Exploring the "Orderly Transition" of Rental and Sales-Type Affordable Housing: What Signals Does It Release?

Beijing News (Reporter Cao Jingrui) announced on March 13 the release of the “Outline of the 15th Five-Year Plan for National Economic and Social Development of the People’s Republic of China.” Regarding “promoting high-quality development of real estate,” the outline clearly states the main work directions for the “Fifteen-Five” period, including the need to “explore the orderly conversion and coordinated use of rental and sale-type affordable housing resources.”

Yan Yuejin, Deputy Director of the Shanghai E-House Research Institute, said this wording is relatively rare in previous plans. Under traditional models, affordable housing projects are designated for either rent or sale from the outset, but market demand is dynamic—when rental demand in certain areas is saturated and sale demand is strong, housing resources become difficult to allocate flexibly. The proposed “orderly conversion” signifies a shift from static housing management to a dynamic demand response mechanism, which is a concrete embodiment and innovation point of the “rent and buy” approach in the affordable housing sector.

“This essentially promotes a ‘rent first, buy later’ model, allowing eligible tenants to purchase their rental housing as property after a certain rental period,” Yan explained. Such policies have been implemented in areas like Huangshi City, Hubei Province, for example, allowing public rental housing to be converted into shared ownership housing. “For tenants, this policy meets their consumer demand to ‘rent and then buy,’ providing more flexible housing solutions; for the government, allowing public rental housing to be converted into property helps quickly recoup funds, facilitate capital circulation, and better support the construction and funding of new affordable housing projects.”

Looking ahead to the next five years of real estate market development, the “Fifteen-Five” plan proposes to “accelerate the development of new models for real estate development.” The government work report this year also explicitly states the need to “deeply promote the institutional and supporting policy construction of new real estate development models.” Yan believes this indicates an important signal—building new models has moved beyond the top-level design stage of setting directions and has entered the “deep water zone” of institutional implementation.

He stated, “Improving a housing system with multiple subject supply, multi-channel guarantees, and a combination of rent and purchase” is not a new concept, but the particularity of the “Fifteen-Five” period is that the rental market has shifted from unregulated growth to standardized development, with significantly enhanced institutional supply precision. The “rent and buy” approach is a fundamental housing system that must be firmly grasped during this period.

Yan emphasized that “achieving a higher level of housing security” is the ultimate goal of this plan. Unlike the “13th Five-Year” and “14th Five-Year” plans, which focused on solving housing difficulties, the “higher level” in the “Fifteen-Five” plan has two meanings: first, expanding coverage to include new citizens, young people, and wage earners; second, upgrading quality—moving from merely meeting basic housing needs to “living in comfort” and “living in quality.”