context: Commentators argue that interdependence of the real estate market and local governments' land finance revenue is leading to high housing prices. They assert causality based on the fact that the state is the only land supplier. Breaking the land monopoly may impact the real estate market.
Ministry of Land and Resources (MLR) is expanding land supply for housing by allowing rental housing to be built on rural collective land and exploring marketisation with the newly proposed ‘three rights’ system. Until now, the only land supply in the housing market has been urban land, which is owned by the state; rural land, owned by rural collectives—including both the 'construction' and 'homestead' classifications—has been restricted to rural use.
Under the current system, rural collectives own rural land and residents under those collectives are granted contractual rights to use it. The ‘three rights’ system aims to expand this: 'three' refers to rural collective ownership, contract rights and use rights. Jiang Daming 姜大民 MLR minister says MLR is researching land legislation and proposing policies for the ‘three rights’. Rural land will supply more non-state owned land to the real estate market, which will decrease housing prices, said Zhao Xiuchi 赵秀池 Capital University of Economics and Business professor.
Since the 19th Party Congress, government has made a point of encouraging long-term rentals and the professional rental market, but rental land supply—state-owned urban land—is extremely tight. MLR released ‘Pilot plan on using rural collective lands to build rental housing’ in 2017 and set 13 pilot cities including Beijing, Shanghai, Nanjing, Hangzhou, Guangzhou etc. Beijing supplied 203.9 hectares in 2017, with a promise to set aside 1000 hectares from 2017-2021.