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China Daily Website

Affordable housing no burden for local govts

Updated: 2012-03-07 20:42
By He Dan (

Local governments should view affordable-housing projects as their long-term assets that can create revenue rather than financial burden, said a leading economist who is a member of the country's top advisory body.

"Affordable-housing projects are not one-time fiscal spending for local governments, they are assets. If they are built well and under good management, they can be a vital source of public revenue," said Li Daokui, director of the Center for China in the World Economy at Tsinghua University on Wednesday.

The government should mobilize the capital market and private investors to inject money into the construction of affordable units, but the clarification of ownership and all kinds of rights should be determined in advance, said Li.

He also urged the government to shift its attention from the poor to the "sandwiched class" (people who will remain unable to afford commercial property for the foreseeable future but are not eligible for subsidized housing) and to build more affordable housing for them.

The latter group make up a considerable portion of the urban population, especially in large cities, and the local governments can charge relatively higher rent according to individual renters' income levels, Li proposed.

Therefore, the profits in affordable housing are promising, said Li.

Li made the remarks at a news briefing with the four other members of the Chinese People's Political Consultative Conference (CPPCC) National Committee.