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Friday 6 February 2009
Shanghai Officials Granted Housing Subsidies
Shanghai officials were granted housing subsidies in the midst of a real estate market downturn. The government denies that it distributed such subsidies.
Shanghai officials were granted housing subsidies in the midst of a real estate market downturn. The government denies that it distributed such subsidies.
Chenzhong Xiaolu, Caijing 5 February 2009
Select local officials in the Shanghai government and employees at government enterprises received housing subsidies before Chinese New Year amid a slowing real estate market.
Different subsidy packages were offered to those who signed employment contracts before 2000 and those who signed after 2000. Both types of packages varied depending on the employee’s level, department, and tenure.
For example, for municipal officials in Shanghai, clerks are eligible to receive 1,400 yuan per square meter for a 65 square meter apartment, totalling about 90,000 yuan. Higher-ranking officials are eligible for subsidies covering an additional five square meters for each additional rank.
In Changning District, an official’s level determines how many square meters his subsidy will cover, and the coverage then determines the amount per square meter that the official will receive. A house of 60 square meters or less will be subsidized at 1,400 yuan per square meter. If the total eligible coverage exceeds 60 square meters, then the remaining space will be subsidized at 2,800 yuan per square meter. Couples in the Changning District government will each receive subsidies of 2,800 yuan per square meter for the number of square meters that their government ranks entitle them to.
Shanghai handed out a wave of housing subsidies eight years ago, said one official, who received a subsidy this year. In 2001, according to that official, the government had promised to distribute 2,800 yuan per square meter, but in fact, gave out 1,400 yuan per square meter. The recent subsidies thus match the precedent set in 2001.
As real estate prices rose, officials who took office after 2000 and thus did not benefit from the 2001 subsidies began demanding housing subsidies. Another government source, speaking on the condition of anonymity, told Caijing that those officials may now be eligible for a subsidy in late 2009. Those who received a subsidy in 2001 may now be eligible for a second subsidy this year.
Another official, who also received a subsidy this year, said he intends to use the subsidy to repay his home loans early. He said because the subsidies were handed out in cash, he is free to spend them on cars or other purchases. According to an official who has not yet received a subsidy, those in his position must wait for the subsidies to be deposited in their accounts provided by the government to cover their housing expenses.
National government officials sent to Shanghai and officials who have served the Shanghai government for less than five years are excluded from the subsidy program. Other institutions, such as schools and state-owned enterprises in Shanghai, have not been informed of the program.
The Shanghai government did not announce the total subsidy amount or the beneficiary group. It is estimated that given the 80,000 government officials in Shanghai, subsidizing just half will cost several hundred million yuan.
According to the Beijing News, a Beijing-based newspaper, a Shanghai government staffer denied that the government distributed subsidies this year. The official told Beijing News that Shanghai handed out housing subsidies in 2001 -- 1,400 yuan per square meter -- but Shanghai did not distribute a second wave of subsidies.
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Shanghai Officials Granted Housing Subsidies
Shanghai officials were granted housing subsidies in the midst of a real estate market downturn. The government denies that it distributed such subsidies.
Chenzhong Xiaolu, Caijing
5 February 2009
Select local officials in the Shanghai government and employees at government enterprises received housing subsidies before Chinese New Year amid a slowing real estate market.
Different subsidy packages were offered to those who signed employment contracts before 2000 and those who signed after 2000. Both types of packages varied depending on the employee’s level, department, and tenure.
For example, for municipal officials in Shanghai, clerks are eligible to receive 1,400 yuan per square meter for a 65 square meter apartment, totalling about 90,000 yuan. Higher-ranking officials are eligible for subsidies covering an additional five square meters for each additional rank.
In Changning District, an official’s level determines how many square meters his subsidy will cover, and the coverage then determines the amount per square meter that the official will receive. A house of 60 square meters or less will be subsidized at 1,400 yuan per square meter. If the total eligible coverage exceeds 60 square meters, then the remaining space will be subsidized at 2,800 yuan per square meter. Couples in the Changning District government will each receive subsidies of 2,800 yuan per square meter for the number of square meters that their government ranks entitle them to.
Shanghai handed out a wave of housing subsidies eight years ago, said one official, who received a subsidy this year. In 2001, according to that official, the government had promised to distribute 2,800 yuan per square meter, but in fact, gave out 1,400 yuan per square meter. The recent subsidies thus match the precedent set in 2001.
As real estate prices rose, officials who took office after 2000 and thus did not benefit from the 2001 subsidies began demanding housing subsidies. Another government source, speaking on the condition of anonymity, told Caijing that those officials may now be eligible for a subsidy in late 2009. Those who received a subsidy in 2001 may now be eligible for a second subsidy this year.
Another official, who also received a subsidy this year, said he intends to use the subsidy to repay his home loans early. He said because the subsidies were handed out in cash, he is free to spend them on cars or other purchases. According to an official who has not yet received a subsidy, those in his position must wait for the subsidies to be deposited in their accounts provided by the government to cover their housing expenses.
National government officials sent to Shanghai and officials who have served the Shanghai government for less than five years are excluded from the subsidy program. Other institutions, such as schools and state-owned enterprises in Shanghai, have not been informed of the program.
The Shanghai government did not announce the total subsidy amount or the beneficiary group. It is estimated that given the 80,000 government officials in Shanghai, subsidizing just half will cost several hundred million yuan.
According to the Beijing News, a Beijing-based newspaper, a Shanghai government staffer denied that the government distributed subsidies this year. The official told Beijing News that Shanghai handed out housing subsidies in 2001 -- 1,400 yuan per square meter -- but Shanghai did not distribute a second wave of subsidies.
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