Citizenization of migrant workers and resolution of real estate inventory

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Since 2009, the upsurge of the real estate market has led to the start of housing construction and a sharp rise in construction area, resulting in a phased and structural surplus of supply in some places. The long-term backlog of inventory is bound to threaten the health, safety and development of economy, finance and society. Therefore, destocking is an important housing policy goal at present. However, if we try to use macroeconomic stimulus policies to expand the existing rigid demand and improvement demand in cities and towns, it is difficult to effectively resolve such a huge excess inventory in the short term. Opening up new demand, that is, speeding up the citizenization of migrant workers and supporting migrant workers in buying houses, is an effective way to quickly digest excess inventory and promote the steady adjustment and development of the housing market. Moreover, the purchase of houses by migrant workers and their citizenization are also of great significance to building a moderately prosperous society in an all-round way and realizing the great rejuvenation of the Chinese nation, Chinese Dream.

To some extent, "Chinese Dream" can be understood as China's successful transformation from a traditional rural society to a modern society. it is the "dream of family and country" woven by every Chinese at the same time, family prosperity and national prosperity, and national rejuvenation. The main problem of China's transformation and development is the problem of farmers. One of the inherent requirements of realizing the transformation is to make migrant workers become citizens, make the country an advanced and modern country, and realize the prosperity and rejuvenation of the country. Farmers are one of the main forces in China's transformation, and their unremitting struggle will change the fate of themselves and their families, and promote the prosperity and rejuvenation of the country.

Migrant workers are the main force of China's transformation. However, individual migrant workers and their families are also faced with the dilemma of lack of housing. Many outstanding problems facing the current economy are related to the problem of migrant workers: the lack of demand for economic growth comes from the demand gap caused by semi-urbanization, and the reform of household registration system, fiscal and taxation system, land system and financial system, it is closely related to the housing purchase of migrant workers and their citizenization. Therefore, the citizenization of migrant workers has the effect of killing many birds with one stone. First of all, migrant workers are an important force to remove inventory in the property market, and migrant workers' citizenization helps to resolve real estate inventory; secondly, migrant workers' citizenization drives investment and consumption to stabilize growth and promote transformation; thirdly, encouraging migrant workers to buy houses will force reform; finally, farmers' housing purchase fulfills the housing dream of migrant workers, and it is also the due meaning of a well-off society in an all-round way. It can even be said that 70 million people out of poverty and the citizenization of migrant workers is the last project of China's dream building of a well-off society. To encourage migrant workers to buy houses, in addition to giving full play to the multiple effects of housing purchases by migrant workers, it is also based on the existing stock, excess inventory and potential new supply of housing. The potential effective demand of urban residents is difficult to digest and match the existing housing stock, excess inventory and potential new supply scale.

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The demand for urban housing ultimately depends on the total amount of urban population and its changing trend, and there is still much room for growth in China's housing demand in the future. According to statistics, in 2014, China's urban resident population reached 770 million, of which the stock of registered residents is close to 500 million, and the non-registered permanent population is 270 million.

First of all, in view of the uneven housing ownership and incomplete housing facilities, there are still about 100 million low-income families with housing difficulties among the registered urban population during the 13th five-year Plan period. need to obtain about 38 million (estimated 3 billion square meters) of housing security, including: shantytown transformation, public low-rent housing and so on. Even if part of the physical security is changed to monetized security, 1.5 billion square meters will be purchased from the market according to 50% of the purchase volume, up to 300 million square meters per year.

Secondly, although on the whole, the urban registered population may have passed the saturation standard of 1 ∶ per household, in view of the uneven housing ownership and some incomplete housing facilities, there are still a considerable number of registered population with improvement and rigid needs. If the average annual sales of 1 billion square meters in recent years are regarded as the rigid and improving needs of urban residents, and assuming that the average annual scale will remain unchanged in the next five years, the total demand during the 13th five-year Plan period will be 5 billion square meters.

As a result, it can be estimated that the total demand for commercial housing of the registered urban population in the next five years will be about 6.5 billion square meters, but it is still lower than the sum of the current surplus inventory and the future potential supply. To achieve inventory removal and maintain the sustainable growth of the housing market, it is necessary to open up new demand, of which the most realistic demand is the housing demand of migrant workers' citizenization.

