Study On The Risks And Strategys Of Inclusionary Mode For Affordable Housing Buliding

With continues economic growth in China, we observe more and more immigrations from rural areas to urban areas. Therefore, a stable residential condition has become a necessity for those who plan to stay in the city to realize their ideal life. However, the price of commodity housing in urban areas has been growing drastically and exceeded the growth in people’s disposable income which makes people in the middle or low income level very hard to afford. Under the above circumstance, the central government of China keeps working on the construction of the affordable and secure housing and proposed the specific target of "constructing36million affordable housing units" in the "12th Five-year plan".From previous experiences of affordable housing construction, we saw the government has become the major supplier of the new affordable housing, thus we could expect the enormous burden coming with the central government’s target on the shoulder of Chinese local governments. With this pattern, the government would take the construction projects simply for fulfilling the target of the central government instead of being self-motivated. At the same time, the lack of the funds, unfavorable allocation of the lands for affordable housing construction and etc have become problems for the government too.Since2007, some of the local governments have tried to develop a new pattern that stipulating the commercial real-estate developing enterprises to construct a certain proportion of affordable housing with each commercial project and this pattern has drawn more and more attention. While there are some obvious benefits associated with this pattern for local governments, for example, the local government doesn’t have to allocate lands for affordable housing individually, the funds would be provided by commercial real-estate developing enterprises and the problem of differentiated residence of people from different classes could also be somewhat resolved. However, the government tends to underestimate the policy risk of this new pattern. The lack of comprehensiveness in objective planning, the lack of planning in constructing period, the arbitrariness in distributing period and the chaos of management in the final period would definitely lead to new problems when the government applying this pattern.It seems this pattern would raise the entry cost, the difficulty in sales for the commercial real-estate developing enterprises and reduce their profits while the residents would also have to face the problems of community disconnection, change of the cultural environment, the raising living costs and etc. At some stage, the government may also have to pay the price for these problems faced by firms and residents.For dealing with the potential risks faced by the above mentioned three parties respectively and improving the pattern as we pointed at the beginning of the second paragraph. Based on the previous experiences and theory of "inclusionary zoning" from the US with our current conditions, this paper proposes a strategy to avoid the potential risks of the current new pattern. We argue that with legislation, specifying project’s standard at the beginning of constructing period, setting reasonable fees for construction across regions and improving the stimulating policy and community connections should be implemented. Meanwhile, in the middle period of distributing, the fair and efficient mechanism of entry and exit should be designed, In the final period of managing, we should focus on reducing the burden on the people as the recipients of affordable housing, improving the community connections and prepare comprehensively to sustain the development of the affordable housing construction pattern.