China Puts Stress on Affordable Housing

China's central government has signed strict agreements with provincial governments to ensure they provide low-income renters a total of 10 million government-subsidized apartments this year. The move follows the introduction of new restrictive measures last month to curb rising housing prices. Our reporter Wang Jing has more.

The agreements contain administrative punishments for local governments that fail to carry out the policy. Local government leaders who don't fulfill their tasks will be demoted or dismissed.

The agreements come on the heels of a slew of new measures by the central government to cool down the overheated property market, including a new requirement in Beijing that forbids people from purchasing a home if they have not paid taxes to the city for five consecutive years.

The 10 million affordable homes available for low-income renters is 70 percent more than the number of low-cost apartments that were offered last year.

If the agreements are effectively implemented, about one in every 20 urban households would be eligible to rent an apartment.

Wang Yuanhong from the State Information Center says the policy will increase the supply of low-cost homes in the near term.

"In economics, price is determined by supply. For instance, the increase of supply in the short term, particularly that of low-priced homes, will help cool down the entire property market. This is something we can expect."

Many local governments obtain a large amount of their revenue from the construction of commercial apartments, because they charge developers fees for the release of land.

By contrast, subsidized housing is sometimes ignored, because local governments often have to provide land for less money to attract the interest of developers. Meanwhile, the governments must invest large sums of money for property management services.

Liu Dejun, deputy director of local housing department in Ningxia Hui Autonomous Region says his government will spend 900 million yuan on the affordable housing project.

"The money is used directly for the project. Until now, about 57-thousand low-income urban families have benefited from it."

This is the second time that the central government has tried to hold provincial leaders accountable for ensuring an adequate supply of government-subsidized housing.

Similar agreements were signed between the central government and its local branches last May.

The latest official data suggest home prices in major Chinese cities continued to increase in January. They rose in 68 of the 70 major cities examined.

Haikou city in Hainan Province registered the biggest increase of more than 20 percent.

For CRI, I'm Wang Jing.