Affordable Housing And Commercial Housing Investment Relations In Our Country

"Housing project for low-income urban residents" was first proposed in1994. It aims at speeding up housing construction, increasing effective supply, and promoting the reform of housing system. In July the same year, the State Council Decision on Deepening the Urban Housing System Reform established the goal of housing reform in China and pointed out to set up the housing supply system mainly focusing on economical affordable housing aiming at low-middle-income families. The economical affordable housing is an important part of our country’s public housing security system, which was established early and caused constantly controversy. As early as during the two Conferences in2009, Wang Chaobin, Kim Jong-new, Cai Jiming proposed "Cessation of the construction of economical affordable housing but to develop low-rent housing system" proposal, which caused a great controversy. There’s much concern on whether the large-scale investment of affordable housing can bring its expected effect on housing market.This paper studied on the relationship between the economical affordable housing investment and private housing investment from the perspective of housing supply by using the co-integration formula directly. With the panel data of1999-2010years, the29provinces and cities, it implemented Johansen co-integration test on the core variables and established of a panel vector error correction model (Panel VEC). After testing according to the administrative regions, the levels of development of the housing market respectively and housing purchasing power and housing supply structure, it tried to find whether there is "crowding-out" or "fill-in" effect between economical affordable housing and private housing investments.The empirical results showed that the economical affordable housing investment in the system is with weakly exogenous and Granger caused the change of private housing investment in the fixed effects case. The country’s economical affordable housing investment is statistically significant to extrusion of pure commercial housing investment, and economical affordable housing investment increased by1%will result in a decrease of0.28%pure commodity housing investment. But not all the different regions exist crowding-out effects, on the opposite, in some areas the private housing investment is increasing with the other one. It can be said that the increase in affordable housing investment has not fully met the need of increasing housing supply in different regions due to different levels of economic development, they should take the policy more carefully adapting to local conditions respectively.