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Affordable housing

(China Daily)
Updated: 2010-11-19 07:53

The National Auditing Office (NAO) report on the 2007-2009 government investment guarantee for low-rent housing shows the same old pattern - fine over the big picture, but with minor stains.

During the three-year period, financial support for low-rent housing construction increased 6.25 times, and the number of households covered grew 2.58 times. The overall picture therefore is inspiring.

Of the 32 major cities surveyed, 27 had expanded the beneficiaries of low-rent housing from those qualified for government-granted subsistence guarantees to low-income households with housing problems.

With prices of commercial housing lingering at levels inaccessible to even average salary-earners and the government seemingly unable to bring them down, government-sponsored low-rent housing is a necessary basic guarantee for low-income citizens.

But as is true of most well thought-out public-service initiatives, there is the problem of how to make it true to its aim. In spite of all the talk about expanded coverage, an obvious basic truth remains - many low-income households are still uncovered.

As the NAO report reveals, some cities, including Beijing, Shanghai, Chongqing and Chengdu, have failed to collect the funds from land transfer revenues earmarked for low-rent housing construction. Ten percent of such revenues should have been used specifically for this purpose. A total of 14.6 billion yuan has been used elsewhere.

The report gave two reasons for this. One is that those cities already have sufficient money for low-rent housing, the other is some cities still have to make an accurate calculation of land transfer revenues. Neither reason justifies the failure to invest enough in low-rent housing.

The simple truth is that the supply of low-rent housing still falls short of needs.

Local governments share a conspicuous preference for commercial real estate. We all know that. But providing affordable housing for the poor is not only an essential public service within their duties, it also eases public discontent and hence contributes to social stability.

Given the high stakes, there must be every effort made to prevent misuse and make sure all the earmarked funds are used as intended. Sadly, the NAO report confirmed there was fraud.

Of the 32 major cities, more than 2,000 households in 18 cities that should have been ineligible were found to have been offered low-rent housing. That means the same number of qualified families were denied the welfare they deserved.

The good news is that those who unfairly obtained low-rent housing have been asked to return the apartments assigned. But we should target the roots of the malpractices.

Ferreting out the true culprits in such cases of cheating is necessary in order to prevent similar problems from emerging later.