Research On The Effective Supply Mechanism Of China's Public Housing

For the realization of the policy purpose that all households own houses to live,Chinese government plans to construct 36 million public houses during the period of"National Twelfth Five-Year Plan".This policy leads to drastic arguments,such as,whether the amount of 36 million houses can resolve historic problems,whether government has the capability to construct 36 million public houses,and whether public houses can be provided to genuine secured households.From the perspective of social welfare,the reasonability of public housing supply lies in the fact that whether all demands for public housing can be satisfied(that is the first controversial issue).But the difficulty in measuring the wedge between demand and supply of public housing is extremely onerous.The most important is that on the basis of the thought about the equilibrium development of society and economy,the reasonable supply level of public housing provided by the local government,as the major and real supplier,is not the supply level of meeting all demands,but is tailored to the level of the local economic development and government fiscal capability.Thus,research on the supply wedge of public housing provided by the local government rather than the wedge between demand and supply has a practical significance.Based on this,this paper analyzes the second and third controversial issues,and focuses on whether the local governments do their best to supply public housing,and why the incentive to the supply of public housing is scarce(from the perspectives of theoretical analysis and practical investigation)and how to engage in the institutional innovation to efficiently motivate and constrain the supply behavior of the local government.In order to investigate whether the local governments do their best to supply public housing,firstly,this paper defines the property of the public good of public housing,and emphases on the local government's role in the real and major supplier of public housing,and clarifies the concepts on the reasonable supply,the real supply and the efficient supply of public housing.Secondly,we establish the standard level of public housing provided by the local government,that is the reasonable supply,and then estimate the real supply and the efficient supply.Based on this,we calculate the extent of the efficient supply scarcity(or supply gap)of public housing.Finally,we divide the efficient supply scarcity(or supply gap)into two parts,namely,the lack of the aggregate supply(the gap between the reasonable and the real supply)and supply failure(the wedge between the real and the efficient supply).We use city-level and county-level micro datum in Jiangsu Province to measure the extent of the aggregate supply scarcity of public housing,and describe typical cases in supply failure of public housing by using the facts originating from the audit reports of public housing issued by the National Auditing Administration from 2007 to 2009 and 2010,and by the Department of Audit of Fujian Province from 2008 to 2010.Through theoretical analysis on the mechanism that institutional factors influence the efficient supply scarcity(or supply gap)of public housing,this paper divides the efficient supply scarcity(or supply gap)of public housing into two parts,namely,the scarcity of the total amount and the supply failure,for the further research.Concretely,there are five threads:the system of fiscal decentralization and the aggregate supply scarcity;the responsibility system for leaders,the assessing mechanism of government performance based on GDP,and the aggregate supply scarcity;the system of fiscal decentralization and the supply failure;the responsibility system for leaders,the assessing mechanism of government performance based on GDP,and the supply failure;the deficiency of mechanism design on public housing,the deviation from carrying out policy,and the supply failure.The results illustrate that:(1)mechanisms that institutional factors influence the aggregate supply scarcity are:? in the system of fiscal decentralization,the motivation that the local government obtains the huge amounts of land-transferring fees and taxes related to the real estate by monopolizing the primary market of the land and establishing the system of land bid invitation,auction and listing,spurs the local government to develop the real estate,which probably is the one of many reasons about the aggregate supply scarcity of public housing.? In the background of the assessing mechanism of government performance based on GDP and the responsibility system for leaders,the public investment to accelerate the economic growth controlled by the politicians of the local government in tenure of office for the purpose of political promotion,is the second reason.(2)Mechanisms that institutional factors influence the supply failure of public housing are:?the high price in transfer of land in the urban center leads to much more land-transferring fees and corresponding taxes,thereby increasing the probability of political promotion.Thus,in the regime of finance and promotion,the local government's makeshift is to construct public housing in the low-price area,reduce public investment and provide low-price land,thereby resulting in the remote location,imperfect amenities and inconvenient transportation of public housing,which eventually lead to the supply failure,such as difficulties in allocation and leasing,the idleness of housing resources.?Mechanism deficiencies,such as the imperfect information system,difficulties in timely and exactly identifying households without qualification for secured conditions and carrying out exit mechanism,lead to the supply failure of low-rent houses that demands of secured household cannot be satisfied.The inefficiency of economical housing results in the unaffordability of parts of secured households.The imperfection of access and exit mechanisms leads to the occurrence of supply failure,such as successfully buying economical housing by parts of unsecured households.After analyzing mechanism that institutional factors affect the efficient supply scarcity(or supply gap)of public housing,this paper investigates this mechanism in practice.In chapter 5,about "the empirical research on the impact of institutional factors on the aggregate supply scarcity",this paper analyses the directions and the impacts of fiscal motivation and official promotion mechanism on the real fiscal expenditure of the local government by using the data from the Department of Housing and Construction of Jiangsu Province.The results show that:(1)Competition among governments is a major reason of supply scarcity of public housing;(2)The effect of fiscal decentralization on supply scarcity of public housing has difference in areas;(3)Compared with county-level governments,the impacts of fiscal decentralization and government competition on supply scarcity of public housing provided by district-level government are more serious;(4)The local government is preferable to low-rent housing rather than economical housing.After analyzing mechanism that institutional factors affect supply gap of public housing from the theoretical and empirical aspects,this paper puts forward policy suggestions in terms of increasing efficient supply of public housing.For examples, optimizing system of tax distribution and assessing on government performance;reinforcing legal constraint and public supervision;improving "access" mechanism;adding "transferring" exit mechanism;recycling the stock of public housing;developing economical housing with shared property rights.