China vows to accelerate new affordable housing model

China’s ruling Communist Party pledged to accelerate a new housing model that emphasizes renting and ramps up affordable homes, following a record property slump, according to Bloomberg.

The party’s Central Committee said the new model will promote both renting and buying, in line with its call made since 2017, according to a resolution published by the official Xinhua News Agency on Sunday. China will also build and supply more affordable residences to meet the needs of working-class people, the top leadership said after a key meeting in Beijing.

The twice-a-decade event -- known as the Third Plenum -- is one of the most important in China’s political calendar, often setting the course for economic policy in the long term. At this year’s gathering, President Xi Jinping unveiled sweeping plans to bolster the finances of indebted local governments.

China has long sought to transform the housing market for younger, first-time homebuyers who have been pushed out by spiraling home prices. In 2017, President Xi Jinping delivered his now-famous mantra that “houses are built to be inhabited, not for speculation,” which aimed to tame runaway property prices and push a housing model that emphasizes renting.

In recent years, progress was slowed by the property downturn, towering local government debt and economic woes brought on by the Covid pandemic. The housing bust has led to massive oversupply, leaving the country with the equivalent of 60 million unsold apartments that will take more than four years to sell without government aid, according to Bloomberg Economics.

The meeting also signaled more loosening measures to be made at the local level. China will support various needs to upgrade housing and will give cities full power to set policies based on local conditions, according to the resolution. It will also make it easier for some cities to remove or ease restrictions on the number of properties an individual or household may own.