Effectiveness of subsidized home ownership scheme in Beijing

Abstract

With the aggravating housing affordability problem in the Beijing, the capital of China, there are increasing concerns about the effectiveness of the principal subsidized home ownership scheme - Economic and Suitable Housing Scheme (ESHS). The aim of this research is therefor to evaluate and explain the performance of the ESHS in providing affordable housing to its target households. A multi-tier evaluation framework will be established to assess the housing affordability, accessibility, availability and the housing quality of ESHS. Data is gathered from the existing literature, press articles, government documents and reports, semi-structured interviews with government officials and structured questionnaires with residents. It is found that estates located in urban districts have a better affordability performance compared to estates located in suburban districts by using Price-to-Income Ratio and Housing Affordability Index; Further, applying the residual income approach, residents in ESHS have encountered serious difficulty in meeting non-housing consumption requirement after paying for the mortgage. As for the accessibility, eligibility criteria is problematic. As far as housing availability performance is concerned, limited supply of housing units which is due to insufficient land supply prolongs the waiting time. Housing quality is also unsatisfactory in terms of construction quality and poor location.