Development of urban housing policies in China

Abstract

Housing in China has proved problematic for many years. Since economic reform started in the 1980s, urbanization has been a token of modernization, and consequently housing provision in urban areas has been a major social and economic issue. The major housing problem in China is the scarcity of supply of housing provision. This paper analyses the initial housing reform prior to 1993, and points out the reasons for the lack of success and the lessons drawn from it. It also studies the present reform programme from 1993, and highlights the problems associated with it. It shows that the housing reforms so far, while having moved away from a complete socialist provision of housing, have gone only a small part of the way to a free market in housing. The reforms have been proved disappointing. Although privatization of housing has been the major objective of housing reforms, the reforms are still focused on the rental sector. On the economics side, the rents are set below costs, and the link between the value that people place on housing and the cost to the country's economy has failed to be appreciated. On the management side, the critical shortcoming of the strategy is its inability to bring an end to the state-owned enterprise's direct obligations for employee housing. Several problems associated with the current reforms have also been identified, especially on the legal side.