Economy

    Developers shun construction of affordable housing

    (Xinhua)
    Updated: 2011-06-27 06:09
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    BEIJING - Most Chinese real estate developers kept their distance from repeated appeals by officials to accelerate the country's affordable housing construction that aim to rein in the runaway property market, according to a report released Sunday.

    Only 30 out of 100 housing developers had participated in the affordable housing construction from 2007 to 2010, underlying property companies' reluctance to undertake a less profitable investment, said a report on Chinese realty firms' social responsibility, which was released by the Ministry of Housing and Urban-Rural Development (MOHURD).

    The 100 realty companies said they had fulfilled their social responsibility quite well in the past years.

    "Only by fulfilling their social responsibility by incorporating their business into wider interests regarding more groups can property companies have conditions for their sustained development," said Shen Jianzhong, a director of the Department of Housing Market Supervision and Regulation with the ministry.

    The housing market is increasingly viewed as a political issue that influence social stability because skyrocketing prices were blamed to widen the rich-poor gap in China and triggered widespread complaints from the public who can't afford a house in cities.

    To curb excessive home price increases, the Chinese government has adopted a series of tightening measures to guard against speculation, including higher down payments and collecting property taxes in the cities of Shanghai and Chongqing.

    The government also planned to build 36 million affordable housing units for low-income families over the next five years, of which 10 million units will begin construction in 2011.

    Sales price of such affordable homes are restricted by the government and can only be sold to or rented by middle- or low-income people, thus limiting developers' profits.

    However, about 300,000 affordable housing units have broke ground nationwide by the end of May. Many local governments said they did not have sufficient fund to support the construction of affordable housing.

    In May, the Chinese government ordered centrally-administered State-owned enterprises to be "actively involved" in building affordable homes.

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