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2014 | OriginalPaper | Chapter

6. Effects of Housing Policy on Affordability

Authors : Zan Yang, Jie Chen

Published in: Housing Affordability and Housing Policy in Urban China

Publisher: Springer Berlin Heidelberg

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Abstract

The fundamental justification for government intervention in the housing market is based on the market characteristics, such as natural monopoly, externalities, imperfect information, and frictions. This chapter provides the theoretical basis to support the government policy in response to the affordability problem. In particular, the public housing strategy is to facilitate the supply of affordable housing to lower-income households through direct or indirect government involvement.

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previous chapter Housing Affordability in Urban China: Regional Study
next chapter Financing Affordable Housing Through Compulsory Savings
Footnotes
1
There are several debates in China on whether SRH should be regarded as “public housing” (security housing) as the buyers of SRH are not restricted to low-income households. However, according to our definition of public housing, i.e., housing allocated by the government rather than the market, SRH qualifies as public housing in the Chinese context.
 
2
The Anju program, launched by the State Council’s Urban Housing Reform Committee in 1995 and the first major nationwide construction plan for public housing since the 1978 reform, aimed to complete 25 million square meters of new for-sale public housing each year between 1995 and 2000. During 1995–1998, 71.577 million square meters of public housing were provided under the Anju program. The operation details and the reasons for the failure of the Anju program are described in Rosen and Ross (2000).
 
3
If the rent for PRH is 60–80 % lower than the market rate, for a project operated for 70 years, the IRR is on average decreased by 20–40 %.
 
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Metadata
Title
Effects of Housing Policy on Affordability
Authors
Zan Yang
Jie Chen
Copyright Year
2014
Publisher
Springer Berlin Heidelberg
Book
Housing Affordability and Housing Policy in Urban China

Print ISBN: 978-3-642-54043-1

Electronic ISBN: 978-3-642-54044-8

Copyright Year: 2014

DOI
https://doi.org/10.1007/978-3-642-54044-8_6

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