Research On The The Combination Of PPP And Indemnificatory Housing

After years of efforts, China has gradually established a relatively mature housing security system. This system covers the low-rent housing, public rental housing, economically affordable housing, and other housing types with different characteristics, to solve the housing difficulties of low-income families. At the same time, this system plays a considerable role while maintaining the real estate market stable and the whole society harmonious.However, indemnificatory housing always faces many problems, such as overmuch dependent on government funding, low degree of local government incentive, backward management method with low efficiency, unreasonable housing planning, etc. These problems will always affect the stability and continuity of indemnificatory housing construction projects, hindering them from playing the positive role which it should be. Therefore, we must try to broaden the financing channels, make effort in eliminating these long-standing blocks with innovative viewpoints and methods. Public-Private-Partnership mode (PPP) was introduced into China’s indemnificatory housing construction in this background, while pilot projects are trying it out in several provinces. In May 2015, the state council general office issued documents to emphasize the significance of PPP in the field of investment and financing, including indemnificatory housing. It is obvious that PPP will play a major role with the national resources supporting.If applying PPP in indemnificatory housing projects properly, it will have significant advantage over traditional construction mode. PPP can greatly ease the government’s heavy financial pressure, while giving private capital a new investment channel which is stable and reliable. In addition, PPP can effectively disperse and reduce the project risk, and improve the service quality of project with the aid of the relatively advanced management methods of private sector, in order to bring more benefit to low-income families. The combination of PPP and indemnificatory housing projects has many years of practical experience abroad, and it can create a win-win situation for government, private sector and households. However, from the current outcome, this approach of combination needs further study and practice. But it is undeniable that China already has a range of realistic conditions. This combination is applicable, and should be further applied to indemnificatory housing projects.After demonstrating the advantage and realistic conditions of introducing PPP into indemnificatory housing construction, in order to make this combination perfect in China’s realistic background, the following series of work need to be properly finished. First, choose the most reasonable segmentation mode of PPP according to the actual project and the needs of target population. On this basis, stable source and backflow of funds must be guaranteed, both to ensure the progress of project and accepted earnings of the private sector who has participated in the project. After that, following the reasonable operational process, the participants, including government, private sector, the project company, and others, should cooperate to promote the projects smoothly constructing and operating, finally achieve the expectations of both public and private sides.The combination of PPP and indemnificatory housing is still in the process of development. Some characteristics of the housing itself, as well as new problems after the combination, can bring many obstacles. In the future, scientific countermeasures should be taken in order to reduce the negative effects of indemnificatory housing projects and target population.