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Beijing mulls new policy to make housing affordable
 
Photo taken on Feb. 17, 2016 shows a cluster of residential buildings under construction in Shijiazhuang, capital of north China's Hebei Province.Photo: Xinhua
 
The Beijing municipal government is now planning a new “joint property ownership” scheme in an effort to provide more affordable homes to buyers and to further tame the skyrocketing home prices.
 
The so-called “joint property ownership” houses will allow residents to buy a share of the ownership of a house, along with the government, but still have the full right to use the house. 
 
Plans on jointly owned property have been published by the Beijing Commission of Housing and Urban-Rural Development on its website to solicit public opinion. 
 
While Beijing is not the first city in China to provide “joint property ownership” houses, experts say the difference is that focus of the new plan will be on the so-called “sandwich class” who are not low-income people but still not rich enough to afford a private house.
 
Who can buy? 
 
According to the new plan, the “joint property ownership” houses would be restricted to those who do not own any property, and single buyers need to be at least 30 years old, while married couples are not subject to that age restriction. 
 
Another highlight of the new plan is that at least 30 percent of the “joint property ownership” homes will be allocated to the “new Beijingers” who do not have Beijing hukou but have a stable job in the city. 
 
Also, observers say, the new plan is an upgraded version of the previous “self-occupied home” scheme which was rolled out in 2013, under which an individual wholly owns a house with no government share, but if he or she wants to resell the house, a 30 percent capital gains tax should be paid to the government.
 
However, the “self-occupied homes” scheme often prioritizes Beijing hukou holders. 
 
How shares will be allocated?
 
While the ownership of a house will be shared between a buyer and the government under the new plan, specific shares will be worked out based on the price comparison between the “joint property ownership” house being sold and a nearby commodity house with similar quality. 
 
For example, if the average price of a private home near a “joint property ownership” house was 50,000 yuan per square meter and the “joint property ownership” one was 40,000 yuan, an individual buyer would hold around 80% of the ownership with the government no more than 20 percent. 
 
While it’s still unknown how much cheaper a “joint property ownership” house will be, it’s clear that the more shares an individual buys, the more ownership of the house the individual will have. 
 
Five years after purchasing such a house, individual investors can sell their shares based on the market price, or purchase the remaining shares owned by the government. 
 
Ongoing efforts
 
The new plan is the latest among recent measures to stabilize the housing market and curb speculation. 
 
On July 17, authorities in the southern city of Guangzhou decided to give tenants and homeowners equal rights to local education resources. In many Chinese cities, the right to attend schools is limited to children of homeowners rather than tenants, and Guangzhou is the first top-tier Chinese city to grant such rights to tenants. 
 
Following that on July 20, the Ministry of Housing and Urban-Rural Development and other government departments jointly made an announcement saying that steps would be taken in cities with net population inflows, including increasing rental housing supplies and setting up a government-backed home rental service platform. Pilot projects will first start in 12 cities, including Guangzhou, Shenzhen, Nanjing and Hangzhou.
 

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