The government is preparing to set up a special department under the Ministry of Construction (MOC) to ensure an adequate supply of public housing.

The new department, slated to begin formal operations around October, will take over the management of basic welfare housing, the Beijing-based newspaper China Business reported. That responsibility currently lies with the ministry's housing and real estate department.

"The application for the establishment of the new department, namely the housing guaranteeing department, has already been submitted to the State Commission Office for Public Sector Reform," China Business quoted a source with the ministry as saying.

Its work agenda will be dominated by issues such as affordable housing and low-rent housing management.

The new department will also be responsible for developing programs, building housing and guaranteeing that policies are carried out, the paper reported.

The ministry's housing and real estate department has struggled to carry out such duties because of a staffing shortage.

The scheme will eventually be expanded from the pilot cities of Beijing and Guangzhou, the paper reported.

"The most urgent matter is to boost the supply of housing," an expert said. "Coupled with affordable and low-rent housing, (the new department) will help ease the housing strain on low-income urban families."

Premier Wen Jiabao pledged at the National People's Congress in March to provide more money to support low-rent housing and increase the availability of affordable housing using fiscally sound tax policies.

According to official figures, low-rent housing was available in 291 cities at or above the prefecture

(China Daily August 21, 2007)