Current Chinese Economic Report Series Jiahua Pan Houkai Wei Editors Annual Report on Urban Development of China 2013 Current Chinese Economic Report Series More information about this series at http://www.springer.com/series/11028 Jiahua Pan • Houkai Wei Editors Annual Report on Urban Development of China 2013 Editors Jiahua Pan The Chinese Academy of Social Sciences Beijing, China Houkai Wei The Chinese Academy of Social Sciences Beijing, China Sponsored by Innovation Project of CASS ISSN 2194-7937 ISSN 2194-7945 (electronic) Current Chinese Economic Report Series ISBN 978-3-662-46323-9 ISBN 978-3-662-46324-6 (eBook) DOI 10.1007/978-3-662-46324-6 Springer Heidelberg New York Dordrecht London © Social Sciences Academic Press and Springer-Verlag Berlin Heidelberg 2015 This work is subject to copyright All rights are reserved by the Publishers, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publishers, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publishers nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made Printed on acid-free paper Springer-Verlag GmbH Berlin Heidelberg is part of Springer Science+Business Media (www.springer com) Preface: Breaking the Existing Pattern of Rights and Privileges to Accelerate the Process of Citizenization In China, the process of allowing more rural migrants into urban areas to become registered city residents (citizenization) remains stagnant despite its importance to the Chinese government and the existence of a national consensus about it Why is that? Is experience available from other countries? How we solve this problem? Perhaps through institutional inertia, vested interests are hindering the process of citizenization in China Derived from China’s hukou system, or household registration system, that unfairly favors urban residents over rural ones, the inequitable distribution of benefits between institutionally favored groups and others, and between state-owned enterprises (SOEs) and private companies, for example, has resulted in advantaged groups and vested interests obviously wanting to maintain and cement this pattern while the disadvantaged groups and those whose interests are damaged are unable to change it In China, cities can compulsorily purchase land from farmers at low or even no costs, but most profits from added land value are usually unavailable to farmers who rely on land for a living, generation after generation Assuming annual profits of one trillion yuan1 from land trades and transfers across China, then China’s cities can absorb a total of 10 million rural migrants at the cost of 100,000 yuan per migrant or 20 million at the cost of 50,000 per migrant Unfortunately, children of migrant workers in China are deprived of the right to compulsory education despite the fact that these workers pay taxes in their host cities and their employers pay the so-called “city construction fees” and “educational surcharge” Payments to migrant workers should be able to cover basic expenses of the family In particular, they should cover not only the costs of necessities and the living support for dependents such as the elderly and the disabled, but also the cost of raising children In some cities, however, the rights and interests of migrant workers are overlooked Local governments may go so far as to conspire with relevant companies to underpay and/or postpone payment to these workers Even some state-owned organizations offer unequal Wu Jinglian noted at the China Development Forum held on March 23–25, 2013 that the Chinese government had earned 30 trillion yuan from expropriating farmland for urbanization, http:// finance.qq.com/a/20130323/001590.htm v vi Preface: Breaking the Existing Pattern of Rights and Privileges to Accelerate… opportunities and payments to employees depending on whether they subscribe to the aforementioned unfair institutional arrangements or not Decision makers in certain Chinese cities seem to believe in the theory of cost while ignoring that of rights or benefits in an apparent attempt to favor vested interests There are also think tank members who, despite their supposedly interest-neutral nature, employ biased methods and draw prejudiced conclusions Nonetheless, such incomplete urbanization, which can be compared to catching fish by means of draining the pond entirely, is doomed to be unsustainable and is certainly unlikely to make the Chinese Dream come true The provision of equal opportunities and basic support in the process of urbanization in developed countries deserves closer study Take Chinese people who have gone to study in the United States for example After graduation, except for a minority who stay in the academic or research sectors, they tend to work in private companies or start their own business It seems clear that there are few difficulties caused by the institutional bias evoked above.2 In Japan, the urbanization rate was only 27.8 % in 1945 but increased rapidly to 72.1 % 25 years later, a rate nearly twice that of China To provide workers with housing, Japan spent public funds building public hostels It was in the early 1960s that Japan launched a program to decentralize human, financial and physical resources from big cities to smaller towns, thereby facilitating the employment and citizenization of Japanese people in their respective places of residence.3 In the period between independence and the early 1980s, Singapore, as one of the four Asian Dragons, became industrialized and urbanized rapidly The Housing Development Board (HDB) provided 80 % of Singaporeans with apartments within only some 20 years In the 1990s, there were nearly 90 % of Singaporeans living in buildings provided by the HDB In the twenty-first century, the HDB has launched the Studio Apartments (SAs) program for the aging population One-bedroom SAs are 35 or 45 m2 in size and sold on 30-year leases at SGD 47,800–71,700.4 With a small territory and high population density, and by adopting a combination of state monopoly and privatization policies, Singapore has managed to achieve near-universal coverage of housing assistance while at the same time securing a fuel for national development in the long term.5 Breaking down the existing distributive pattern of rights and privileges requires legislation and law enforcement We are unable to maximize national and social interests if our cities are at the same time aiming to maximize their own interests while ignoring those of rural migrant workers It is similarly impossible