A study of using REITs as an alternative way of financing affordable housing in Chinese major cities, based on the context of Nanjing

Huang, Jie (2019) A study of using REITs as an alternative way of financing affordable housing in Chinese major cities, based on the context of Nanjing. PhD thesis, University of Glasgow.

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Printed Thesis Information: https://eleanor.lib.gla.ac.uk/record=b3343046

Abstract

This thesis examines the possibility of establishing an affordable housing Real Estate Investment Trust (REIT) in major Chinese cities in order to address the financial problem faced by the country’s affordable housing sector. This thesis builds, for the first time, a robust link between the affordable housing sector and REITs in China based on real world scenarios. The link is supported by real data from the affordable housing sector of Nanjing, as well as well-established international practices from Hong Kong and the United States.
In order to establish the link between the affordable housing sector and REITs in China, this thesis uses qualitative methods to address three guiding questions: 1) how affordable housing is financed in Nanjing, what the current problems are in this financing system, and why REITs might be useful; 2) if REITs are useful and necessary in China, what insights can be learned from overseas affordable housing REITs and 3) how an affordable housing REIT can be established in Nanjing based on the Hong Kong and US models and experiences, and what barriers currently exist that prevent Chinese REITs from being created in the affordable housing sector.
This thesis finds that current affordable housing finance in China heavily relies on government borrowings, and public rental housing serves as a source of governmental financial burden as this form of housing cannot be sold to repay the debt. Thus, the Chinese government has considered the vehicle of REITs as the best option to liquidate the existing stock and free resources to fund further investment and repay the debt. In addition, overseas insights suggest that the Hong Kong model could provide the strategic framework, while the US model can provide specific tactics to be adopted in the proposed Chinese REIT in order to avoid some of the difficulties experienced in Hong Kong. This thesis ultimately suggests that a purely affordable housing REIT (containing housing only) would be impossible to establish in Nanjing, or in similar major cities, under current conditions. However, an REIT holding commercial real estate within affordable housing estates would be a workable solution to the affordable housing sector, although it would face barriers of law, taxation and a lack of skilled workers.

Item Type: Thesis (PhD)
Qualification Level: Doctoral
Additional Information: Funded by the China Scholarship Council (CSC).
Keywords: Affordable housing, REITs, China.
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
Colleges/Schools: College of Social Sciences > School of Social and Political Sciences > Urban Studies
Supervisor's Name: Orr, Dr. Allison and Gibb, Professor Ken
Date of Award: 2019
Depositing User: Mr Jie Huang
Unique ID: glathesis:2019-41096
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 29 Mar 2019 14:09
Last Modified: 02 May 2019 08:07
URI: http://theses.gla.ac.uk/id/eprint/41096

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