Low-priced housing was once seen as a boon for China's low-income earners. But now the policy risks going awry.

Recent media reports show that nearly 80 per cent of the houses in Beijing's two major economy-housing areas - Huilongguan and Tiantongyuan - are listed for rent or sale. This means the owners were buying houses for an investment, not to live in.

The media has revealed that many of the houses are over 150 square metres, with some over 200 square metres. This has made people wonder whether they are economy or luxury homes.

In economy-housing compounds, reporters also found a large number of cars, including luxury ones. Such cars do not match the low-income-earner status of the house owners.

Meanwhile, thousands of people are queuing up to secure one of these homes. Supply is falling far short of demand.

Obviously, a number of low-income people are deprived of what they deserve to get, because some economy houses have been sold to rich people, or to those who are supposed to be excluded from such low-priced property.

The launch of economy housing starting from the 1990s was aimed to help low-income earners who could not afford commercial housing - prices have been rapidly rising in recent years. To encourage the building of inexpensive homes, the State has transferred land to developers at a price much lower than the market level. State banks have provided preferential loans for developers and the government has subsidized the infrastructure built around economy-housing compounds. In a word, public money is helping to subsidize these homes.

They were designed for families whose annual income is under a cap set by the government. In Beijing, the household income cap is 60,000 yuan (US$7,230) per year.

Admittedly, given its low price, economy housing has helped to stabilize property prices in major cities.

But the serious problems exposed in the sale of economy-housing have shaken public confidence in both the policy and the government.

Like many policies, the programme is well-meant but is tarnished by loopholes in implementation.

Relevant government departments are responsible for the loopholes.

Although the government is responsible for upholding fairness in a market economy, economic regulation is always a thorny task for a government. This is the case all over the world.

This, however, should not exempt relevant government departments from their responsibility in the current situation.

Beijing construction authorities attributed the chaos to "historical reasons" and said they began to strengthen checks on candidates for cheap housing from 2001.

They promised to take measures to retrieve cash from economy-housing owners who should not own such properties.

Shifting blame to the past, in the first place, is not a serious way of dealing with public affairs.

More seriously, four years have passed since the municipal authorities first acted on the problem. So why have they not done more to redress the problem, just making promises to try to pacify the public uproar?

The problems that have come with the economy-housing policy are not new. They have resurfaced and gotten worse over the years, having no effective curbs from the government.

Low-income earners cannot afford for these problems to continue like this while the wealthier take advantage of something they have no right to benefit from.

(China Daily June 23, 2005)