Housing Crisis and Corrupt Government

 

 

Source: http://news.pub.house365.com/whestate/system/2009/11/09/010035817.shtml

From news.pub.house365.com

 

ChinaGeeks translated an article from China Youth Daily:

Housing is meant to be a one of the basic necessities of life, but at present it has become a very common problem. If the people want to realize their dream of having housing, they must count on the government to move. If government employees could feel the pain caused by these housing problems, that would give them the impetus to do something. But housing welfare for government employees is widespread, and it allows them to distance themselves from the housing market. Whether housing prices are high or low has little effect on their housing, so we must take useful steps to get them to do something. We can’t rely on their senses of responsibility or their consciences.

If the law has banned it, but civic organs are doing it openly, then that is public corruption! This kind of corruption not only destroys the government’s incentive to regulate the housing market, it gives government employees a vested interest in the continued rising of housing prices. Because government employees can get houses easily, the value and profit potential of their property increases as the amount of property they have goes up.

The existence of corruption impedes national efforts to safeguard the housing [market]2. Commercial prices are so high they’re untouchable, so a lot of people have placed their hopes in [the government] safeguarding the housing [market]. And while it’s popular right now to talk about protecting the housing market, this hasn’t really helped the common people much either, and the reason is again corruption. As commercial prices rise, the profit potential for those in power through rent-seeking rises. There has been a mass of construction in the past few years, which should bring housing prices down, but for the corrupt officials who’ve been bought by businessmen and control interests in the housing market, what reason is there to bother with “safeguarding housing”3. Money is owed on “safeguarded housing” all over, and in addition to the connections with the GDP and land finance, corrupt officials are also partly to blame.

It is an interesting angle to look at the housing crisis in China. The author assumes that the solution of the rising housing price is government official’s responsibility and conscience. And because “government employees can get houses easily”, they couldn’t “feel the pain caused by these housing problems”, so they don’t have the “impetus to do something”.

The corrupted government officials should be blamed, obviously, since the corruption behaviors shouldn’t happen anyway. The close relationship between developers and government officials is widely known in China. Sheltered under the local government’s umbrella, developers could pay no attention to the laws and rules, and manipulate the housing market.

But the corruption couldn’t be solved by arresting one or two authorities, it can only be prevented by improving China’s legal supervision system, which means, the centralization of power should be changed. If the legal supervision system is functionally running, if government is under the surveillance from independent organizations and institutes, the corruption will have no place to hide.

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