Fair Distribution is the Primary Task of Indemnificatory Apartments
On August 7, it was reported that the Study on the Issue of Indemnificatory Apartments in the Progress of Urbanization released by China Development Research Foundation pointed out that, “it is found in the survey that because the local funds for indemnificatory apartments have always been in the state of shortage, at least more than half of the indemnificatory apartments reported by all local authorities are formed by the welfare houses of state-owned enterprises and enterprise employees.” When the remarks were released, people in the whole country were shocked. Later the foundation made a statement to scold that such expression was an untrue report.
However, for the present public opinions, what on earth was the conclusion of the report was not important. In 2011, the government declared that 36 million indemnificatory apartments were going to be built, and the public was filled with exultation yet such an inspiration didn’t mean that there was no noise. It’s because the public expected too much for indemnificatory apartments that they worried these houses might finally benefit others. Now we should say that these worries do not come from nowhere.
What are indemnificatory apartments? In the scheme of “the housing reform in 1998”, it clarified the respective supplying objects of economically-affordable-house and low-rent-house in the social security system, and it has solved the housing problems with the ways of government subsidies and government guarantee so as to ensure the social fairness and differ from the commodity house market that is designed for increasing efficiency. The principles are easy to determine, but the reality is far more complex. Since “the housing reform in 1998”, the government has never clearly defined the term “indemnificatory apartments”. Under the circumstances, due to implicit factors in the construction for indemnificatory apartments such as the economically-affordable-house and price-fixed-house, a large amount of unfair distributions have emerged, thereby arousing lots of criticisms in the society.
The Ministry of Housing and Urban-Rural Development responded later to the remarks of “half of the indemnificatory apartments are welfare house, and put forward the official definition of indemnificatory apartments and their composition. From 2009 to the end of 2011, more than 21 million indemnificatory apartments had been started to build, among them the low-rent houses and public rental houses with renting as the main purpose occupy 20% and 15% respectively, and housing for the transformation of shanty towns occupies 42%. The economically-affordable houses and price-fixed houses with selling as the main purpose occupy 17% and 6% respectively. Yet, can these all be regarded as indemnificatory apartments?
For the rebuilt housing of shanty towns that occupy a proportion as much as 42% of indemnificatory apartments are usually rebuilt together with the development of in-city villages and older parts of city. In the operation, the property right exchanges or money compensation are carried out, and the compensation standards are nearly the same as the market prices of the commodity houses, so it’s rather unconvincing to list them as indemnificatory apartments.
For the economically-affordable houses and price-fixed houses mainly for sale, the potential clients are mainly civil servants, employees of public institutions and state-owned enterprises. They are no other than welfare house, because people who are eligible to apply are mostly not from low-income groups. The rent of the low-rent house is far lower than the market price, the huge interest margin of which makes the low income persons in need cannot get quota to live in while there are low-rent houses being listed for renting in commercial market. Therefore, even if we put aside the rebuilt houses of shanty towns, it is not exaggerated to say that half of the indemnificatory apartments are welfare houses.
In fact, from the simplest funding investment we may see the clue. An institution estimates that at least 1,300 billion yuan is needed for the 10 million indemnificatory apartments, being equivalent to 50% of the land-transferring fees in 2011, and for all the indemnificatory apartments, the fund of nearly 5,000 billion yuan is needed.
In the past a few years, although the government revenue has increased rather fast, the expenditure is even faster. Where so much money can be found to build the indemnificatory apartments? To answer this question it is not unthinkable that the definition of indemnificatory apartment could be distorted, as the rebuilt houses of shanty towns, the relocation houses and price-fixed houses are counted as indemnificatory apartments, finally to inflate the data.
Yet this is not the most critical issue. The key point is that what kind of indemnificatory apartments should be built? Since the start-up of the project of indemnificatory apartments, there are rarely any implementing regulations of policies to clarify the applicable objects for indemnificatory apartments, application methods and
penalty mechanism for violating rules etc. There is no discussion about the number of 36 million, and so it is unknown where it comes from.
The reports of the government on the project of indemnificatory apartments concentrate on how many houses have been started and how many have been completed. At the same time, there arouses many questionable facts: a large number of repeated figures, not paying attention to quality but emphasizing quantity, not paying attention to the demands of users but emphasizing construction progress, and neglecting distribution policies etc. There are rarely any documents that mention who have gained the indemnificatory apartments and whether their demands are really satisfied.
The lessons from the past decade have taught us that the completion of building is just the beginning of challenge, and after that real problems would flood during distribution and actual usage. We have witnessed too many problems. A mismatch of demands in Shanghai makes public-renting houses fail to attract residents, resulting in a consequence that already-built houses remain unused; an inequality in distribution and corruption makes fairness-oriented indemnity housing become a deal of power-for-money, render a project for the poor into apartments for the rich; a negligence in qualities and related services makes living problems frequent, resulting in numerous water seepage and cracks after the heavy rain on July 21 in Beijing.
The real applicable candidates of indemnificatory apartments believe that the houses are built for them with their own wishful thinking yet they find that indemnificatory apartments have become the houses for the rich; they move into the houses with water leakage in rainy days and air leakage in winter. It is at this point that the whole project loses its confidence and trust from the public project. The public-interest projects will certainly become the public-annoyance projects, and may become a factor for social instability. Are such indemnificatory apartments the indemnificatory apartments that we initially wanted?
The crucial reason for all these problems lies in that there are no distribution policies being putting into practice. The distribution policies are only scarcely mentioned that the low-income and low-and-middle-income families are the main applicants, but the policy makers hardly realize how difficult it is in reality to make it work. What the real policies for indemnificatory apartments should firstly make clear is the distribution regulations, clarifying the eligibility of various types of indemnificatory apartments, application methods and handling mechanism for violation. When the applicants have been clearly defined, with the information of their demands, scale and income level, such issues will become clear as what kind of indemnificatory apartments
should be built, how many should be built, what their quality will be, and how much the government subsidy should provide.
It is not easy to make this progress. If the public-interest projects aim at really thinking for the public, the accountability system for the key decisions and government behaviors must be changed. Only when these problems have been solved and made clear, it is possible to rationalize the issues of who is going to provide the fund, for whom the houses are built, and what kind of houses should be built. Of course, though it’s not easy, such a progress always has to be made. There is no way back for the project of indemnificatory apartments which has been developed up to now. It is better to put into practice the distribution policies now, and make the public expectations become concrete and measurable. The public questions can also be responded, the behaviors of local governments can be restrained, and the above measures are worthy for the central government to follow up.
Originally published on Time Weekly | August 16, 2012
