The Innovation Of Financing Of Public Rental Housing In China

China has long history of five thousand years. Traditional Chinese people has been pursuing the dream of " live and work in peace". Living comfortable is the foundation of working good, so chinese people care more about their own house than any other country in the world. However, the current situation of Chinese housing market is tough for most poeple——commercial housing prices continue to rise, affordable housing supply continues to lack. Since2009, the china central government has stressed the importance of the construction of affordable housing, in order to enrich the housing market. However, the effect is not ideal, especially for public rental housing, whose construction progress is still very slow.The target of public rental housing among low-income groups, university graduates, migrant workers and other social sandwich layer. The construction difficulty is based on its financing problem, and its financing problem is based on its low rate of return.Public rental housing’s rate of return can be interpretaed by two parts: construction profit and investment rate of return. On the one hand, public rental housing requires huge capital, the collection cycle is long, so the construction profit is very low; on the other hand, the public rental housing lacks of long-term operation mechanism, capital flowing and exiting is very difficulty, the investment rate of return is not attractive. Therefore, the need for innovation of public rental housing financing mechanism is urgent, which is the focus of this paper.If we can combine govrnment support(including cost support and income support) and market-oriented financing method REITs(real estate investment trusts), we can solve the financing problem of public rental housing effectively. In addtion, the author will dicuss more questions such as which goverment support method is more effective, how to construct a effective REITs, what are the main factors affecting the REITs, etc. Finally, accroding to the research results, this paper takes the inspect of gverment, and puts forward the policy recommendations of public rental housing.Overall, through theoretical research and empirical analysis, this paper reached the following main conclusions:First, the reason why public rental housing construction is slow is because its financing problem, while the reason why public rental housing has financing problem is because its low rate of return. So increase the rate of return is the breakthrough to solve all the above problems.Second, the public rental housing’s rate of return contains two stage index: construction profit in constrcuting period, and investment rate of return in operating period.Thrid, government support(including cost support and income support) can increase the construction profit, and market-oriented financing method REITs(real estate investment trusts) can increase the investment rate of return. If we can combine these two methods together, we can solve the above problems and finanlly constcut a revalutional finacing mode of public rental housing.