to assure The Heilongjiang Morning Post reported on January 5, 2013 that the city of Harbin publicly recruited cleaners from around China and that of the 29 candidates who had master’s or doctoral degrees had got the job Lan Jianzhong: “How did Japan turn farmers into registered city residents”, Reference News, April 24, 2013, p 11 Lawrence Chin, 2004 Public Housing Governance in Singapore: Current Issues and Challenges, Department of Real Estate, National University of Singapore Wong Tai-chee and Guillot Xavier, 2004 A Roof over Every Head: Singapore’s Housing Policy between State Monopoly and Privatization IRASEC-Sampark, p 256 Preface: Breaking the Existing Pattern of Rights and Privileges to Accelerate… vii the financial and social interests of 260 million rural migrant workers only through the efforts of the 31 migrant workers who are delegates to the National People’s Congress (NPC).6 Before reform and opening up began, the distributive pattern of benefits in the Chinese society was relatively simple, which was one of urban–rural dichotomy After that, the distributive pattern, while remaining in essence dualistic, i.e., pitting urban against rural areas, features a larger number of and finer-grained categories, including those with either urban or rural hukou, and those with either urban or rural hukou that live in metropolitan areas, as well as those who lack of hukou registered in cities (or towns) To break through the existing distributive pattern of rights and privileges, we must first legally clarify and confirm the social costs and benefits of citizenization so as to let everyone who contributes to China’s industrialization and urbanization, whether he/she is an old or new citizen, or a rural migrant not yet registered on the local hukou system, benefit from its reform and development We should know what the costs and benefits are Second, we should make laws to decentralize social and economic resources and make them market-oriented The reasons why Tier cities and provincial capitals are suffering serious urban problems, such as being overburdened with a great number of rural migrants, primarily include the monopoly of economic and social resources caused by the centralization of administrative powers In China, almost all the best education, medical, cultural, sports and other resources are centralized in Tier cities and provincial capitals In contrast there is a shortage of job opportunities in Tier and cities, where people often find it difficult to make a living Third, and most important, is law enforcement instead of selective law enforcement We should say that China already has a rather complete legal system consisting of the labor law, the compulsory education law, the social security law and so on Nonetheless, some cities and decision makers opt for selective law enforcement or the circumvention of particular laws, making it impossible to effectively enforce laws The average salary income at a monopolistic SOE should never be much higher than the average national income if it is all-peopleowned; proceeds from the sale of reserved land for urban development, if it is stateowned, can add much to the fund for building houses that ensure the citizenization of rural migrants The constitution grants people the right to vote and be voted for, which should not be denied where rural migrants work and live With institutional arrangements that lead to an urban–rural dual structure, Chinese cities have been receiving direct and indirect benefits from rural migrants since the country began the process of reform and opening up But at the same time they have overlooked, or even refused, to give citizenization-relevant benefits to such migrants This has greatly hindered the process of citizenization while continuously increasing the already high social, economic and environmental costs Workers recruited from rural areas before China began the process of reform and opening up, In China, the number of migrant-worker delegates to the NPC increased to 31 for the 12th NPC from three years ago; they represent 260 million migrant workers Yao Xueqing: “Thirty-one migrant-worker delegates to the NPC: they speak for 260 million migrant workers”, People’s Daily, March 12, 2013 viii Preface: Breaking the Existing Pattern of Rights and Privileges to Accelerate… as well as university graduates in the 1980s and the 1990s, typically lived in less comfortable dormitories and received low wages/salaries Nonetheless, they had access to basic security and rights With regard to the citizenization of rural migrants, they not need benefits available to the white-collar elite, nor they expect to live in luxurious houses While contributing their labor and wisdom to the host cities, they need basic housing, education, medical care, political rights, labor benefits and equal opportunities Since the citizenization of rural migrants clearly makes sense from the social, economic and legal perspectives, it should and can be implemented To this end, we need only to break through the existing pattern of interests and respect the citizenization-relevant rights of rural migrant workers Beijing, China Jiahua Pan Contents Overall Strategy for Promoting the Citizenization of Rural Migrant Workers Jiahua Pan Evaluating China’s Cities for Scientifically-Sound Development Jingjing Shan, Zhanyun Wu, and Ya’nan Geng 47 The Evolution of China’s Migrant Worker Policies for Since 1978 Shunjiang Huang 81 The Status of Migrants in Cities and Innovations in Social Management 101 Min Du Cost Estimation and Cost Sharing Mechanism for Citizenization of Rural Migrant Workers 129 Jingjing Shan Methods for the Citizenization of Migrant Workers in Megacities 149 Yanting Ni and Yingchang Song Approach to and Suggestions for Further Reform of the Hukou System 163 Liejun Wang Encouraging Farmers to Migrate with Asset 195 Xueyuan Chen Establishing a Unified Urban-Rural Fair Employment System 215 Meng Li and Qimin Peng ix 274 H Li and S Liang The NBS (2011) The migrant workers monitoring survey report 2011 The official website of the NBS Yao Jianping (2012) On the levels of the minimum living allowances in Chinese cities China Soft Sci (11) Zheng Gongcheng, Huangli Ruolian (2007) Rural-urban migrant workers in China: issue and social protection People’s Publishing House Hongyu Li is Director, the Urban Planning Research Office, the IUE, and Chairperson, the Urban Policy and Culture Research Center, who focuses on urban planning and sustainability Shangpeng