It is estimated that migrant workers will buy a total of 2.31 billion square meters of new houses in the next five years. According to a survey of migrant workers by the National Bureau of Statistics, the total number of migrant workers in 2014 was 270 million, of which only 1% bought houses in cities and towns, 13.3% returned to rural areas, 36.8% rented houses, 17.2% lived in sheds, and 28.3% lived in unit dormitories. According to the urbanization of 100m people in the next five years, if 70 per cent of the household population buys houses in cities and towns (33.3 square meters per capita), the annual demand for houses dominated by migrant workers will reach 460 million square meters.

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Whether or where migrant workers can afford to buy a house depends on the income of migrant workers and the housing prices in the cities and towns where they are employed. According to the data of the National Bureau of Statistics on migrant workers, among the 170 million migrant workers who went out in 2014, 20% of them went out with their families and 80% of them went out alone; from the perspective of employment towns, 30.5% of migrant workers were in municipalities directly under the Central Government or provincial capitals, 34.2% in prefecture-level cities and 30.9% in small towns. In terms of income and growth, the average income was 2864 yuan, with a growth rate of 9.8%. Among them, the construction industry was the highest, at 3292 yuan, and residential services, repair and other services were the lowest, at 2532 yuan. Based on the above data and the China Statistical Yearbook data and local housing price data, the affordability of migrant workers can be roughly estimated.

First, the estimation of migrant workers' household income: generally speaking, migrant workers' couple are employed in cities and towns and only one is employed in cities and towns, the income is different. According to the survey data and statistical data of the National Bureau of Statistics, it is estimated that the annual income of all relocated families is 80, 000 yuan, of which the wage income is 72000 yuan (estimated by the monthly average of 3000 yuan) and the agricultural income is estimated to be 8000 yuan (based on the net income of farmers). The annual income of single-relocation families is more than 40, 000 yuan, of which the wage income is 36000.

Second, the estimation of house prices in cities of different regions and levels: based on the average price of 7000 yuan per square meter in prefecture-level cities above the provincial capital level, the price of a house of 100 square meters exceeds 700000 yuan, with a down payment of more than 140000 yuan; in prefectural-level cities, according to the average price of 5000 yuan per square meter, a house of 100 square meters is 500000 yuan, with a down payment of at least 100000 yuan. In county-level cities, at an average price of 3000 yuan per square meter, a house of 100sq m is 300000 yuan, with a down payment of at least 60,000 yuan; in central towns, at a price of 1500 yuan per square meter, a house of 100sq m needs 150000 yuan, with a down payment of at least 30,000 yuan.

Third, the calculation of the affordability of migrant workers: the house price-to-income ratio is calculated through the house prices in different cities and the income status of different families. The house price-to-income ratio of the whole relocation family in prefecture-level city, county-level city and central town is 1 ∶ 6.75,1 ∶ 3.75 and 1 ∶ 1.5 respectively, while that of single-relocation families in prefecture-level city, county-level city and central town is 1 ∶ 12.5,1 ∶ 6.75 and 1 ∶ 3.75 respectively. According to the reasonable range of the price-to-income ratio of 1 ∶ 2-6, it can be seen that the affordability of all-relocation and single-relocation families in cities above the provincial capital exceeds the reasonable range, and the affordability of single-relocation families in prefecture-level cities exceeds the reasonable range.

Generally speaking, migrant workers basically have the housing affordability in cities below the prefectural level, but do not have housing affordability in provincial capitals and above, and the housing affordability of migrant workers' families in the eastern region is poor. the housing affordability of migrant workers' families in the central and western regions is better. At the same time, nearly 70% of migrant workers are employed in cities and towns at and below the prefecture level, and their identity and the improvement of the welfare of left-behind families determine that migrant workers tend to buy houses in their hometown. Therefore, migrant workers are most suitable and most likely to buy houses in cities and towns at and below the prefecture level.

