Checking the chinese press: Beijing rent controls

Since the Beijing Goverment introduced measures this February to prevent houses purchases by waidiren (non-beijingers, in the case of these regulations, non-beijingers who’ve been in the city less than five years), as well as multiple purchases by Beijing residents, rental prices have (unsurprisingly) seen some dramatic increases. One of my friends is searching for a new place after her landlord suddenly announced a rent increase of 300 RMB (from 1200RMB, for a single bedroom apartment near the third ring) starting this week. Obviously, this is annoying a lot of people. So what’s the Govt doing about it?

Last week the Chinese press reported on several new rent-control measures currently being researched, the main suggestion being to build more public housing. But another of the measures being researched concerns the ‘organization’ (组织化)of real-estate agent companies (房地产中介). According to the head of one of the largest real-estate agencies, (the omnipresent Wo Ai Wo Jia chain) this will mean:

encouraging or forcing smaller realty agencies to join larger firms through franchises so that the authorities can slash the number of smaller firms that they feel tend to create market chaos. (translated in the wantchinatimes)

On the face of it, it looks like bad news for small real estate agencies. So today I checked in with my old real estate agent, Mr. Song of  Runcheng real estate (near Pinganli subway station). Song is a waidiren himself, originally from Shanxi province, who got into the real estate business after a stint in the army (and still sports an immaculate crew cut). He describes his firm as ‘small’ and ‘independent’, its a lone operation not affiliated with any of the larger real estate agencies, so looks like the kind of agency ripe for reorganization. So I was surprised when he appeared not to have heard about the new policies at all. However, his colleague had heard about them, and eventually Song gave me his view on the measures.

‘I’m not at all worried’ he said, claiming that in his view, the so called ‘re-organization’ of small firms would likely be limited to information sharing, so that the government could more easily monitor house prices. ‘The policy is still in a research phase, and I don’t expect anything to happen for a while’.

Despite a lack of contact from government information on any reorganization policies, Song had an encounter with some government price inspectors recently. A couple, male and female, came to view one of his properties ‘I knew there was something weird about them, they were only interested in why the price was so high, and asking if it was the landlord who wanted the price at that level’. Later, he said, they’d showed him their identification as members of the a government inspection team.

I asked Song if how much power he had to decide prices. ‘That’s absolutely decided by landlords’, he replied. According to Song, the only way the landlords can be influenced to lower rents is through local residents committees, (居民委员会). How exactly the residents committees can exert pressure on landlords I’d like to learn more about. But for the moment, Song is not too worried about his small concern being bought into line by the Beijing government.

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