The Government Behavior in the Development of Indemnificatory Housing in China

Abstract -Abstract based on brief description of the development of China's history of affordable housing ,this paper focused on the dilemma and the government behavior in the development of affordable housing ,getting a conclusion that the local governments' object of pursuit high growth of GDP and the land finance is the main course of the plight. Then the paper analyzed the necessary to address the middle-income groups of public rental housing Finally, we get that goals for local governments should be transferred to pay attention to improve the people's livelihood and make policy recommendations to ensure the effective implementation of the construction of public rental housing.

Key words-government, object transfer, land finance , affordable housing

II. METHODOLOGY

Brief history of the development of affordable housing

1. Welfare housing distribution system

Since the foundation of China, our country's housing allocation syste was a kind of welfare distribution, nearly free use of low-rent, the system of the state or units of ownership . As time goes by, more and more of the drawbacks such as problem of unfair distribution showed up. The traditional distribution system does not solve the difficult problem of housing the masses

2. The seed period of the commercialization of housing and initial exploration of affordable housing and low-cost housing

In June 1991, the State Council on the "continue to actively and steadily carry out on the urban housing system reform in the notice " announced that government would develop affordable housing, giving priority to the houseless families and housing hardship . In 1998, the State Council issued the "Circular on Further Deepening the urban housing system reform and speeding up housing construction in the notice " which announced housing supply system of purchase or lease of the commodity housing to high-income earners, the purchase of Affordable housing to low-income, government leased housing units to the lowest income. Then affordable housing officially became an important part housing supply system in China

3. Resistance to affordable housing

August 12, 2003, the State Council issued the "real estate market on the promotion of sustainable and healthy development," which modified affordable housing from "the main housing supply" to " commodity housing with the nature of a security policy ". By This, affordable housing's housing characteristics of public goods began to be weakened. Since then the commodity housing became the main ingredient of housing supply.

4. The attention again to the indemnificatory housing and intensive policy introduced

In 2006, in view of the high prices brought about by social tensions, China started to increase security efforts on housing. Then Premier Wen jiabao proposed speeding up the construction of urban low-rent housing system and standardizing the development of affordable housing followed by housing projects, Shantytowns housing and "low-rent housing and security planning for 2009-2011"

5. The introduction of public rental policy

In mid-June 2010, the Housing Ministry proposed public rental construction formally quated in" guidance on accelerating the development of public rental housing", mainly in order to solve the difficult problem of low-income housing

Low-cost housing and affordable housing development dilemma

1. Funds Channels

As the supply of indemnificatory housing funding sources is relatively simple, mainly relying on local governments and central subsidies. In 2007, "the State Council on a number of opinions of solving the housing difficulties of urban low-income families " clearly defined the net income from the land to extract the proportion of low-rent housing guarantee fund shall not be less than 10%. The Audit Commission 2010 announced: the extraction of net income from land rent housing security funds in Beijing, Shanghai, Chongqing, Chengdu and other 22 cities is less than the proportion of requirements, a total of 14.623 billion yuan less.

2. Land supply

As the scarcity of land resources, local governments need to allocate limited land to the construction of indemnificatory housing. According to housing land use plans under the Ministry of Land and Resources 2010 announced that national housing supply and land for indemnificatory housing all over administrative regions are as follows:

Table 1

A1 represents the ratio of actual land-use to annual land-use plan for housing in each region. A2 represents the ratio of annual indemnificatory housing to the actual land-use plan in each region.

A1 for the full year 2010 is 67.8% and A2 is 12.7% in the whole country. That is to say, in 2010, the ratio of annual indemnificatory housing to the actual land-use plan is only 12.71% while commodity housing still accounts for 67.29% of the actual land-use plan. According to the table 1 , the ratio of annual indemnificatory housing to the actual land-use plan in central and western regions is better than that of the coastal region.

3．Supply object

Table 2

Low-rent housing primarily for low-income and non-revenue income groups, affordable housing primarily for Lower-middle group and commodity housing for high income groups form three levels of housing supply system. The unclear definition of beneficiaries to the two types of indemnificatory housing and the Cross-protection phenomenon of object (shown above), as well as the "sandwich class" of middle-income protection gap make the existing housing security system not function well.

The reasons for local governments's lack of enthusiasm in construction of affordable housing and low-cost housing.

Although the state and local governments do promote indemnificatory housing in the building, but as has been discussed above indemnificatory housing has not developed as people anticipated To sum up the reasons they are as follows:

(1) the Shift for the focus of local tax revenue

During the beginning of Reform and opening up, China adopted financial system based on the financial basic index, mainly for tax revenue. That is to say, the tax revenue above the base part of the local government promoted