Using REITs In Financing Approach For Affordable Housing

Nan Chang city as the capital of Jiangxi Province, the real estate industrydevelopment Started late accumulate steadily, the2012price earnings ratio has reached10.04times, it’s three times as identified by the United Nations as a reasonable level.Thegovernment of Nan Chang City immediately following the state guidelines, increasingthe affordable housing construction projects since2010, and led by the Government ofthe construction funds for the construction of protection. But with the starttargetconstantly increasing, the shortage of funds has become increasingly evident, therefore,how to broaden the sources of funds for the construction of affordable housing to becomethe most important issue facing housing projects.This article mostly aims at the affordable housing financing of Real EstateInvestment Trust (Real Estate Investment Trust,or REITs) in Nan Chang city, which is afeasibility study. It’s made of nine parts:The first part, it introduces the selected topic background, research topics and itsignificance, domestic and foreign research progress, and its content. The opinion that weshould make the application of REITs to Nan Chang housing finance is put forward.The second part, it introduces the related theories about REITs, including theconcept, classification, operation require-ments, and so on. Especially in terms of itsadvantages. Mainly about the strong earning power, high benefits and low risks, policysupport, standardized management and sustainable development, etc.The third part, it introduces the REITs experience in foreign countries and HongKong. The United States and Australia represent the western countries, Singapore as therepresentative of Asia, and Hong Kong as a special case in our country. It’s all about theirREITs development and the operation, to introducing the housing security experience inthis four parts. It aims to select the useful experience with the specialoccasion in NanChang city. The fourth part, the article analysis on the real estate development in Nan Chang bythe present situation of the city land supply, development of real estate market, and thepresent land price.The fifth part, it makes the analysis of the operation of REITs on affordable housingfinancing(N-REITs) environment in Nan Chang, including market analysis, legal analysisand the talents. First of all, it is based on the Nan Chang housing construction of thecurrent situation and system. Through the analysis to Nan Chang2012urban residentsper capital consumption expenditure and other financial institutions loan situation,itraises the affordable housing needs of the people’s livelihood and social capital, whichcan be used as a N-REITs sources of funding to support itsformation and development.Secondly, it introduces REITs laws and talent base in our country, the need of the relatedlaw andpersonnel support.The sixth part, is the foundation of N-REITs operation. It puts forward the marketpolicy and the talents. It’s about the reference which is given priority to with publichousing system in Australia and Hong Kong, the securitization of real estate financemarket, the opinion of reducing housing application threshold, housing securityclassification and grading, tax incentives and other policy propose, finally in talenttraining suggestions.The seventh part, is the framework design to N-REITs. It mainly includes theorganization and selection of type, N-REITs operational processes, establishment ofinstitutions and responsibility distribution rules of design, management rules,and the roleof government. Finally, it puts forward the risks of the liquidity of funds, interest rates,and profit.The last part, is the conclusion of the research, including the main ideas, innovationsand shortcomings.