Liang is a postgraduate student at the IUE who focuses on urban economics and researches urban and regional development Chapter 12 Strengthening Housing Security for Migrant Workers Xin Dong The population of migrant workers in China has been escalating rapidly in recent years By the end of 2012, the total number of Chinese migrant workers had reached 262.61 million, up 3.9 % from 2011 Specifically, there were 163.36 million nonlocal migrant workers, up 3.0 % year on year, and 99.25 million local ones, up 5.4 % year on year.1 In the period between 2009 and 2012, the total number of Chinese migrant workers increased on an annual average by 10.94 million, including 6.01 million non-local migrant workers and 4.93 million local ones.2 The problem of housing assistance has become a key issue for migrant workers, especially non-local ones With a summary of the current urban housing assistance system and local housing policies for migrant workers in China, this paper will analyze the current status and problems of housing assistance for migrant workers, and subsequently provide policy recommendations about it The NBS: the Statistical Bulletin of the People’s Republic of China on the 2012 National Economic and Social Development, February 22, 2013, http://www.stats.gov.cn/tjgb/ndtjgb/ qgndtjgb/t20130221_402874525.htm, March 29, 2013 The annual number of migrant workers includes migrant workers who work outside their hometowns for at least months in the year and those who work in non-agricultural sectors in their hometowns for at least months in the year (the same below) The NBS: the Migrant Workers Monitoring Survey Report 2011, April 27, 2012, http://www.stats gov.cn/tjfx/fxbg/t20120427_402801903.htm, March 29, 2013; the Statistical Bulletin of the People’s Republic of China on the 2012 National Economic and Social Development, February 22, 2013, http://www.stats.gov.cn/tjgb/ndtjgb/qgndtjgb/t20130221_402874525.htm, March 29, 2013; the annual average numbers were computed according to the aforementioned data X Dong (*) Institute for Urban and Environmental Studies (IUES), Beijing, China © Social Sciences Academic Press and Springer-Verlag Berlin Heidelberg 2015 J Pan, H Wei (eds.), Annual Report on Urban Development of China 2013, Current Chinese Economic Report Series, DOI 10.1007/978-3-662-46324-6_12 275 276 X Dong Current Status of Housing Assistance for Migrant Workers Theoretical Inclusion in the Urban Housing Assistance System, but Few Actually Receive Benefit Today in China, urban housing options consist of housing from developers, maximum price-controlled housing, affordable housing, low-rent housing, public rental housing, housing for evicted homeowners, older renovated housing, and co-funded housing Among them, maximum price-controlled housing, affordable housing, low-rent housing and public rental housing are all subsidized, only to differing extents Under China’s current urban housing assistance system, migrant workers have access to public rental housing With regard to who has access to public rental housing, Document [2011] No 45 issued by the General Office of the State Council provides that “public rental housing is for low- and middle-income urban households with poor housing conditions, new employees who have no housing and nonlocal workers who have steady jobs in towns or cities”.3 Since migrant workers are also non-local workers, those with steady jobs in towns or cities are already able to benefit from the urban housing assistance system In reality, however, only a small portion of migrant workers can be covered by this system, which currently plays a very limited role in improving their housing situation Subsidies for Developers, Not Applicants Housing assistance from the government can be seen as giving an access to housing which corresponds to market mechanisms Housing assistance comes essentially in the form of financial subsidies, primarily subsidies for developers and secondarily for those who demand or need housing When it comes to subsidies for suppliers, the government intervenes directly in housing supply and provides financial subsidies to those producing housing; as for subsidies for housing applicants, the government also provides financial subsidies Today in China, the majority of housing assistance is in the form of subsidies for suppliers, which are supplemented by subsidies for demanders Housing assistance for migrant workers also takes the form of subsidies for suppliers The government may transfer land to the suppliers at below-market prices or even for free, or it directly builds or buys affordable housing to increase the supply of such housing in the market As for subsidies for individuals, the government makes direct grants to low-income people The government also gives subsidies to providers of affordable housing such as public rental housing for migrant workers Support for public rental housing focuses on small apartments of about 40 m2 in gross floor area, and the levels of rent are determined by county or municipal The Guiding Opinions of the General Office of the State Council on Building and Managing Indemnificatory Housing, September 30, 2011, http://www.gov.cn/zwgk/2011-09/30/content_1960086.htm, March 29, 2013 12 Strengthening Housing Security for Migrant Workers 277 governments on the basis of factors such as the average rent in the market and the incomes of the low-income population Unfortunately, rent-regulated housing that comes with subsidies for housing applicants has yet to be made available to migrant workers.4 Housing allowances that migrant workers receive from the employer are considered as essentially part of their wages, if the employer receives no subsidies from the government In this case, the allowances received in wages should, of course, not be viewed as housing assistance from the government As a result, current housing assistance for migrant workers in towns or cities is mainly in the form of access to public rental housing which benefits only from supplier subsidies, whereas there are nearly no direct subsidies for migrant workers as demanders of housing Housing Assistance for Migrant Workers Is Mostly Shouldered by Local Governments, with the Central Government Playing a Minor Role Governments are responsible for providing housing assistance, which is seen as a form of income redistribution aimed at promoting social justice Such housing assistance covers public rental housing for migrant workers as part of China’s affordable housing