Shanxi Province, Study On Housing Affordability Of Urban Residents

Since the reform of housing commercialization in1998, China’s housingdistribution has transformed from materialization to monetization. But the growth ratesof housing prices are much higher than the wages of workers. In this case, China’saffordable housing policy has emerged. Although the affordable housing policy has beencarried out, some low-income families are still difficult to pay high room rates, becauseof the affordable housing system is not perfect. Then the government and all sectors ofthe community pay more attention to seeking the methods actively to improve thehousing condition of residents. It is driven by this urgent realistic demand, as aconsequence, more and more people have focused on the housing affordability ofresidents and this issue has become the hotspot for the academic world.The connotative meaning of the affordable ability of people refers to consideringthe macroeconomic level, housing development policies and household disposableincome, consumer habits and other factors on the microscopic level, which is based onChina’s basic national conditions, active market demand and lease system, and residentsstrongly housing consumption preferences. Thus, according to the housing affordabilityof residents, the government can introduce targeted security policy; the real estatebusinesses can make more flexible development strategy; financial institutions canchoose the right loan amount; buyers can choose the suitable housing.In order to make full use of the housing affordability, the key point is that weshould grasp the factors affecting the housing affordability. However, the housingaffordability of residents in different regions should be based on local conditions andthen measure the housing affordability of residents reasonably. At present the matureresearch results of the aspects of the housing affordability are in big cities of China, theless developed regions of housing affordability studies are very limited. This study willfocus on underdeveloped Shanxi Province’s housing affordability, and in this kind ofresearch area is in a minority. In addition, the measurement methods of the housingaffordability are also very critical. Domestic measure algorithm for this area is mainlystatic price earnings ratio in the majority, and the defect of this method is that the wholeprocess is analyzing with a constant static angle, ignoring the situation of loweredhousing-price-to-income ratio caused by the growing ratio of household real income. Inthis study, we will compare the static housing-price-to-income ratio approach, dynamic housing-price-to-income ratio approach and residual income approach as ourmeasurement methods, and that can intuitively reflect the relationships between thepeople’s income levels and room rates.In this study, we will use the examples of the housing affordability of Shanxiresidents as the research object, combining the basic theory and measurement methodsof the residents’ affordability, to elaborate on the conceptions of the standard rate type,static/dynamic housing-price-to-income ratio and residual income approach; analyzingthe factors of economy, policy and consumer habits that they are affecting residentialhousing affordability, to provide strong guarantee for judging the residents’ housingaffordability reasonably; according to the Shanxi Province’s housing market supplystatus and the resident’s demanding status, deeply analyzing the existence operatingproblems of the residential housing market and highlighting the imbalance supply anddemand and the rapid increased housing prices, which are the main reasons that couldlead to lower the residents’ affordability; linking theory with practice, using thescientific static/dynamic revenue approach and residual income approach, combiningwith the actual data in Shanxi Province, scientifically measuring the housingaffordability of residents; from a macro and micro perspective, summarizing theeffective measures and the feasible suggestions for upgrading the housing affordabilityof urban residents in Shanxi Province. We sincerely hope the above analysis andresearch can provide reference for the general residents who are concerning about thehousing issues.