Efforts must be made to expedite development of affordable rental housing, Premier Li Keqiang said at the State Council’s executive meeting on June 18, which decided on policies to guarantee basic housing needs in urban areas.

While urbanization is gaining speed with an increasing migrant population, new citizens and young people, including migrant workers and new college graduates, are facing more difficulties in housing, the Premier said.

He stressed that the development of basic rental housing is an important step to improve the housing guarantee system.

For many years, the large-scale renovation of shanty areas has improved living conditions of the people in housing difficulties, and contributed to the stable and healthy development of real estate market, the Premier said, adding that actions will also back up a sound progress of urbanization.

He urged city governments to shoulder responsibilities, calling for participation of market forces and enhanced financial support to increase small and low-price basic housing for rent.

Those at the meeting decided that cities with net population inflow could use collectively owned profit-oriented construction land and land owned by enterprises and public institutions to build affordable rental housing, with unused, inefficiently used business buildings and factories allowed to be transformed into rental houses.

It was also decided that starting Oct 1, housing rental enterprises will be subject to a simple method of tax collection in private rentals, with the value-added tax rate reduced from 5 percent to 1.5 percent. Enterprises and public institutions will see the property tax cut to 4 percent in rentals to individuals and large-scale, professional rental enterprises.