The housing allowance scheme in Guangzhou

Promotion of home purchase has been one of the major housing policies in China since 1979 and Guangzhou is one of the pioneers in formulating and establishing new housing policies. In 1997, the Guangzhou government announced an innovative housing initiative: the “Housing Allowance Scheme” (HAS). This scheme attempts to eliminate completely the welfare in-kind housing system by ceasing direct housing allocation. Civil servants appointed after 30 September 1997 would no longer receive housing from the State. Instead they were provided monthly housing allowances in cash. This paper is the outcome of a research project, funded by University Grant, to examine the feasibility of this new “Home Allowance Scheme” in achieving its objective of “Home Purchase” in Guangzhou. It first reviews welfare housing reform in the reformist city and examines the “Housing Allowance Scheme” against its objective of “Home Purchase”. More importantly, it highlights the inherent problems facing the government: such as lack of finance in both housing production and consumption. Finally, the concluding section gives suggestions for accomplishing the objective of “Home Purchase”.