Hangzhou latest Chinese city to pledge land for affordable rental homes

China’s eastern city of Hangzhou, known for its high cost of living, has pledged to allocate at least 10% of new residential land for affordable rental housing each year, joining Guangzhou and Shenzhen to meet rising demand as their populations grow.

China has stepped up efforts to address housing issues faced by young people particularly amid soaring home prices in large cities, under President Xi Jinping’s banner of “common prosperity.”

Large cities with net inflows of population are to provide more land for rental housing in 2021-2025, according to China’s State Council, or cabinet, in July.

Hangzhou, the capital of the wealthy province of Zhejiang, said it will provide 330,000 units of affordable rental homes in 2021-2025, according to a plan published on the website of the local government on Tuesday.

Home prices last year in Hangzhou, a city of around 12 million people, averaged around 27,000 yuan ($4,221) per square metre, nearly double the nationwide average of 14,000 yuan, according to China’s Statistical Bureau.

Last week, China’s most populous province Guangdong said its two biggest metropolises Guangzhou and Shenzhen must allocate at least 10% of their land for rental housing, among the first Chinese cities to do so.

Last month, the top decision-making body of the Chinese parliament said it will roll out a pilot real estate tax in some regions, partly to rein in surging home prices.

Xi’s pledge to narrow social disparities to achieve “common prosperity” has put the plight of low-income households and individuals at the forefront of Beijing’s policymaking.

($1 = 6.3960 Chinese yuan renminbi)