Sources from the Beijing Construction Committee said the municipal government will speed up old house renovation projects, develop more affordable housing and offer more low-priced rental houses for low-income Beijingers over the next three years.

Committee Deputy Director Gao Delong said before 2005, all old house renovation projects are expected to be completed in the city's eight districts, which involves more than 3 million square meters of living space and 34,000 families.

"From last year, we officially launched the old house renovation projects in accordance with the general scheme designed by an experts group and approved by the municipal government," Gao told China Daily.

This year, the focus has been on Xuanwu, Xicheng, Dongcheng and Chaoyang, all downtown districts in the city.

"Besides fiscal investment, the majority of the capital needed is raised in line with market principles," Gao said.

In addition to old house renovations, the municipal government has been highlighting its affordable housing development project.

Official statistics show the vacancy rate of economic housing has reached 20 per cent in the capital, which is double the international security index for the real estate market.

Experts attribute it to the high price of real estate and the high proportion of higher-grade housing in Beijing.

"To achieve the goal of an all-around well-off society, the core issue is to increase the living conditions of the low-income residents," Gao said.

In 1998 and 1999, the area of affordable housing in Beijing surpassed 6.4 million square meters, which is expected to grow by another 2 million square meters this year.

"So far, 30 affordable housing projects have been finished or are under construction in Beijing," Gao said.

"The promotion of affordable housing may offer huge opportunities to domestic and foreign investors."

The city will continue to offer low-priced rentals to residents living in difficulty.

"The low-priced rental house program was launched last year, which has improved the living conditions of 2,269 Beijingers in 669 families, for their living area per capita increased from 2.3 square meters to 10.9 square meters," Gao said.

Gao emphasized that Beijing's new real estate focus might leave a large market space for home and overseas developers since the government has decided to further expand the fund-raising channels for the projects instead of solely depending on fiscal investment.

(China Daily November 27, 2002)