Shanghai to increase affordable rental property volume citywide
More than 40 percent of the city's new housing supply during the 14th Five-Year period (2021-2025) will be rental units as Shanghai continues to accelerate the development of its leasing market, senior government officials told a municipal press conference held on Tuesday.
During the five years through 2025, some 470,000 rental housing units, both newly built and remodeled, have been planned by the local government, with the first two years taking more than half, or 240,000 units, according to the city's latest implementation plan for rental housing development.
"Whether we can address the accommodation needs of newcomers and young residents well is of critical importance to Shanghai's vitality and its future development," said Tang Zhiping, vice mayor of Shanghai. "By the end of 2025, a total of 400,000 rental housing units will be available on the local market which should be able to meet the needs of the majority of the young and new residents in the city."
According to the implementation plan, scheduled to be officially released soon, anyone who is legally employed in Shanghai and with a per capita housing area of less than 15 square meters is qualified for application, regardless of his/her income level or if he/she has a Shanghai hukou (permanent residence permit) or not.
Leasing contracts, in principle, must have a minimum of one year and a maximum of three, with multiple-year contracts encouraged. Except for public rental housing units, whose lease periods have been capped at six years, leasing contracts can always be renewed as long as applicants remain qualified.
In terms of rent cost, the rental housing units planned by the city government should be at least 10 percent cheaper than those market-based rental apartments in neighboring locations and of similar quality, and the annual cap for rent increase has been set at 5 percent.
Meanwhile, children of tenants of such rental housing units who are at the stage of compulsory education will be entitled to enrollment in nearby schools, one of the local initiatives to support rental housing market development.
Under the government plan, most of the new rental units, the majority of which are no larger than 70 square meters, will be built in proximity to Metro stations (within 600 meters), and in the five "new cities" of Jiading, Songjiang, Fengxian, Qingpu and Nanhui.
Shanghai has been increasing its pace of establishing a housing system that ensures supply from multiple sources, provides housing support through multiple channels, and encourages both house purchases and rentals.
To boost the development of the rental market, the city has sold about 150 land parcels designated for residential leasing purposes, with gross floor space totaling 10 million square meters, to real estate developers since the 13th Five-Year period (2016-2020), ranking itself first among its domestic counterpart cities in terms of new construction volume.