program The Guiding Opinions of the General Office of the State Council on Building and Managing Indemnificatory Housing (GBF [2011] No 45) points out that one of the basic principles in building and managing affordable housing is that “the government should play a leading role, provide policy support and guide the private sector in participating in this process” It also proposes that “provincial governments should each take overall responsibility for affordable housing projects in their respective provinces; county and municipal governments should be responsible for project implementation, including preliminary work, funding, land supply, quality monitoring, affordable housing rental/sale management and regulation”, “the central government should continue increasing financial subsidies; local governments should prioritize affordable housing projects in their budgets and increase fiscal spending on such projects.”5 With regard to responsibility for financing the development of low-rent housing and public rental housing, the The policy is based on the Notice of the State Council on Printing and Issuing the 12th Five-Year Plan for the National Basic Public Service System (GF [2012] No 29) This document makes it clear that low-rent housing assistance is provided in kind or in cash, saying that “at least 4,000,000 low-rent apartments will be added, and at least 1,500,000 more households will receive rent subsidies” in the 12th Five-Year Plan period; “where low-rent housing assistance is provided in kind, the average floor area per capita will be about 13 m2, the gross floor area be less than 50 m2, and the rent be determined by county or municipal governments; where low-rent housing assistance is provided in cash, the levels of rent subsidy will be determined by county or municipal governments according to factors such as the levels of local economic development, the average rent in the market, and the incomes of relevant households.” The Guiding Opinions of the General Office of the State Council on Building and Managing Indemnificatory Housing, September 30, 2011, http://www.gov.cn/zwgk/2011-09/30/content_1960086.htm, March 29, 2013 278 X Dong 12th Five-Year Plan for the National Basic Public Service System makes it clear that “county and municipal governments should be responsible for making such payments, provincial governments should provide financial support, and the central government should grant subsidies.”6 There is statistical evidence that spending on housing assistance is mainly carried out by local governments, with the central government playing a minor fiscal role China Statistical Yearbooks show that: in 2010, national spending on affordable housing was 237.70 billion yuan, of which the central and local governments represented 16 % and 84 % respectively; in 2011, national spending on affordable housing was 382.10 billion yuan, of which the central and local governments represented % and 91 % respectively It is therefore clear that with this part of China’s urban housing assistance system, expenditure on support for migrant workers is mostly undertaken by local governments, with the central government playing a minor role Local Efforts in Providing Housing Assistance for Migrant Workers With regard to housing assistance for migrant workers, some local governments have made efforts in terms of policies and practices There are now five typical models of local housing assistance: the Chongqing Model, in which unsold or unfinished buildings are remodeled into apartment buildings for migrant workers; the Changsha Model, in which apartment buildings for migrant workers are constructed on collectively-owned rural land in suburbs; the Shanghai Model, in which apartment buildings for migrant workers are constructed in industrial parks; the Huzhou Model, in which a Housing Provident Fund (HPF) system that matches the characteristics of migrant workers is created; and the Beijing Model, in which migrant workers are given full access to the urban housing assistance system.7 The Chongqing Model: Unsold or Unfinished Buildings in the City Are Remodeled into Apartment Buildings for Migrant Workers Chongqing was one of the first Chinese cities that tried to solve the problem of housing for migrant workers; it began to have unsold or unfinished buildings remodeled into low-cost apartment buildings for migrant workers in 1997 The Chongqing Model is exemplified by the Bangbang and Sunlight Apartment Buildings The Notice of the State Council on Printing and Issuing the 12th Five-Year Plan for the National Basic Public Service System, July 20, 2012, http://www.gov.cn/zwgk/2012-07/20/content_2187242.htm, March 29, 2013 Dong Xin: “On China’s housing policies specific to migrant workers (1978–2012)”, Reform of Economic System 2013 Issue 12 Strengthening Housing Security for Migrant Workers 279 The Bangbang Apartment Building is at the Zhengyang Marketplace near the Nanping Pedestrian Street, the Nan’an District, Chongqing Floors 1–3 serve as a farmers’ market and Floors 4–9 consist of apartments for migrant workers The Zhengyang Marketplace was built in 1995 amid a real estate bust; a lot of rooms at this marketplace were left unused In 1997, these unused rooms were remodeled into the Bangbang apartments, and made available for low rents known as “One yuan per bed per day”, which attracted a large number of migrant workers from surrounding areas These rooms ranged from 10 to 20 m2 in floor space area After being remodeled and expanded once again, these apartments reached 11,000 m2 in total floor area by the end of 2005 All the 407 rooms were occupied, and more than 95 % of the over 1,700 tenants were farmers who worked in this city.8 Using the experience from the development of the Bangbang Apartment Building, the government of the Nan’an District built and employed a housing model characterized by government spending, management by the community, market-oriented operations and self-sufficiency from 2005 onward The district government spent over 2.50 million yuan renovating unused government-owned buildings (including factory/ library/hotel buildings) in accessible areas, where there were a lot of migrant workers, and these became seven Sunlight Apartment Buildings, with a total floor space area of 19,500 m2, which later housed over 4,000 migrant-worker tenants.9 The Changsha Model: Building Apartments on Collectively-Owned Land in Suburbs Changsha was also one of the first Chinese cities that took measures