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www.hg211110.com Shen Xiaodong: Direct intervention in rents is more in line with market laws_

Shen Xiaodong: Direct intervention in rents is more in line with market laws_

Source: Time: 2020-01-28 19:17:01

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Shen Xiaodong: Direct intervention in rents is more in line with market rules
2011-03-10 19:32:51 Source: Xinmin.com followed 33 mobile phones to watch the news. Renting a house to solve the problem of "everyone has a house" is the last line of defense for social security citizens' right to live. In the era of financial marketization, the establishment of a social firewall to prevent real estate speculators from plundering the limited income of low- and middle-income classes can ensure a fair and healthy operation of society.
Author: SHEN Xiao Dong
Recently, Shen Jianzhong, director of the Real Estate Market Supervision Department of the Ministry of Housing and Urban-Rural Development, stated clearly at the press conference of the Fourth Session of the 11th National People's Congress that the Ministry of Housing and Urban-Rural Development will take rent regulation as a part of housing price regulation.
In this regard, many media quickly expressed concerns, Jinghua Times commented that the regulation of rents should follow market rules. It is believed that the market can find a reasonable price, but the administration can hardly find a reasonable price. Excessive interference may lead to the mutual damage of the renting and renting parties, and may also result in a dual operating system of nominal and actual prices, and stimulate the rise of yin and yang contracts and renting under impersonation.
The Beijing News also published an editorial stating that rent regulation is not a direct intervention in rents. The most important thing in regulating rents is not to prohibit landlords and intermediaries from increasing prices by administrative orders, but to reduce the bargaining power of lessors by increasing the supply of public rental housing. It is believed that as long as there is sufficient market competition, the price of rent will naturally reflect the supply and demand in the market. Local governments and functional departments do not need to impose so-called price limits on rents. Even if there is such regulation, it is often futile. The real market rent price will not succumb to administrative will.
The classic price theory holds that in a perfectly competitive market, in the short term, commodity prices are determined by the equilibrium point between supply and demand. Therefore, if the market rental housing can be fully supplied and fully competitive, theoretically, the market price of rental housing can be effectively reduced without direct government intervention.
But unfortunately China's rental market does not operate in such a perfect theoretical environment. On the one hand, the imbalance in economic development in various places has led the population to continue to gather in first-tier cities such as Beijing, Shanghai, Guangzhou, and Guangzhou, and in the short term, strong demand for housing has been accumulated in individual cities. On the other hand, the long-term high prices in the housing market have made the yield of tanned land far greater than that of building construction, and the supply of new houses has been shrinking, which has affected the supply of new rental houses. The rental market is rapidly slipping into sellers' markets where supply is less than demand.
China ’s CPI statistics released in January by the National Bureau of Statistics show that housing prices rose by 6.8% year-on-year, much higher than the prices of other goods (services) such as tobacco, alcohol and clothing, especially housing rental prices rose by 7.1%.
In addition, because government departments do not provide authoritative vacant house price information. As a result, more intermediaries with market information have taken the opportunity to raise prices, which is further sliding the rental market to the abyss of price distortion.
So, can the rental market automatically resume supply through price increases and reach a new equilibrium point?
Unfortunately, the rise in rental prices has another price effect: house prices are expected to rise.
The rental and sales ratios in Beijing and Shanghai are higher than those in Hong Kong and Tokyo for a long time, but there is still continuous momentum. In addition to irrational investment, an important reason is that house price expectations are not determined by the current rental-sales ratio, but by future rental-sales ratios. Than decided. As long as economic prosperity leads to expectations of high future rents, house prices in these cities are expected to have high imagination. The rapid rise in rents in the short term will reinforce such expectations. The expected rise in house prices will make it difficult to reduce land prices, and the impulse to hoard land will continue to be greater than the impulse to build houses.
Therefore, if this price phantom cannot be effectively broken, it will not only be difficult for the rental market to return to a state of balanced supply and demand and complete market competition. It may further worsen the relationship between supply and demand.
So, is it possible to achieve such a balance simply by increasing the supply of public rental housing by the government?
Judging from the current situation, it is also not optimistic. Of the 1.3 trillion yuan of affordable housing investment announced by the Ministry of Housing and Construction this year, only the 200 billion yuan of national debt issued by the central government on behalf of local governments has been stipulated to give priority to local public rental housing construction. At most it will not exceed 16% of all investments, and all social housing can cover only 20% of housing demand during the 12th Five-Year Plan period. According to this ratio, public rental housing can cover 3% of housing demand after 5 years. At present, the housing ownership rate in Shanghai has dropped to 70%, and it may decrease further in the future. Based on this calculation, it is difficult for public rental housing to cover 10% of the city's rental market. Even if the government has increased public rental investment to five times the current investment, 50% of renters must go to the rental market to find housing. If the intermediary is allowed to raise housing prices, the rental market will only embezzle the labor income of more low- and middle-income earners.
Of course, in specific implementation, direct intervention in rents may encounter situations such as yin and yang contracts, renting under impersonation, and even local governments may not strictly enforce this policy due to land sales needs. However, what is needed is to improve the legal status of rent price control in the operation link, implement the responsibility of law enforcement by specialized agencies, and strengthen the cost of illegal and illegal activities. And it must not be indulging that house prices continue to skyrocket.
For example, in the "Rental Law" in Germany, all large and medium-sized cities are required to formulate an "rental price table" that is updated annually, and based on the "rental price table" to formulate a "reasonable price", and rents exceeding 20% of the latter will be considered as " Illegal acts such as “high rent” will be punished with huge fines, and more than 50% will be directly regarded as “rapid rent” crimes and punished with criminal penalties.
Resolving "everyone has a house" by renting a house is the last line of defense for social security citizens' right to live. Therefore, soberly understand the laws of the market and establish a social firewall as soon as possible in the era of financial marketization to prevent real estate speculators from plundering the limited income of low- and middle-income classes. Only by hand can we guarantee at least a fair and healthy operation of society.
(Source of this article: Xinmin.com)

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