introducing financial resources to support the construction of affordable housing
2024-09-20
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affordable housing is an important part of my country's housing supply system. accelerating the construction of affordable housing is a necessary step to build a new model of real estate development and promote the stable, healthy and high-quality development of the real estate market. the "decision of the cpc central committee on further deepening reform and promoting chinese-style modernization" adopted at the third plenary session of the 20th cpc central committee emphasized the need to increase the construction and supply of affordable housing to meet the rigid housing needs of the working class. as the core of the modern economy and the blood of the national economy, finance plays an irreplaceable role in increasing the construction and supply of affordable housing.
unlike commodity housing, affordable housing has special benefits for the people, such as capital preservation and small profits. therefore, large-scale construction of affordable housing requires long-term, low-cost, and sustainable financial support, whether it is new construction or renovation of existing housing. in addition to central and local financial support, it is also necessary to use financial means to support the construction of affordable housing. in recent years, relevant channels and paths have been explored and expanded from multiple aspects.
on may 17 this year, the people's bank of china announced the establishment of 300 billion yuan of affordable housing refinancing, which will be issued at 60% of the loan principal and at an interest rate of 1.75%. in the future, it will drive bank loans of 500 billion yuan to support local state-owned enterprises to purchase completed but unsold commercial housing at reasonable prices for use as allocation or rental affordable housing. previously, since the people's bank of china restarted mortgage supplementary loans, it has invested 500 billion yuan to support the promotion of affordable housing construction, "peaceful and urgent" public infrastructure construction, and urban village renovation "three major projects". the term of this loan can be up to 5 years, and the cost is relatively low, which can better adapt to the funding needs of affordable housing construction. as of may 27, 2024, the national development bank has issued 819 million yuan in affordable housing development loans, supporting the construction of more than 3,100 new affordable housing units. as of the end of april, the agricultural development bank of china has connected 15 affordable housing projects and approved 204 million yuan in affordable housing development loans.
the people's bank of china and the state administration of financial supervision and administration issued the "opinions on financial support for the development of the housing rental market", which clearly stated that "financial support for the development of the housing rental market should be based on market allocation", and supported enterprises and qualified institutions to purchase existing idle houses in batches in accordance with laws and regulations for use as dormitory-type affordable rental housing. subsequently, major commercial banks stepped up efforts to establish a housing rental credit product system covering the entire cycle of rental housing projects, including housing rental development and construction loans, housing rental group purchase loans, and housing rental operating loans, and formulated supporting management measures to lower the entry threshold and optimize the approval process.
however, the supply and demand relationship in my country's real estate market has undergone major changes, and the capital demand for affordable housing construction is still difficult to meet. it is necessary to actively explore a financial service model that is compatible with it, and in accordance with the requirements of "accelerating the establishment of a housing system with multiple suppliers, multiple channels of guarantee, and both rental and purchase", further improve and perfect the all-round, multi-level, multi-subject, and multi-channel financial support system for affordable housing on the premise of increasing fiscal investment, improving policy preferences and incentive mechanisms, and improve the efficiency of capital utilization in investment, financing, and operation.
first, commercial banks are encouraged to provide affordable housing development loans and personal housing loans in accordance with the principles of marketization, rule of law, controllable risks and commercial sustainability, increase credit resource input, implement special funds for special purposes and closed management, and provide diversified, multi-level and full-cycle financial products and financial service systems for the investment, development, construction and operation of affordable housing, so as to reasonably meet the financing needs of projects. on the one hand, we will continue to make good use of the affordable housing refinancing policy and increase efforts to purchase the existing commercial housing for use as affordable housing. on the other hand, we will support commercial banks in issuing financial bonds to raise funds specifically for increasing the issuance of housing rental development and construction loans, group housing purchase loans and operating loans; we will encourage commercial banks to issue housing rental development and construction loans to various entities such as real estate developers and industrial parks for the construction and renovation of long-term rental housing in accordance with the law. in addition, we will adhere to the principle of capital preservation and small profits, increase the support of commercial banks, increase the proportion of medium- and long-term loans, and form a medium- and long-term funding system to support the construction of affordable housing together with policy and development banks.
second, we encourage policy-based and development financial institutions to continue to deepen government-bank cooperation, strengthen the guarantee of credit resources for affordable housing, conduct project due diligence and review, strictly implement account supervision and other measures, and ensure that funds are used for specific purposes and under closed management, on the premise of complying with their own functional positioning and business scope.
third, improve the functions of the capital market and enrich and innovate long-term investment and financing tools for affordable housing construction. it is recommended to optimize the bond issuance process and support affordable housing investment, construction and operation companies to conduct financing through the bond market to meet their long-term and large-scale funding needs. based on the characteristics of long-term holding of affordable rental housing and obtaining stable rental returns, it is possible to consider launching affordable rental housing reits projects, transforming illiquid heavy assets into highly liquid financial products - publicly traded reits fund shares, and introducing equity funds to provide market-based financing support for enterprises to revitalize existing assets. broaden diversified investment and financing channels, give full play to the role of insurance funds, real estate investment trusts, and financial derivatives, and provide long-term financing facilities for affordable housing construction.
fourth, explore effective ways to support the construction of affordable housing with long-term special government bonds. ultra-long-term special government bonds have been issued for several consecutive years, and we can try to include eligible affordable housing projects in the scope of support for local government special bonds. in addition, under the premise of ensuring the safety of loan funds, we support the use of housing provident funds to issue affordable housing development loans.
(source: economic daily. author he dexu is the president and researcher of the institute of financial and economic strategy of the chinese academy of social sciences)
source: economic daily