to resolve the problem of housing migrant workers Under the so-called Changsha Model, apartment buildings for migrant workers are constructed on collectively-owned rural land in suburbs Such buildings are exemplified by the Jiangnan Apartment Complex Finished in January 2005, the Jiangnan Apartment Complex was the first lowrent housing that the Changsha municipal government built specifically for migrant workers This apartment complex is near the Changsha West Bus Station and east of Ring Road Covering of land, the Jiangnan Apartment Complex comprises 13 multi-story residential buildings with a total floor area of 50,000 m2 that can house up to 3,000 migrant workers The total construction budget of 75.00 million yuan was shared by the local government and the private sector The rooms were mostly corporate dormitories, but there were also a few small apartments Single and bunk beds were available at only 70 and 50 yuan/person/month respectively Nonetheless, it turned out that these rentable rooms did not became popular with migrant workers In October 2005, the Changsha Municipal Property Administration developed Zhang Jiangtao: “On the housing issue of migrant workers”, a master’s degree thesis at the Xi’an University of Architecture and Technology, 2009 Guo Li and Li Yongwen: “Chongqing: building ‘one-yuan apartments’ for migrant workers”, Outlook Weekly 2007 Issue 28 280 X Dong new ways to reduce the applicant requirements for low-rent housing – migrant workers who had signed labor contracts were all allowed to apply for low-rent housing This authority also provided multiple rental options – migrant workers could rent a bed, a room or an apartment Nonetheless, only 26 of all 618 apartments were rented by migrant workers within nearly year after these new measures became effective The prime cause for this lay in the fact that the Jiangnan Apartment Complex was too far from the workplaces of most migrant workers; when these traveling costs were added to the living costs of migrant workers who lived in this apartment complex, the total seemed to be no lower than the living costs of those who lived near their workplaces.10 The Shanghai Model: Building Apartments in Industrial Parks Under the Shanghai Model, apartment buildings for migrant workers are constructed in industrial parks Specifically, centralized apartment-style corporate dormitory buildings are constructed in an area where there are more companies than elsewhere Such buildings are exemplified by the Yongsheng Migrant Worker Apartment Complex Built in 2005, the Yongsheng Migrant Worker Apartment Complex was the first ever migrant worker apartment complex in Shanghai Located beside the Yongsheng Road in Malu Town, Jiading District, Shanghai, the Yongsheng Migrant Worker Apartment Complex covers nearly of land and has a total floor area of 61,000 m2 It consists of ten apartment buildings, which each contain 132 rooms and, together, can house nearly 10,000 migrant workers This apartment complex was built on a piece of land in the Malu Town Industrial Park, which was earmarked by the local government for the park companies to provide migrant workers with centralized dormitory buildings After it was finished and put to use, the Yongsheng Migrant Worker Apartment Complex became a major local attraction for investors Private companies paid for all the buildings and facilities in this apartment complex and now receive rents as return; a government-backed property management company is responsible for daily operations, charges property management service fees as operating capital and, in case of fund shortage, can receive subsidies from the town government This apartment complex provides single rooms plus a small number of family rooms Each single room is 39 m2 in floor area and is rented at 70 yuan/person/month if it is occupied by eight tenants Most of the rent is paid by the employer of migrant workers, who pay the remaining small portion As of January 2011, this apartment complex had achieved an occupancy rate of 99 %.11 10 Zhang Jiangtao: “On the housing issue of migrant workers”, a master’s degree thesis at the Xi’an University of Architecture and Technology, 2009; Zhou Liyun: “Why are apartment buildings for migrant workers left out in the cold”, the People’s Daily, September 5, 2006, p 10 11 Zhang Jiangtao: “On the housing issue of migrant workers”, a master’s degree thesis at the Xi’an University of Architecture and Technology, 2009; the official website of the Jiading District 12 Strengthening Housing Security for Migrant Workers 281 The Huzhou Model: Customized Housing Provident Fund (HPF) System Under the Huzhou Model, migrant workers are covered by the HPF program and a special HPF system is made, taking into account the characteristics of these workers Given that migrant workers have low incomes and are highly mobile, the Huzhou municipal government created an HPF system that includes measures such as: migrant workers need only meet low requirements if they want to enroll in the HPF program; they can draw money from their HPF accounts when they quit and/or leave the city; they can also draw money from their HPF accounts to pay rent; favorable treatment is available when they purchase housing with a loan; households with financial difficulties will receive an allowance; migrant workers will also receive support even if they build houses in their rural hometowns In 2003, China’s first ever HPF system for migrant workers was created in Huzhou City, Zhejiang Province Later on, the Huzhou Municipal HPF Management Center made various adjustments to the HPF policy for migrant workers, such as relaxing requirements, including time-related ones, for drawing money from one’s HPF account, increasing the maximum amount of money that can be drawn, and simplifying moneywithdrawal procedures As of August 2012, 116,000 migrant workers had opened HPF accounts in Huzhou City.12 The Beijing Model: Qualifying Migrant Workers for the Urban Housing Assistance System The Beijing Model is characterized by the combination of resolving the problem of housing migrant workers with that of housing other migrants and native residents; migrant workers who meet specific requirements are now covered by the urban housing assistance system for the whole city This is also a solution that is most consistent with the current national policy for housing assistance In October 2011, the Beijing municipal government provided in the Notice on Enhancing the Construction and Management