Beijing inks incentives for rental housing

World
Europe

China’s capital Beijing nailed down a set of guidelines that will make renting an apartment the most practical option in a city where property values have ballooned out of proportion.

Beijing’s municipal government Friday published new policies favoring tenants, with an attempt to sweep aside some of the concerns that have made rental housing less feasible in the long run.

As the latest move in a nationwide campaign to curb housing prices and make a living in Beijing affordable for young families and out-of-towners, the guidelines, coming into effect at the end of October, will prohibit rent increases before the end of a contract and allow for children of tenants to attend neighborhood schools.

The children of those who do not own a Beijing Hukou — the residence registration in China that grants access to government services, often encounter massive hurdles trying to get into an elite public school unless their family owns property in the surrounding area.

It is a system that has led to incredible price spikes near so-called "school districts", with a pantry-sized square meter apartment that would permit its owners a slot at a notable public school, changing hands at 260,000 yuan or 38,000 US dollars earlier this year.

Other municipal policies included in the document, such as boosting the credit line of developers of apartment complexes only available for rent, and setting aside land and subsidies to build rental residences near industrial parks and business clusters as to ameliorate the current rental housing shortage.

This could make finding convenient rental apartments a more sensible solution for young couples and migrants who might otherwise only be able to purchase homes in the outskirts of the city.

Housing authorities have been signaling their intention to better support the rental market since 2016, proposing a goal to “lend equal support to home ownership and rentals,” and later, a drive to grant equal rights to homeowners and renters.

And with these guidelines, the nation’s capital, where the residential real estate soared to 35 percent to the rate two years ago, is one of the first to ink comprehensive incentives to make renting a more appealing option amid a property bubble.

Beijing is also planning to set up a government-backed rental housing site, similar to the pilot program launched on Friday by the Hangzhou municipal government and tech giant Alibaba, striving for better vetting and transparency in the rental market.

9km