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Common folk losing hope in China's opaque housing system

Publication Date : 27-12-2013

 

Inequality in China, it seems, is none the more stark than in the roof over one’s head.

The unequal distribution of the fruits of the country’s rapid-fire growth over the past three decades has caused massive inequality. And this is visible in the housing conditions of the various lower- and middle-income interviewees whom I visited and spoke with for a story on China’s affordable housing programme.

From the 60-year-old retiree living in a shantytown in the heart of Beijing’s glamorous central business district (CBD) to the 26-year-old tuition teacher who shares a 15 sq m room with a roommate, their frustration - even resignation - with the inefficiencies of the housing system was palpable.

Similar to Singapore, sky-high property prices have squeezed the middle-class, making it difficult for them to achieve a better, more comfortable life in the towering commercial apartment blocks that define the skyline of the Chinese capital.

If housing prices-to-income ratios are anything to go by, these apartments are reserved only for the extremely wealthy or those with “guanxi” or connections who can get them below market rates.

Beijing prices are the steepest in the country. A 70 sq m commercial home costs 20 times the median annual household disposable income, the International Monetary Fund said in a 2011 report. Ths is four times higher than in Britain and double Japan’s. Shanghai’s price-to-income ratio is around 14 times, Reuters reported. Singapore’s is six times.

Ideally, the price of an affordable home would be less than three times a household’s annual income.

The obvious result of this trend is that, unable to get their hands on high-in-demand but limited social housing, millions of common folk are unable to buy a house.

They include the migrants who have made the trek from the countryside to cities, only to find themselves living in tiny spaces, occasionally in dirty and dank surroundings.

For instance, Sun Qian, the tuition teacher I interviewed, shares a three-bedroom apartment with six other people. All seven of them share one bathroom and a kitchen. The bathroom situation can be quite a nightmare, Sun said.

The retiree, Sun Jiake, uses a public bathroom. He lives in a poorly built shack without a proper heating system and relies on a stove to keep warm in Beijing’s cold winter months.

When I visited the shantytown with its haphazardly built houses and rubbish-lined alleys, I saw some residents taking pails of excrement to the public toilet to be emptied.

This might be somewhat unimaginable for even lower-income Singaporeans, but it is the reality of life for China’s poor.

The six people I interviewed for the story were not only frustrated with the government for their inaction, but were also dismayed by discriminatory policies that have long sidelined the less fortunate who need a decent home the most.

What struck me the most was the common thread of “losing hope”, which came up frequently in my conversations with them.

This discontent is heightened by the failure of China’s 14-year-old affordable housing programme. Plagued by corruption, unfair allocation and other government inefficiencies, it has become the target of the people’s anger.

For instance, in Xinzhou, an industrial town in Shanxi province’s coal belt, a new complex of apartments called Century Garden was on the local government’s list of designated social housing in 2010.

But almost all the 1,578 apartments were reserved for local officials, some of whom resold them at considerable profit even before construction was completed, reported the British newspaper Financial Times.

The media have also reported on the Ferraris and Lamborghinis that pack the parking lots of such affordable housing estates, a clear indication that some of these homes are not being allocated to those who really need them.

It is cases like these made public that have fanned the anger of the people against the government.

But the government has caught on, with recent policy summits repeatedly emphasising the need to ramp up its affordable housing programme. It also committed in 2011 to build 36 million public housing units nationwide in a five-year period till 2015.

Yet, this in itself does not solve the problem. What is more crucial is ensuring that these houses go to the right people.

A transparent allocation process and proper management of the programme with clear procedures will reduce unhappiness as people will then know what to expect and what their waiting time might be.

In Singapore, no one can say there isn’t anger over housing prices but the Housing Board’s public housing system is an open and transparent one. Information on its website is regularly updated with balloting results made clear for all to see. Potential home buyers can manage their expectations and make plans accordingly.

By contrast, China’s system is opaque, causing uncertainty.

Thus, Sun and her boyfriend, who has a Beijing hukou or household registration, are unsure whether to hold out for an affordable home in the capital or to move back to her native Xi’an where the cost of living is lower.

While Chinese leaders have set ambitious targets for building affordable housing, they need also to ensure there is fairness in the allocation of the houses so that the poor, including the millions of migrants who move to the cities in search of a better life, get a decent roof over their heads.

This could determine whether China’s cities go from being places of aspiration to tinderboxes of discontent waiting for a spark.

 

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