of Public Rental Housing in Beijing City (JZF [2011] No 61) that non-locals could also apply for public rental housing if they had worked continuously in Beijing for a specific minimum number of years, had full legal capacity, had a steady income, were able to provide evidence of temporary residence in the current period, and evidence of HPF payment or social Government: “The Yongsheng Apartment Complex in Malu Town is a warm home of migrant workers”, January 5, 2011, http://www.jiading.gov.cn/Item/28929.aspx, April 22, 2012 12 Zhang Xi: “Improve incentives to benefit various groups – the HPF system in this city keeps increasing coverage”,August 7, 2012, http://hzrb.hz66.com/hubaojizhe/zhangqian/2012-08-07/2535 html, March 22, 2013 282 X Dong insurance premium payment, and if neither the applicant nor any family member currently had any housing in the city Such non-local people could include migrant workers who met the specified requirements Nonetheless, the current policy has yet to produce any remarkable effect on the housing situation for migrant workers Main Problems At present, housing assistance available for migrant workers in towns or cities is provided at a low level, and plays a very limited role in improving their housing situation This has much to with existing problems regarding such support, mainly including: The Urban-Rural Dual Land and Housing Systems Prevent Migrant Workers from Receiving Equitable Housing Assistance in Towns or Cities During the period of planned economy, the housing assistance system was characterized by the distribution of housing as a benefit among urban residents, and by the recognition of curtilage rights of rural residents; this system was intended to ensure that everybody had housing to live in at a time when China was underdeveloped.13 Nowadays, housing distributed as a benefit to urban residents has become their private property, amid the reform of China’s urban housing system; in rural areas the recognition of curtilage remains a potential asset that cannot be realized under the collective ownership of land There is a significant link between housing assistance for migrant workers in towns or cities and their curtilage rights in the countryside; the fact that migrant workers may have houses in their rural hometowns leads to negative attitudes when it comes to their housing demands in host towns or cities.14 A typical rural-urban migrant worker situation is that the household may have a house in the rural hometown, on the one hand, but needs to buy housing in the receiving towns or cities, on the other Nonetheless, there is a certain conflict between the two sides; there may be empty houses in the rural hometowns but also a severe shortage of available housing in the receiving towns or cities This conflict originates in the formerly urban-rural dual land and housing systems It is unfair that migrant workers who have long lived in towns or cities may have no access to the same housing assistance as that for native urban residents; yet it is also unfair to native urban residents that migrant workers receive the same housing assistance as 13 Chen Huai: “Developing the housing assistance system is the key to alleviate housing problems”, Research on Economics and Management 2006 Issue 14 Dong Xin and Zhang Yi: “On the determinants of housing consumption by migrant workers”, Chinese Rural Economy 2012 Issue 10 12 Strengthening Housing Security for Migrant Workers 283 they themselves in towns or cities, because the urban residents have no rights to land or houses in the countryside It can therefore be argued that the old urban-rural dual land and housing systems are a hindrance to migrant workers receiving equitable housing assistance in towns or cities Housing Assistance to Migrant Workers and Overall Condition of the Urban Housing Assistance System The low level of housing assistance for migrant workers is largely caused by the overall status of the urban housing assistance system The current urban housing assistance system in China has only been in operation for a short period of time and is far from perfect By the end of 2006, 145 of all 657 Chinese cities had not established a low-rent housing system.15 Today, local governments still take a leading role in raising money for housing assistance This fact means that local governments face increasing financial pressures as the cost of housing assistance funding increases their fiscal outlay at the same time as land transfer revenues fall, thus creating a huge gap between spending and revenue Since the housing of native urban residents remains a problem and a top priority for local governments, it is impossible for them to provide migrant workers with sufficient housing assistance at the same time As a result, the level of housing assistance for migrant workers will necessarily depend on the overall status of the urban housing assistance system If the overall urban housing system is inadequate, policies regarding housing assistance for migrant workers will necessarily have to be more about applicant tests and restrictions and, thus, be of little help in solving the housing issue of these workers Unmet Housing Needs of Migrant Workers The Guiding Opinions of the General Office of the State Council on Building and Managing Indemnificatory Housing (GBF [2011] No 45) makes it clear that public rental housing should be made available to all people, including migrant workers, who have steady jobs in towns or cities; municipalities and provinces such as Beijing, Chongqing, Gansu, Hebei, Henan and Sichuan have also outlined specific policies in regard to migrant workers applying for public rental housing In other words, migrant workers who have steady jobs in towns or cities are to be included in the urban housing assistance system, whether from a national or local perspective Nonetheless, the supply of public rental housing does not meet migrant workers’ housing demand Regarding the size and rental charges of public rental housing, 15 The former Ministry of Construction: the Report of the Ministry of Construction on the Development of the Urban Low-rent Housing System in 2006, February 13, 2007, http://www mohurd.gov.cn/zxydt/200804/t20080424_162808.html, February 22, 2013 284 X Dong Document GBF [2011] No 45 provides that a single unit should generally be about 40 m2 in floor area and satisfy basic residential needs, and that the rent should be determined by county or municipal governments under the principle of