Housing the Urban Poor in China

Last year UN-Habitat lauded China for reducing the percentage of its urban population living in slums from 37 to 28 in the previous ten years. This week's Economist takes the story further, suggesting that China is using a program of housing the poor in government-subsidized housing as a way of creating not only better housing in its cities, but also jobs.

By unofficial estimates, the average price of a flat in the capital has risen between five and ten-fold in the past decade. So Li Keqiang, who is likely to become China’s next prime minister, is trying to show his mettle by sorting out the problem. Under his direction, local governments have embarked on a campaign to build unprecedented quantities of social housing for the urban poor. Officials have been claiming a spectacular success, but persuading citizens to share their joy is proving another matter.The central government is not just trying to woo the poor. It also sees the project as a way of pepping up the economy at a time of global gloom. This year’s target represents a 70% increase in the construction of social housing compared with 2010 (see chart). In March the government announced a goal of completing 36m units by 2015. If three people on average live in one flat, this would be the equivalent of building new housing for the combined populations of Britain and Poland.

There are concerns, however. For one thing, the government is paying less than 25 percent of the construction costs, so there is skepticism that projects will be completed.

Critics also point out that the social-housing programme will mostly benefit urban residents, whose household-registration certificates, or hukou, identify them as city residents. Migrants from the countryside usually find it difficult to get hold of such certificates, even if they have lived in a city for many years. Most local governments prefer not to hand them out, because to do so would commit them to providing the holder with the full range of welfare benefits.