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Economy

Land available for 10 million new 'affordable homes'

By Wang Qian and Wang Xiaotian (China Daily)
Updated: 2011-03-07 17:09
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BEIJING - China's land watchdog is guaranteeing there will be enough building sites available for the construction of the 10 million affordable homes the country has called for this year and said it will complete a detailed land-use plan before the end of March.

Xu Shaoshi, minister of land and resources, told China Daily on Saturday the land is "absolutely guaranteed".

If the land provided falls short of what is required, those to blame will face severe punishments, Xu said.

He added that the general land supply plan will include an additional plan specifically about the provision of land for affordable housing.

China plans to build 36 million affordable homes during the coming five years, including 10 million in 2011 and 10 million in 2012. The remaining 16 million will be finished during the final three years of the 12th Five-Year Plan (2011-2015) period, said Xu Xianping, deputy head of the National Development and Reform Commission, at a news conference in Beijing on Sunday.

The affordable homes are part of the plan to help solve the problem of rapidly rising house prices caused by an overheated real estate sector.

Compared to the target of 5.8 million new affordable homes in 2010, the challenge of finding enough land for the 10 million affordable homes in 2011 will put pressure on land resources.

The central government reiterated on Jan 26 that, of the total supply of land for housing, more than 70 percent should be for affordable housing, small- and medium-sized homes and the reconstruction of shantytowns. A report from the ministry showed the ratio in 2010 was 67.9 percent across 30 provinces, municipalities and autonomous regions.

Illegal land use, such as leaving land idle that was earmarked for building, is something the ministry is trying to counter.

Xu said more severe punishments will be introduced for such practices.

He added that the heads of 12 places with rampant land misuse had been summoned to the ministry for "face-to-face" discussions.

Related readings:
Land available for 10 million new 'affordable homes' China tightens land purchase rules
Land available for 10 million new 'affordable homes' Land seizures threaten to disrupt countryside calm
Land available for 10 million new 'affordable homes' Shanghai home sales decline in February
Land available for 10 million new 'affordable homes' Chongqing starts China's first lottery for public rental housing

But, according to a report from WorldUnion Properties, the construction of the 10 million affordable homes this year might be hampered not so much by a lack of land as a lack of funding. It suggested funding could fall short by as much as 816.2 billion yuan ($124.4 billion), which is more than half of the 1.3 trillion yuan needed.

Zhang Rongming, vice-chairwoman of the CPPCC National Committee, said a shortage of funding could be a problem, despite the fact that the government will raise money from its allocated fiscal revenue, the housing provident fund and local authorities' land transfer revenues.

"We expect the central government will contribute more to the cost of construction and favorable policies could be brought in to encourage other capital to be invested in the project," she said.

Yan Qingmin, a member of the CPPCC National Committee, said the role of bank loans in the regulation of the property market should not be overestimated.

"Because a tightening monetary policy usually has to be conducted through management of credit," said Yan, who is also assistant chairman of the China Banking Regulatory Commission.

Yan, who was speaking on Friday, suggested the government relies more on tax and fiscal support to curb increases in the cost of real estate and to fund the building of the affordable homes.

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