being slightly lower than the average rent in the market.16 In fact, however, households of migrant workers often cannot afford even a slightly below-market price Rents in migrant worker-dominated areas such as quasi-cities are much lower than the average rent of ordinary housing in the market, and indirectly reflect the levels of housing expenses that such households can afford It can, therefore, be argued that the rent charged in public rental housing is higher than what migrant workers can afford, and that this demonstrates that public rental housing is not appropriate to these workers’ needs or circumstances Organizations Responsible for Providing Housing Assistance for Migrant Workers Have Yet to be Clearly Identified With regard to organizations responsible for providing housing assistance for migrant workers, the Guiding Opinions on Improving Housing Conditions of Migrant Workers (JZF [2007] No 276) provides that one of the basic principles in improving the housing conditions of migrant workers is “… policy support, and the employers of migrant workers should be responsible for improving their housing conditions”17; Document GBF [2011] No 45 points out that, regarding the affordable housing program that focuses on public rental housing provision, one of its basic principles is that “the government should play a leading role, provide policy support and guide the private sector in participating in this process.”18 In other words, migrant workers who have steady jobs in towns or cities have been included in the public rental housing system, and governments should play a leading role in providing them with housing assistance so as to improve their housing conditions On the other hand, the employers of migrant workers are also deemed responsible for improving their workers’ housing conditions This shared responsibility has not been clearly defined, so now it is imperative to establish whether it should be governments or companies who bear the main responsibility for housing assistance for migrant workers 16 The Guiding Opinions of the General Office of the State Council on Building and Managing Indemnificatory Housing, September 30, 2011, http://www.gov.cn/zwgk/2011-09/30/content_1960086.htm, March 29, 2013 17 The Notice of the Ministry of Construction, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Labor and Social Security and the Ministry of Land and Resources on Printing and Issuing the Guiding Opinions on Improving Housing Conditions of Migrant Workers, January 10, 2008, http://www.mohurd.gov.cn/zcfg/jsbwj_0/jsbwjfdcy/200801/ t20080110_157799.html, March 29, 2013 18 The Guiding Opinions of the General Office of the State Council on Building and Managing Indemnificatory Housing, September 30, 2011, http://www.gov.cn/zwgk/2011-09/30/content_1960086.htm, March 29, 2013 12 Strengthening Housing Security for Migrant Workers 285 Methods of Solving the Issue of Housing Migrant Workers Are Not Supported by Relevant Laws and Policies Housing policies in China are issued in the form of guiding opinions and notices of government departments, rather than enshrined in law In addition, housing assistance systems are not underpinned by transparent and reliable sources of money to fund them If a sudden severe shortage of money arises from an acceleration in the construction of affordable housing, then local governments can nothing but mobilize their resources through administrative orders, rather than establishing the legal status and funding of local affordable housing through institutional arrangements The resulting financial risks to the local government, and the lack of control over high rents sought by powerful investors, who may also be responsible for market squeezing and low-quality housing construction, should never be ignored.19 A review of housing policies specific to migrant workers in China shows that they are generally also issued in the forms of guiding opinions and notices, especially the policies issued by local governments in an attempt to solve the housing issue of migrant workers, some of which policies are even inconsistent with current laws or national policies Remodeling disused factory buildings, or public city facilities such as libraries, into apartment buildings for migrant workers, for example, will probably lead to changes in the use of state-owned land, yet the Land Administration Law of the People’s Republic of China states that “A construction unit that uses state-owned land shall so in agreement with the stipulations of the contract governing compensation for the use of land such as the assignment of the land-use right or with the provisions in the documents of approval for allocation of the land-use right.” Policy Recommendations The Long-Term Strategy Promote Reform of the Land and Housing Systems, and Create a Single Urban and Rural Housing Assistance System To address both the housing difficulties of migrant workers in host towns or cities, and their curtilage rights and empty houses in the countryside, relevant authorities should make the creation of a single urban and rural housing assistance system a long-term policy objective; advancing reform of the land and housing systems under an overall plan that includes both urban and rural areas is a prerequisite for the creation of such a single system The key is to promote institutional reforms regarding rural land, including accelerating the creation of a free trade market for curtilage rights and rural houses For households of migrant workers that want to settle down 19 Mao Lingyun: “Financial challenges for affordable housing”, Nanfengchuang 2011 Issue 17 286 X Dong in towns or cities, this will provide them with the possibility of realizing their idle rural assets, thereby making them better able to pay housing expenses in the host towns or cities After realizing their rural assets, households of migrant workers that can afford urban housing may acquire it through the commercial housing market, and the others will receive the same housing assistance as that for native urban residents Once a free trade market for rural land is created, households of migrant workers can assess their rural assets according to market value and include them in their total assets, even if they are unwilling to realize them; they will receive the same housing assistance as that for native urban residents if they meet requirements for inclusion in the single urban and rural housing assistance system Since the land system reform will take