A Case Study On Private Enterprises Participating In The Construction Of Public Rental Housing In Changchun

In recent years, with the gradual development of China’s economy, growing population in large cities, further improvement of urban and rural reform as well as expansion of open-door to the outside world since the 1990 s, there are large-scale of floating population in large cities, resulting in intensive urban population. Since most of the floating population in the city belong to middle and low income groups, the middle and low income groups housing in the city will be the main direction of China’s real estate market development; Therefore, the housing problems of middle and low income groups has become an important livelihood issues in China, and the government also has introduced relevant measures in this regard. China’s "low cost housing" policy since 1998 has solved part of the housing problems of low-income groups, and China also has become more aggressive in economically affordable housing and construction housing of shantytown renovation; While with the increasing housing prices in recent years, it becomes more and more difficult for the middle and low income groups to buy a house in city. The middle and low income groups are in a state of " sandwich class", and they can not enjoy the security policies of "Low-cost housing" or "economically affordable housing" that for low-income people. Because of the continuous expansion of middle and low income groups in large cities, their housing problems have gradually attracted the government’s concern. In order to change the situation of housing difficulties for these "sandwich class" groups, China has introduced the "public rental housing", referred to as public housing. Furthermore, as the capital of Jilin Province, in order to accelerate the development of public rental housing, quickly adapt urbanization so as to better implement the national policies, Changchun municipal government plans to perfect the Changchun city’s housing security system by adjusting the housing supply structure within the city. In this paper, with the combination of the actual situation of Changchun City as well as some relevant preferential policies on supporting the development of "public rental housing", it analyzes that China has sped up the advancement of public rental housing to solve the periodical housing difficulties that faced by middle and low income groups in the cities. It also takes Changchun City as a case to analyze Changchun city government has made a series of policies to encourage the private enterprises to participate in the development and construction of public rental housing so as to better develop this public housing business that benefit to people’s livelihood.Firstly, this paper makes qualitative analysis on the nature of the public rental housing, then it describes the role of public rental housing in our country’s security system and the public housing development situation in international world and the progress of public rental housing development in China’s large cities. Secondly, this paper also has made a detailed analysis on the natural environment condition, public facilities and environmental impact that a certain private enterprise participated in the public housing in the body of the case. The analysis shows that the private enterprise apply for the public rental housing construction by its owned land is complying with the technical "hardware" construction conditions of this project.Since the construction funds of indemnificatory housing such as "Low-cost housing" and "shantytowns transformation" are all from governmental fiscal funds, that is to say, the capital financing channel has also become a difficult problem of affordable public housing construction. While the government regulates that the construction funds of public rental housing can be flexible, which also can attract the investment of social funds(private sector enterprises), and the government will give appropriate preferential taxation policies and local incentives; But the public rental housing itself still belongs to welfare protection rooms, and its operating profit is not stable, leading private companies do not want to participate in its investment. Therefore, in the case study, this article also has made analysis and evaluation on the financial feasibility of the private enterprise, making an analysis on the total profit, payback period, net present value and internal rate of return of this public housing project. The conclusion is that it is feasible for the private enterprise to construct the public rental housing, and it can ensure corresponding profits of the enterprise and the use of the idle land. While in terms of China, it also can promote the rapid development of public rental housing and solve the housing problems of middle and low income groups. It is a mutual benefit relationship that the government and the enterprise jointly develop the public rental housing.Because China is advancing the urbanization rate at this stage, the new graduates are just enter the society with alien workers, the contradiction of periodic insufficient payment capacity of these middle and low income groups has become more and more obvious, and the living conditions badly need improvement. So, the development of public rental housing at this stage are mainly for these middle and low income groups as well as improving China’s housing security system so as to cultivate China’s unsound rental housing market. What is more, it also can meet the basic needs of family housing of urban middle and low income groups, which is an important initiative to develop public rental housing. Finally, this paper proposes that China should also strengthen policy support of the public rental housing, and it also presents the relevant management suggestions on the private enterprise’s participation in public rental housing construction.