Housing has become inaccessible for many families in China since the privatization and commercialization of the sector. By delegating powers, improvements are possible, notes Juan Yan in her doctoral research. Moreover, more participation can lead to happier tenants.

Welfare housing in the People's Republic is owned by the government, but their distribution has always been a matter for the state-owned companies. This changed with the privatization and commercialization of public housing in 1998. It quickly caused housing prices in the city to soar, while new affordable housing was only built far beyond it. Families with a limited income and recent graduates find it increasingly difficult to find affordable housing in the city. As a result, central government has been under severe pressures to do something about it, but has not provided adequate financial support for local authorities to implement affordable housing provision.

Leasing land to private parties brings local governments money. And that is important for municipalities that also have to build their own infrastructure. Realizing affordable housing shifted to the second plan, as it only costs money. The consequence is a glaring housing shortage.

From government to governance

In 2010 the Chinese government launched the Public Rental Housing (PRH) policy to prevent further derailment. The core of it is, as Yan describes it, a shift “from government to governance”. The government delegates its responsibility to other parties in the housing market and is listening more to the tenants. Part of the PRH policy is so called Inclusionary Housing (IH), which is also popular in UK. Commercial developers are thereby obliged to realize 5 to 30 percent of their projects in the social segment; they build them for the government.

One big question in Yan’s research is whether PRH governance is effective in the eyes of tenants. Tenants in Chongqing, who she asked for their opinion in a survey, complain about housing conditions a lot. “But remarkably, the complaints are much less for projects where tenants were given a say. People want to be heard.”

In practice, most PRH projects unfortunately turn out to have too little manpower to organize participation efficiently. But using group communication via WeChat - the Chinese WhatsApp - or appointing tenant representatives appears to be a good alternative. Yan: "People who have been delegated by the tenants are aware of the problems that arise in a residential complex and can form a bridge to the government."

Another question in Yan's research is whether the IH approach can be considered as a success. Yes, for the government, but not for the developers. Because they pay for the costs without taking advantage of the rising land revenues. After all, the land will always remain state property. "Developers are therefore only willing to do it in a booming housing market," explains Yan. "Because otherwise they won't earn anything."

PRH dwellings that they do realize within a commercial project often have a lower quality, according to social media and literature. Sometimes even so much lower, that tenants of commercial homes have a fence built.

By dealing with the above, Juan’s study reveals the essence of the current Chinese PRH governance and shows the structures and mechanisms for non-governmental actors to play a role in the governance of PRH. She also shows the tenants’ perspective is important and demonstrates the challenges of Inclusionary Housing in China.