China does need a multi-layer housing security system, says an editorial in Oriental Morning Post. The following is an excerpt:

A recent article by Xinhua News Agency pointed out that rising house prices show no sign of stopping in China.

According to a report by the National Bureau of Statistics and the National Development and Reform Commission, housing prices in 70 major Chinese cities were up a record 7.5 percent in July from the same month last year.

When prices keep rising, the most important way to guarantee housing for low and medium-income families is to build a multi-layer housing security system. It is the government's major responsibility to solve the housing problems of low and medium-income groups.

The first layer of the housing security system should be low-rent housing provided by the government for the urban poor. The second layer is for low and medium income earners, they account for about 70 percent of the total population. The government should provide monetary subsidies, favorable interest and tax rates. The third layer should be commercial housing with capped prices for those who are not qualified for the second layer but also cannot afford commercial housing.

The current problem is that many regional governments have not attached enough importance to housing security. The policy is not complete. There are no long-term plans.

Land reserves are limited and most low-rent and low-price housing are in city suburbs, which makes life inconvenient and increases the cost of social management. Furthermore, existing low-rent and economically affordable housing are insufficient and of poor quality. At the end of June, there were more than 60 cities that had not provided low-rent housing. Thus the local government's function to establish a security housing system should be clarified and regulated.

The State Council has publicized opinions on solving the housing difficulties of urban low-income families. A multi-layer system is now under deliberation.

(China Daily August 23, 2007)