Affordable homes still in short supply

Jiang Weixin, head of China's Ministry of Housing and Urban-Rural Development, said recently that the government will impose "two-way controls" over China's housing market in the future. According to experts, this will mean simultaneously strengthening the housing security system and restraining runaway home prices.

In cities like Hangzhou and Changzhou, housing prices are starting to sink under an overabundance of supplies. Under such circumstances, the government should focus on increasing stocks of affordable housing units for lower- and middle-income buyers.

For well over a decade, the development of affordable housing has lagged behind growth in the residential property sector. But this is hardly a surprise considering the lack of legal, financial and administrative supports provided to public housing.

Experiences overseas show us the need to create special funds to finance public housing construction. A well-managed, well-regulated institution is also needed to make sure that funds earmarked for public housing are used for this very purpose. Authorities in China should also consider incentives to lure social capital into public housing.