a considerable time, however, creating a single urban and rural housing assistance system will necessarily be a long-term strategic policy objective Improve Housing Assistance Laws/Regulations and the Overall Housing Assistance System The level of housing assistance for migrant workers depends on the overall status of the urban housing assistance system, yet satisfactory legal support is unavailable to boost the status of this system Internationally, the development of a comprehensive legal system governing housing assistance is seen as a fundamental step in the resolution of housing issues In Japan, for example, such laws as the Public Housing Law, the Housing Public Corporation Law, and the Residential Basic Living Law clearly define housing construction objectives, sources of funding as well as other related housing policies and measures In China, current efforts in solving the problem of housing migrant workers are not well supported by laws or official policies, and may even be inconsistent with the latter This situation can be resolved by making new or amending existing laws and regulations which are specifically related to housing assistance; this would be a vital contribution to the improvement of China’s housing assistance system as a whole and for assisting in current efforts to house migrant workers It is advisable to consider the improvement of relevant laws/regulations in the field of housing assistance as a long-term strategy to enhance the overall housing assistance system, since it will be a time-consuming process Short-Term Policies and Measures Use of Special Subsidies Advancing the reform of the land and housing systems and creating a single urban and rural housing assistance system will be time-consuming processes, but improving the actual housing conditions of migrant workers is an urgent issue The extent to which housing assistance is available for migrant workers in host cities and towns 12 Strengthening Housing Security for Migrant Workers 287 depends on the overall status of the urban housing assistance system; however, the living conditions in rented housing for migrant workers in general could be directly improved with special subsidies Specific measures involving the use of such subsidies might include the following actions: government departments could invite companies to bid for improving the infrastructures of old buildings such as the water supply/drainage systems and electricity/gas supply systems; replacing equipment in old buildings, such as unsafe gas water heaters; constructing dormitory buildings that are to be rented to migrant workers, or constructing low-cost governmentowned affordable housing which could replace rented housing in poor condition in s or slums Increase Subsidies Available to Migrant Workers The basic housing problem for migrant workers is essentially their ability to pay housing costs Making migrant workers better able to meet housing expenses is a major step towards solving their housing problems and in increasing the effectiveness of housing assistance policies Selecting the right methods of housing assistance should depend on the characteristics of migrant workers themselves Under the current urban housing assistance system, public rental housing supplied to migrant workers does not meet their housing needs It is therefore suggested that government departments may increase the supply of low-rent housing by constructing or purchasing affordable housing Alternatively, it would be more effective to increase the provision of housing subsidies to migrant workers seeking housing assistance Relevant authorities could provide tenants with subsidies in cash or rental coupons, intended to increase their ability to pay housing expenses; direct tenant subsidies in fact better suit the high mobility of migrant workers and are of more practical use to them than subsidies given to developers At the moment, however, housing assistance for migrant workers in China mostly takes the form of subsidies to suppliers or constructors of housing, such as apartment buildings and public rental housing for these workers Consequently, it is recommended that direct subsidies to demanders of housing be significantly increased, so as to make these migrant worker households better able to pay housing costs themselves Create Reliable Sources of Funding for Organizations Providing Housing Assistance Rented private housing has overtaken corporate dormitory buildings as the primary source of housing for migrant workers; their employers are tending to play a decreasing role in the provision of housing for them Since governments are responsible for running the urban housing assistance system in China, it is they, not company employers, that should be responsible for providing housing assistance for migrant workers Where government subsidies are unavailable, free or low-cost housing that employers provide for their migrant workers is essentially wages in 288 X Dong kind, converted from a part of the wages in cash payable to these workers It is therefore absolutely essential to clearly designate the governments’ role as being the primary organizations responsible for providing housing assistance for migrant workers; associated government departments could also encourage the private sector, including employers, to provide migrant workers with rented housing by offering land or tax-related incentives In addition, the division of responsibility between the central and local governments should be adjusted to correspond to the internationally accepted practice that housing assistance is mostly funded by the central government The central government should increase its budget for housing assistance, thereby establishing a reliable source of funding for migrant worker housing assistance Xin Dong is a Ph.D in economics and associate researcher at the IUE who focuses on real estate economics ... Ministry of Environment Protection Vice president of Chinese Association for Urban Economy, vice president of the Chinese Society of Ecological Economists, vice president of Chinese Energy Association... Committee on Regional Planning and Urban Economy of the Urban Planning Society of China (UPSC), and the Natural Resources Economy and Planning Committee of the Chinese Society of Economics of Geology... Executive director of China Society of Urban Economy; Member of the Academic Committee of Regional Planning and Urban Economy of UPSC; Member of the expert committee of the Association for Promoting