Pilot programs for rental housing launched

China will launch pilot programs to use collective construction land for building public rental housing in 13 cities including Beijing and Shanghai, according to a guideline jointly released by the Ministry of Housing and Urban-Rural Development and the Ministry of Land and Resources on Monday.

Under the new rule, the management of public rental housing should follow relevant regulations and contracts, and paying rent as a deposit toward purchasing an apartment will not be allowed. Also, the public rental properties should not be sublet to other individuals.

Other cities involved in the pilot program include Nanjing in East China's Jiangsu Province, Hangzhou in East China's Zhejiang Province, Hefei in East China's Anhui Province, and Xiamen in East China's Fujian Province, according to the guideline.

The authorities will also explore a mechanism that can influence and guide the rental market price, as well as supervising any "abnormal fluctuations," the guideline noted.

In addition, local authorities should also guarantee that tenants have access to basic public services. For example, tenants can apply for residential permits based on their rental contracts, said the guideline.

The move aims to increase supply in the housing rental market and create a housing system where purchasing and renting are equally important, contributing to the long-term stable and sound development of China's property market, said the guideline.

"The guideline will have a major influence on the housing rental market in terms of supply in the 13 designated cities," Zhang Dawei, chief analyst with real estate agency Centaline Property, told the Global Times on Monday.

It will also crack down on the supply of houses with limited property rights in the rental market and amass a supply of "regular houses," or apartments with 70-year land use rights, in first-tier and second-tier cities, Zhang noted.

The guideline will reinforce Chinese authorities' efforts to eliminate speculative housing purchases, rein in the real estate market and ensure tenants are eligible for the same rights as homeowners, Yan Yuejin, a research director at Shanghai-based E-house China R&D, said in a note sent to the Global Times on Monday.

So far, around 20 cities in eight provinces across China have issued policies to boost the rights of tenants, Zhang noted.