Guizhou Social Housing Breaks New Ground

By staff reporter ZENG PING

IT is early morning on March 26, 2011, and the construction site of Yu'an New City is surrounded by people, the crowd many rows deep, and most of the onlookers very excited indeed. Lines of orange bulldozers and excavators stand alongside, ready for action.

This is the ground-breaking ceremony of a project to build one million square meters of public rental houses in Guiyang, capital of Guizhou Province. Within two years 16,000 households in the city will move into their new homes. This RMB 2.5 billion project is Guizhou's first public-rental housing project and the curtain raiser for the region's social housing program under the 12th Five-year Plan.

Corporate Social Responsibility

Zhongtian Urban Development Group Co., Ltd. is the only publicly listed real estate company in Guizhou Province. Its chairman, Luo Yuping, is often asked why the group has got involved in the government-initiated low-income housing project rather than pursuing more profitable ventures.

He replies that Zhongtian is a company with its roots in Guizhou and that its 30 years of growth owes much to the great support of local people. With the corporate value of "harmony and responsibility," the group participates in charitable endeavors. In recent years the company has donated about RMB 150 million to philanthropic causes. This latest example – low-income housing construction – is part of its philosophy of contributing to communities and shouldering social responsibility.

As a philanthropic entrepreneur, Luo is clear that low-income housing is a long-term project, demanding sustained efforts in construction, distribution, leasing and property management. However, Zhongtian will manage and develop the project as an undertaking. It is, moreover, an active attempt to realize a "government-initiated, commercially operated" model.

Zhongtian will bring to bear its technology, capital and management strengths. As regards project planning, the company is particularly keen to balance economic gains with social and environmental benefits, and to take up the least amount of land without skimping on building ancillary facilities. Friendly environment, safe and energy-saving buildings were top considerations in the overall design. As to construction, the company gave supreme priority to quality and strict control over every process to ensure high-quality living conditions.

Zhongtian has signed agreements with Guizhou Provincial Government, marking its commitment to the construction of social housing, slum reconstruction and provision of ancillary facilities. In the five years starting in 2011 Zhongtian plans to invest about RMB 20 billion to build 10 million square meters or 200,000 units of low-income housing. Some three million square meters will be started in 2011, four million in 2012 and three million in 2013.

Government Responsibility

According to Li Zaiyong, mayor of Guiyang, in recent years the city has been exploring a new approach to constructing low-income housing in less developed Western China. It has established a complete low-income housing system covering both units for lease and purchase and a multi-channel funding mechanism to support it. Already, over 11 million square meters of affordable housing have been constructed and sold to 120,000 households. And its low-rental housing program provides homes to 22,630 families.

In Guiyang, social housing is divided into two categories – low-rental and public-rental, which respectively target the poorest households and those of better but still modest incomes. Housing subsidies come in graded amounts according to income levels of recipient families. And private owners are encouraged to place their idle flats in the government's housing pool for rent to increase home supply for needy families.

Guiyang has also created new financing methods: it offers incentives for large-scale real estate enterprises to develop, construct and operate low-income housing projects; it also allows farmers to invest their lands as shares into developments on the city's outskirts. In the period from 2011 to 2015 Guiyang aims to develop 8.5 million square meters of public rental housing by soliciting funds from varied sources, which will improve the living conditions of 270,000 families.

The sprawling Yu'an New City includes two public-rental housing sections: Yu'an of 200,000 square meters and Anjing of 800,000 square meters. Both communities are conveniently integrated with the city's public transport and utility networks. New roads are built around them, extending to other parts of the city. And the hot-spring resort nearby adds commercial value to the project. The two developments are expected to be sustainable, well built and landscaped, well equipped, providing every facility with a beautiful environment.

Hopes and Dreams Fulfilled

The ground-breaking ceremony of Yu'an New City attracted floods of local people, many of them would-be house buyers. They looked on, full of hope and delight at the prospect of a new home.

They could see from the blueprint just how well-equipped the residential district would be – with a large green-field area, fitness areas, wheelchair ramps, parking lots and refuse depots. "Way better than you'd expect for a public rental project," enthused Liu Xiaoling.

Ms. Liu lives in a very modest one-bedroom house together with her husband, her parents-in-law and a two-year-old son. "We portioned off part of the living room as a room for my in-laws, and my son sleeps with my husband and me." Harassed by cramped living space and frequently blocked drains, Liu was always thinking about moving somewhere better, but the family's economic circumstances pushed her dream further and further away.

In 2011 Guiyang increased the supply of social housing and relaxed the eligibility criteria. The news gave Liu's family hope – under the new policy, she qualifies to apply for a public-rental house.

"Previously I thought public-rental houses were humble, without landscaping, support facilities or perhaps even no elevators." Reading about the Yu'an ceremony in the paper, Liu rushed over there at the crack of dawn to see what the new houses would look like. The blueprint left her rapturous – it was everything she imagined for a new home. "I wish I could put in my application right now!"

Commitment to Fairness

Public rental houses are intended for lower income families. A remote location would increase residents' transportation costs, creating a drain on their modest finances. The locations were therefore chosen for the best proximity to Guiyang's downtown and for the easiest transportation access. They are totally the same as normal commercial buildings in terms of quality and ancillary facilities, underscoring the commitment to fairness.

Where will public rental houses be built? For a real estate company, this is a huge profit-sensitive issue. The public-rental buildings in Yu'an and Anjing communities are placed in the prime locations in the New City, which also includes commercial housing sections.

In fact, the opening of a couple of thoroughfares last year in the region pushed up local house prices greatly. But Zhongtian still decided to construct public-rental houses in the best location, despite the relatively small return. "We are shouldering our social responsibility, and practicing a local company's commitment to local residents," said Zhang Zhi, vice president of the group.