Why is the housing market in China a public issue?

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Why is the housing market in China a public issue?

    China Economic Times News: The so-called publicity, according to the German philosopher Habermas, is the public sphere-"First of all, it means a field of our social life, in which things like public opinions can be formed." It is "a field between private field and public authority, in which the public judges public authority, its policies and other issues of common concern." In this public space, it can not only integrate and express the views formed by folk demands and spread them, but also make public power accept supervision and restraint from the people.


    Then, why is the real estate market in China a public issue? This should be understood from the following three aspects: the talent of individual residence right; The relevance of the interests of most citizens; State ownership of land in China. This is the premise and foundation of the development of China real estate market.


    China real estate market is not only a pure private goods market, but also a market with a considerable degree of public products. First of all, judging from the talent of individual residence right, the publicity of real estate means that the basic residence right of every citizen in China has fundamental priority. This is a self-evident axiom of the existence and development of the real estate market. Because, every citizen’s right to live is the basic symbol of modern civilized society, and it is also the basic right of every citizen. For example, in the recent the State Council Document No.24 on solving the problem of urban low-income residents, there are also clear provisions on this, which also affirmed that real estate is an important livelihood issue. The development of the real estate market is to improve the living conditions of residents and improve the housing welfare level. Under such an axiomatic system, the legal system, development model, operation rules, interest distribution and adjustment of China’s real estate market can only be established, extended and expanded on this basis. Document No.24 of the State Council is a rectification of previous policies, but it is not enough to define the housing security system for low-income urban residents, because the right to live is not the patent of low-income residents, but the right of every China citizen.


    The publicity of China real estate market is also reflected in the interests of most citizens. Because, as a socialist country, China’s economic development, such as the development of real estate, is not only to pursue the level of GDP and how much output value the real estate will increase, but to see whether it is in line with the interests of the overwhelming majority of people and whether it will increase the housing level of all China people. If our real estate market is only the market of the rich and serves only a few people, then it is completely contrary to the interests of the public. For example, at present, the rapidly rising housing prices in China have pushed more than 80% low-and middle-income people out of the real estate market. As some researchers have pointed out, at present, China’s per capita income is only 1/23 of that of the United States, but it has to bear the housing price several times higher than that of the United States.


    The publicity of China real estate market also lies in the state ownership of land. People have the right to transfer or recover state-owned land, to share the value-added of land together, and to share the premium of land attachments. However, as far as the current situation is concerned, due to the immature development of the factor market in China, the unclear definition of government power in institutional rules and the defects in the land management system, state-owned land has become a tool for a few people to make profits and an important way for a few people to plunder the interests of the vast majority.


    In the process of unprecedented urbanization and infrastructure construction in China, all the value-added of land and real estate is very huge, which is closely related to the government’s expenditure on urban infrastructure and services, and the government’s investment is capitalized into the price of real estate. If this huge land and real estate appreciation is not treated and recovered in an institutionalized way, it will not only cause serious unfair distribution of wealth in the whole society, but also lead to the "loss" of state-owned assets.


    Therefore, since the housing problem is a major livelihood issue first, the government should consider it as a major public issue. The real estate problem is faced with all Chinese people. Because of class, wealth income level, preference for housing demand and different living culture, it is impossible for its policies to meet the different needs of all people without adopting public decision-making methods.


    In recent years, the government has made more and more macro-control on the real estate market, but the effect is getting worse. The key point is that the government departments have always regarded China real estate market as a private goods market. In this case, the real estate policy can’t adopt a democratic and scientific agenda setting of public policy, but it is only determined by a few elites of a few government departments, and even set by a few elites captured by special interest groups. This makes it impossible for China’s real estate market to reach the balance of interests of relevant stakeholders.


    Secondly, the publicity of the real estate market in China is also reflected in the problem of how to allocate the huge wealth premium in the process of capitalization of the real estate market. There are both land premiums and land attachments. If the real estate market is only regarded as a private product, then this huge wealth that should belong to the people of the whole country will be regarded as the result of the management of real estate developers and local governments, and will easily flow into the hands of a few people.


    Earlier, real estate developers were able to transfer a lot of land from the government at a very low price, and hoard these land, even hoarding real estate to push up housing prices. From the market point of view, from the private nature of housing, this is understandable. For real estate enterprises, profit maximization is their nature. But the problem is that the government ignores the publicity of real estate, and does not regard the huge premium of the real estate market as a wealth shared by the people of the whole country, so that real estate development enterprises can easily make profits. It can be said that this premium is impossible without a large amount of basic investment and service input from the government. Therefore, if this premium only becomes the profit of real estate development enterprises, it will be unfair to all China residents. For example, at present, some developed local governments only regard land and land income as local ownership, so it is unfair to economically backward places under the state-owned land system.


    Finally, the publicity of China real estate is also reflected in the publicity of the policy agenda of the real estate market. Because, in any society, government resources are limited. Faced with this limited resource, the government has to make a choice before making a specific decision. So why are some real estate market problems discussed on the table, while others are excluded? We people must understand: how does the government set its agenda when formulating the real estate market policy? Who is involved in setting these agendas?


    In recent years, there have been frequent policies in China real estate market, but many policies are not only public in content, but also not public in policy agenda setting, which makes many major real estate market problems, especially those involving the vital interests of the general public, unable to enter the real estate policy agenda setting. If you can’t even set the policy agenda, it is difficult to guarantee to solve these problems.


    In a word, publicity is the most important aspect of the real estate market, and there are many contents to be studied on the publicity of real estate. Let’s make some discussions here, hoping to take this as a starting point and attract more attention from domestic academic colleagues. (Yi Xianrong)


Editor: Zhao Xuanxuan

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