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Soaring real estate prices make it imperative for the government to deliver the affordable housing it promised for low-income families.

 

Official statistics show that the average price of new houses in 70 major Chinese cities rose 5.9 percent annually as of last month.

 

Though the price increase was 0.2 of percentage point lower than that of January, it does not amount to good news for low-income would-be buyers, especially those in large cities.

 

Beijing, Shenzhen and Guangzhou all witnessed near double-digit growth in housing prices in February. Meanwhile, Shanghai saw a tentative rebound in housing prices, which had been falling for months.

 

Given the importance of the real estate industry in boosting economic growth and improving people's housing conditions, the government should certainly try every means to promote the industry's sustained and sound growth while getting the overheated market under control.

 

The public's growing pain caused by rising housing prices also demands close attention and prompt response from the government.

 

When addressing the National People's Congress this month, Premier Wen Jiabao said that the government will pay particular attention to addressing the housing problems of low-income families.

 

While stressing strengthened oversight and regulation of housing prices to cool down the sector, the premier also promised more fiscal and tax policy support to finance a sound system of low-rent housing and increase the availability of affordable housing.

 

Clearly, these measures, if properly implemented, will be crucial in improving housing conditions for low-income families.

 

However, as housing prices shrug off the government's tightening measures and keep surging, some local governments are dragging their feet on taking responsibility for expanding the supply of affordable housing.

 

For instance, a South China city's attempt to encourage enterprises to build low-priced housing for their employees shows failure of the local government to take responsibility. The approach is bad not only because it will not provide real low-income families with the affordable housing they need but also because it tends to worsen income disparity.

 

Admittedly, it takes time to increase the supply of affordable housing. Soaring housing prices only make it urgent for the government to focus more efforts on the task.

 

(China Daily March 21, 2007)