China’s Public Rental Housing Financing Model Research

Since the beginning of the new century, Chinese economy has achieved rapid development, but at the same time the real estate market bubble appears. High house prices became a big concern to the people. Because of the impact of the deterioration of the international economic environment in the past few years, real estate prices rising trend began to slow down, but still far beyond the purchasing power of most ordinary residents. In order to solve the major problem of people livelihood, the government has introduced a new policy to promote the construction of affordable housing. However, there is a "sandwich" group in society, who can’t afford to buy affordable housing, and meet the renting requirements of low-cost housing, so that housing problems become increasingly serious for them. As an important part of the security room, public rental housing can be rented below the average market price levels, so it can solve their housing problems.Due to its protection of property, public rental housing’s rent far below the market average level. At the same time, its capital reclaiming mainly depends on rental income and ancillary facilities. The payback period is relatively long, so the flow of investment capital to this area is low. How to innovative ideas and seek new financing channels becomes a challenge in front of the public rental housing construction.This article aims to summarize the previous point of view based on the introduction and the analysis of several new financing models. Elaborate my understanding of public rental housing financing problems, and strive to find new financing channels for public rental housing financing. Innovative point of this article is trying to set up specialized housing finance institutions to solve the problem of the financing of public rental, and analyze its feasibility. Personally, I think with the appropriate financing channels and government subsidies, the establishment of specialized housing finance institutions is viable and maybe profitable. If financing problems can be solved, it will greatly accelerate the pace of construction of affordable housing, which also can promote commercial housing prices to return to a reasonable level to some extent. This can not only protect the basic housing rights of low-and middle-income class, but also weaken real estate market bubble, which be described as killing two birds with one stone.At the beginning this paper,I describe the background and significance of this research and its ideas and methods, and think about the article innovation and inadequacies; analysis of the domestic and foreign research status on the protection of housing finance, and give an statement about the concept of public rental housing and its signification. Then, by analyzing the course of development of public rental housing in Japan, Germany and South Korea, to understand the characteristics of the public rental financing model, and summarize advanced experience suited to China. Next, introduce concepts and operational framework of the BOT, REITs and PPP financing model, and analyze their advantages and disadvantages. On the basis of understanding those works, I provide my understandings to set up a housing finance agency model, and carry out model feasibility and SWOT analysis. Finally, it talks about my personal overall view of the problem of financing of public rental housing, and a summary of some of the points in this article. On the basis of recognizing articles’articles inadequacies, I prospect public rental housing construction.