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June 28, 2016

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Home » City specials » Hangzhou

Subsidy program boosts affordable housing

By Wu Huixin | June 28, 2016, Tuesday | Print Edition

FOR a time, Zhang Xiaochun was thinking about moving to the cheaper outlying Xiasha area of Hangzhou after she was told the rent on her apartment in the Xiacheng District would go up 10 percent next month.

Property values around her have been rising amid commercial development in Xiacheng.

“Given my 8,000 yuan (US$1,210) monthly salary, I can’t afford sky-high rents anymore,” she said. “My current apartment is convenient and close to my job, shopping malls, medical facilities and the Metro, but a monthly rent of 3,800 yuan really scares me.”

Hangzhou’s average rent ranks fifth among big cities in China, after Beijing, Shanghai, Shenzhen and Guangzhou, according to the China Real Estate Industry Association. Every square meter now costs about 41.39 yuan a month, up almost 6 percent from a year earlier.

The markup is more prevalent in downtown areas like Shangcheng and Xiacheng districts. The Yanzhixincun community, where Zhang resides, was built in the 1990s and looks its age alongside more recent modern buildings. The community sits at a prime location at the crossroads of Tiyuchang and Zhongshan roads, another factor in higher rents.

“Xiasha is really too far away from downtown, but the lower rents there really attracted my attention,” said Zhang.

The pain of the rent squeeze goes up as incomes go down.

In Xiasha, where Zhang was thinking of moving, new college graduate Zhou Jingqing finds prevailing rents unaffordable. She began a new job in the Xiasha Economic and Technology Development Zone last month.

Nowadays, graduates from leading universities can expect to earn 4,718 yuan a month, according to the 2016 University Graduate Employment Report. Those graduating from less prestigious universities may be paid only 3,726 yuan on average.

“My salary is 4,000 a month now,” said Zhou. “But I have to pay 1,500 yuan for my one-room apartment. I am thinking of moving into a farmhouse with several of my classmates, but group rentals can be a headache.”

Zhang, too, is concerned about that.

Xiasha is notorious for group rentals. Many migrant workers and students cram into crowded, subdivided apartments where living conditions have earned them the moniker “ant tribes.”

In most cases, such group living exists in gray area of the law. Inside old farmhouses and derelict buildings, renters live with packed-together bunk beds and tangles of unsafe wiring. The units are often unsanitary and are certainly fire hazards. Though local authorities have imposed regulations banning group rentals, the phenomenon persists.

In short, Hangzhou needs more affordable housing. The municipal government recently announced that low-income people would be provided rent subsidies or access to low-rent public housing. But strings are attached. Recipients must have graduated less than seven years ago, have annual incomes of 48,316 yuan or less and hold a local household or residency permit. They are required to have signed leases for at least one year and paid social insurance or housing fund fees for at least six months.

Applicants are eligible for monthly subsidies of up to 710 yuan, according to family size.

“I am thinking about applying for low-rent public housing because I would be eligible for a subsidy of only 216 yuan a month as a single person, and that wouldn’t really solve my problem,” said Zhou.

By the end of this year, 2,060 new units of public housing will be completed in Xihu, Gongshu, Binjiang and Jianggan districts. Rent per square meter will range from 10-16 yuan a month, depending on location.

Subsidies and low-rent public housing may be fine for the low income, but Zhang still finds herself in a quandary.

“I cannot benefit from these programs because my annual income exceeds eligibility criteria,” she said. “On the other side, I cannot afford to buy an apartment in the area where I now live because housing prices are so high.”

Indeed, residential property prices have been on the rise for 14 consecutive months. In May, they rose 1.7 percent from April to 18,896 yuan per square meter, according to the real estate association. In prime downtown areas, costs may be as high as 70,000 yuan a square meter.

“My annual salary wouldn’t cover one square meter,” said Zhang, laughing at the absurdity of it all. “And I am not the only one caught in this real estate trap. Young people all over the city are facing the same problem.”

Zhang did search through the Xiasha area for several days, looking for a more affordable apartment. Then she gave up because she thought the area was unsafe and too far from work. Now she is considering buying a 40-square-meter existing flat in Binjiang District.

“I am tired of renting,” she said. “Maybe buying myself a small flat is the only way to solve my problems, even though I will have to tighten my belt to afford a mortgage.”

Hangzhou


 

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