu­ni­ties.”

Com­pe­ti­tion for Ta­lented Per­son­nel

As first-tier Chi­nese cities, Beijing, Shang­hai, Guangzhou and Shen­zhen have en­joyed the coun­try’s best re­sources, which is a ma­jor rea­son be­hind the soar­ing prop­erty prices in those cities, mak­ing it hard for many young grad­u­ates to set­tle there.

“In re­cent years, the sky­rock­et­ing hous­ing prices in first-tier cities have pushed many of my best grad­u­ates to choose jobs in sec­ond- and third-tier cities be­cause they can hardly af­ford hous­ing,” re­marks Pro­fes­sor Cai Nian from the School of In­for­ma­tion En­gi­neer­ing un­der Guang­dong Univer­sity of

Tech­nol­ogy. “The goal of giv­ing ten­ants and pur­chasers equal rights in big me­trop­o­lises is to re­tain young tal­ent.”

This year, first- and sec­ond-tier cities in­clud­ing Wuhan, Chang­sha, Chengdu, Xi’an, Ji­nan, Nan­jing, Hangzhou, Zhengzhou, Qing­dao, Xi­a­men, Tian­jin and Chongqing have pro­mul­gated de­tailed rules and poli­cies to safe­guard ten­ants’ equal ac­cess to pub­lic ser­vices. “The in­te­gra­tion of such rights and house­hold reg­is­tra­tion poli­cies re­flects com­pe­ti­tion for tal­ent par­tic­u­larly in big cities,” com­ments Zhang Hong­wei, di­rec­tor of Shang­hai Tospur Real Es­tate Con­sul­ta­tion Com­pany. “One of the goals of such poli­cies is to re­tain ta­lented peo­ple in a city to help it per­form bet­ter.”

Be­fore the in­tro­duc­tion of such poli­cies, first- and sec­ond-tier cities such as Beijing, Shang­hai and Shen­zhen were pro­vid­ing specialized apart­ments for young ta­lented peo­ple to al­le­vi­ate hous­ing pres­sure.

The mu­nic­i­pal govern­ment of Shang­hai, for in­stance, pro­vided apart­ments specifi- cally for sci­en­tif­i­cally in­no­va­tive tal­ents aged 20- 40, in­clud­ing re­cent univer­sity grad­u­ates, hi-tech per­son­nel, lead­ing fig­ures in sci­ence and tech­nol­ogy and op­er­a­tors of start-ups—the pow­er­houses most re­spon­si­ble for ac­cel­er­at­ing a city’s sci­en­tific and tech­no­log­i­cal progress and eco­nomic growth. The govern­ment aims to meet their ac­com­mo­da­tion de­mands, which is a ma­jor fac­tor in their lives. The im­ple­men­ta­tion of equal ac­cess to pub­lic ser­vices fur­ther safe­guards the in­ter­ests of ten­ants.

Buy or Rent?

As one of the first group of 12 pilot cities to carry out home rental re­form, Hangzhou of­fi­cially re­leased new poli­cies for ten­ants on Au­gust 30, ac­cord­ing to which, over the next three years, new rental hous­ing will ac­count for 30 per­cent of all new hous­ing, and rental com­pa­nies will be sub­si­dized and sup­ported by the govern­ment. It is fore­see­able that more and more rental hous­ing will en­ter the mar­ket un­der the guid­ance of govern­ment poli­cies. In 2017, the surge of hous­ing prices was ef­fec­tively curbed through a series of mea­sures to limit hous­ing deals such as el­e­vat­ing the pur­chase thresh­old, in­creas­ing the avail­abil­ity of hous­ing and en­cour­ag­ing rent­ing. Con­sid­er­able credit for this vic­tory was given to the im­ple­men­ta­tion of the “equal rights” pol­icy due to its long-term vi­sion for in­sti­tu­tional ar­range­ment. Is buy­ing prop­erty still de­sir­able af­ter the im­ple­men­ta­tion of the “equal rights” pol­icy? Yes, of course.

Since an­cient times, Chi­nese peo­ple have firmly be­lieved that a fam­ily can­not lead a con­tent life with­out its own home. Ev­ery­one would pre­fer to buy a home if they have a choice.

“It is im­pos­si­ble to make ev­ery­thing 100 per­cent equal, es­pe­cially con­sid­er­ing how limited qual­ity ed­u­ca­tional re­sources are,” com­ments Zhang Hong­wei. “Still, rent­ing sel­dom brings a sense of be­long­ing, a feel­ing deeply rooted in our hearts.”

Au­gust 31, 2017: Dec­o­rat­ing a newly-rented home that is part of the Puhuiyuan Pub­lic Lease Hous­ing Project in Kun­ming, Yun­nan Prov­ince. IC

On De­cem­ber 7, 2016, the first groupup of ten­ants were wel­comed to the big­gest hous­ing de­vel­op­ment project along the Bund in cen­tral Huangpu District, down­town Shang­hai spe­cially builtt for young tal­ents in the fi­nan­cial sec­tor. The project is part of a bid to at­tract and re­tain tal­ent. IC

June 24, 2017: Renters wait for their num­ber to come up to choose a home at the State- owned Real Es­tate Ad­min­is­tra­tion Cen­ter in Fuzhou, Fu­jian Prov­ince. VCG

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