A government-subsidized housing project in Xuhui district. Photo: IC

By Liu Shengnan

Shanghai Municipal Housing Support and Building Administration Bureau is asking developers to build government-subsidized housing in their new residential compounds.

Liu Haisheng, head of the bureau, said at a local government meeting on Monday that Shanghai is working hard towards the target of building 15 million square meters of subsidized housing projects by the end of 2011.

The local government has proposed to order all property developers to make at least 5 percent of the floor space of new real estate projects as subsidized apartments, according to a report by eastday.com. The subsidized apartments will be used for affordable housing, public renting and relocation projects. The report said a detailed plan will be announced in early 2011.

"Some of the apartments in the building of Lido International Mansion Hotel, a serviced apartment in Jing'an district, have been subsidized by the local government for relocation projects," said Xue Jianxiong, senior analyst from real estate services company E-house China. "More and more property developers will build their projects with a proportion of subsidized housing included."

According to Xue, some developers may also choose to build subsidized housing projects near their luxury villa compounds. "I don't think it will affect the property price," he said.

A press officer at a local property developer who asked not to be named told the Global Times as they already include subsidized housing in some of their projects, complying with any such new requirement will not be a big problem.

Shanghai's mayor, Han Zheng, said at the meeting that the city will provide more subsidized apartments in the coming years, including 185,000 units by the end of 2011.