Judgment And The City Government Housing Policy, Housing Affordability, Choice

The housing affordability is to measure a household's ability to pay the housing costs and the housing's attributes. If there is a serious housing affordability problem, the municipal government can use different methods to find the reason and assess the degree of the problem, making urban housing policy to solve the problem.This paper focuses on the measurement of housing affordability problems. Since the extensive exploration of the meaning of housing affordability by members of the academic, professional and advocacy communities in the world, it have revealed weaknesses in the traditional ratio standard of affordability, such as House price-to-income Ratio and Housing expenditure-to-income Ratio, and led to arguments in support of some other methods, such as residual income approach and housing affordability mismatch approach, which could identify the affordability of different income group, spatial distribution of affordability problems and the demand and supply of housing affordable in the housing market that the traditional indicators could not. We also improve the housing affordability mismatch approach by integrating the residual income approach and housing affordability mismatch approach, utilizing the statistical data and Housing opportunity index concept to evaluate the housing affordability situation in shanghai from 2000 to 2007. This study concluded that the quickly rise of housing price, polarization of income group and unreasonable size of housing unit supplied are the three main reasons that deteriorated the housing affordability situation in shanghai. The research methods and conclusions of this paper will enrich the concept of the housing affordability academically and offer some useful information for the urban governments when making the urban housing policy.Urban housing policies could solve the housing affordability problems, which include supply policies and demand policies which each one of them has its advantages and disadvantages. In order to solve the housing affordability problem, we also should set up the relationship between housing affordability ratios and housing policy.