close quar­ters

WOULD YOU WANT THE GOV­ERN­MENT AS A HOUSEMATE?

The World of Chinese - - Tea Loves - – D.D.

Buy­ing an apart­ment in China is tough. Prices in first­tier cities keep sky­rock­et­ing but de­mand never seems to fall. In­stead, po­ten­tial buy­ers just get more anx­ious about miss­ing out.

Chi­nese author­i­ties fear a mar­ket crash, but would also like to avoid hav­ing prices spi­ral en­tirely out of reach for the mid­dle class. A raft of mea­sures have been tried, from push­ing in­vest­ment in less de­vel­oped cities to tin­ker­ing with the hukou (house­hold reg­is­tra­tion) sys­tem.

The lat­est ef­fort is pretty blunt in com­par­i­son: Bei­jing’s mu­nic­i­pal gov­ern­ment has mooted a plan that would al­low it to be­come a co-in­vestor in prop­er­ties so house buy­ers can af­ford to stop rent­ing and put down a de­posit.

Dubbed a “joint prop­erty own­er­ship scheme,” the scheme would make the gov­ern­ment a mi­nor­ity stake­holder in each apart­ment. Par­tic­i­pants would face cer­tain re­stric­tions when sell­ing, with only lim­ited par­tic­i­pa­tion op­por­tu­ni­ties.

The plan comes as Guangzhou and Bei­jing have made moves to al­low renters the same ed­u­ca­tion rights as home­own­ers. Pre­vi­ously, only reg­is­tered prop­erty own­ers could en­rol their chil­dren in lo­cal dis­trict schools. This re­sulted in tiny plots of land near pop­u­lar schools go­ing for as­tro­nom­i­cal sums of money to par­ents ea­ger to en­sure el­i­gi­bil­ity—one un­in­hab­it­able pas­sage­way was listed last year for 1.5 mil­lion RMB (227,000 USD), the price so high be­cause its own­ers would be el­i­gi­ble to send their chil­dren to the pres­ti­gious Bei­jing First Ex­per­i­men­tal Pri­mary School nearby.

The rights of land­hold­ers ver­sus renters raises the ques­tion of what “own­er­ship” un­der the Chi­nese sys­tem means when the only pur­chase op­tion avail­able is a longterm lease of the land rights, gen­er­ally for around 70 years. Some prov­inces in­di­cated that ex­ten­sions are avail­able, but re­quire new land-use con­tracts and as­so­ci­ated trans­fer fees.

As yet, it’s still an is­sue for le­gal ex­perts and landown­ers to spec­u­late over; for all its cur­rent ne­ces­sity to both the econ­omy and mar­riage mar­ket, China’s prop­erty lad­der is only a few decades old, and the magic seven-decade mile­stone is still some way off.

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