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Under the assumption of a sound institutional system such as housing finance, migrant workers basically have the ability to pay for housing in cities and towns below the prefecture level, but there may still be a funding gap of 50% for families with their families going out to work, and 75% for families with one person going out to work. The lack and restriction of housing finance and other related systems, and the problems of infrastructure and public services in cities at and below the prefecture level will lead to a low proportion of migrant workers buying houses.

First, the ability of migrant workers to buy houses is reduced because of financial exclusion and institutional constraints. First of all, in terms of policy housing finance, migrant workers account for only 5.6%, and the proportion of local migrant workers' provident fund is 5.3%, and most of them cannot be carried forward and cannot be used to rent houses. Secondly, in the aspect of commercial finance, there is household registration discrimination in the inflow of migrant workers to purchase houses and obtain housing mortgage loans, while there are still many obstacles for migrant workers to obtain loans with land, housing and other fixed assets in the export areas. In addition, the land contract, the right to the use of homestead and the right to collective income that can form the income of migrant workers are also difficult to be exchanged, and the income and assets are difficult to realize.

Second, the willingness of migrant workers has declined because of the urban environment and household registration. First of all, the provision of public services is based on household registration, and migrant workers do not have access to the same education, health care, employment and social security as the urban population, thus reducing the willingness of migrant workers to buy houses. Secondly, there is a lack of infrastructure and low level of public services in cities at and below the prefecture level, especially in small towns in the central and western regions, lack of infrastructure and public services, although migrant workers have purchasing power, but also lack the incentive to buy houses and move in.

To resolve the real estate inventory, there is an urgent need to accelerate the citizenization of migrant workers and promote the reform of the housing system to meet the new citizens.

First, we can learn from the former blue seal hukou system to bring home buyers into the population covered by residence permits. We will comprehensively promote and improve the residence permit system, no longer consider or reduce the number of years for employment and social security, and enjoy public services and infrastructure on an equal footing with registered residents. In particular, the right to equal quality education for their children. The government gives equal employment and entrepreneurial opportunities to home buyers and registered residents, and brings them into the employment and entrepreneurial service system to provide services and support.

Second, we can explore and implement the common property right system of commercial housing and implement the division and sale of housing property rights. On the one hand, developers are short of funds and urgently need to get rid of inventory; on the other hand, since the purchasing power of migrant workers is limited, they can consider implementing the method of holding part of the property rights developers and selling them to property buyers, and jointly go to the bank to deal with and obtain mortgage loans. Developers and property buyers can hold them at the ratio of 3 ∶ 7, 5 ∶ 5 and 7 ∶ 3. The developer leases part of the property to the owner and agrees on the price at which all of it will be sold to home buyers in the next few years.

Third, an inclusive housing financial system can be established to achieve policy and commercial coverage of migrant workers. In view of the existing exclusion of migrant workers by policy finance and commercial finance, we can establish an inclusive policy housing financial system, expand the coverage of provident fund to low-and middle-income residents, and cover migrant workers with provident fund. In addition, we will implement the system of withdrawing and buying houses in different places, and establish a commercial inclusive financial system, so that migrant workers can obtain equal opportunities with registered residents in commercial housing mortgage loans. At the same time, speed up the improvement of farmers' housing property rights and other mortgage and guarantee system.

Fourth, migrant workers can be allowed and encouraged to transfer land contract rights and sell and rent housing. The protection of property rights and market-oriented transactions of migrant workers in rural areas are not only conducive to the rational use of resources, farmers are happy in cities and towns, but also help them to live in cities and towns, but there are still many legal and institutional obstacles. To this end, we can sum up the pilot experience and promote the transfer of land contract rights, the transfer of homestead use rights and the implementation of collective income distribution rights in accordance with the law.

Fifth, the infrastructure and public services of cities below the prefecture level can be improved. We will establish a financial system linked to the resident population and responsible at different levels, increase transfer payments in cities and towns with low administrative levels, and establish a housing subsidy system for migrant workers. We will speed up the formulation of investment policies tilted towards small cities, improve their employment absorptive capacity, change the current situation of the mismatch between urban employment absorptive capacity and housing affordability, and encourage more migrant workers to buy houses in small towns and migrate permanently.