From highly sought after by capital to frequent thunderstorms, long-term rental apartments have always received widespread attention from the society.

The development of my country's long-term rental housing market is still in its infancy, accompanied by prominent problems and industry chaos such as "rental loans", "high incomes and low yields".

On the one hand, we should make overall considerations, increase the supply of housing, and favor low-income groups and new citizens; on the other hand, we should focus on improving the industry’s credit evaluation mechanism, and improve the long-term rental apartment corporate capital supervision mechanism, so as to protect the rights and interests of relevant renters. At the same time, prevent systemic financial risks.


The industry's stubborn illness needs rectification

  "Rent loans" are long-term rental apartment companies that use tenant rent stability as a bargaining chip to obtain loans from third-party loan platforms to ensure the platform's source of cash flow.

This kind of high-risk business behavior is widespread in the industry.

At the end of 2019, the long-term rental apartment brands Qingke Apartment and Eggshell Apartment went public in the United States successively. According to the prospectus of the two companies, "rental loans" are the largest source of cash flow for these two companies.

  In this model, the tenant is the lender, and the rent paid by the tenant is actually equivalent to repaying the loan.

Once there is a problem with the operation of the long-term rental apartment platform, there will be a chain reaction, from the loan platform to the tenant to the landlord will be implicated.

  Another major hidden danger in the long-term rental apartment industry is the "high income, low output" operating model, where houses are acquired from the landlord at a high price and then leased to the tenant at a relatively low price.

Yao Jinbo, CEO of, said that some long-term rental apartment operators adopt high-risk business models such as "high-in, low-out" to seize the market, and it is not uncommon for the capital chain to break and renters to be evicted for no reason.

Some leasing companies hoard large amounts of housing, drive up rents, and disrupt market order.

  Wang Feng, head of the Youth Rights and Interests Department of the Communist Youth League Central Committee, said that young renters lack experience in dealing with transaction requirements such as "long-term receipts and short-term payments" and "rent loans" for leasing companies.

In the event of disputes, young tenants may face multiple problems such as homelessness, economic losses and credit damage.

He suggested that from the aspects of guaranteeing housing supply and demand, regulating market behavior of intermediary platforms, and strengthening industry supervision, the pain points of young people renting houses should be solved.

  Zhu Jiandi, the chief partner of Lixin Certified Public Accountants, believes that "rental loans" should be incorporated into the financial risk supervision system in a timely manner, the supervisory body should be clarified, and the management and control of the use of funds after loans should be strengthened.

Operators should be required to entrust funds to relevant financial institutions to prevent long-term rental apartment companies from using "rent loans" to expand disorderly, curb financial risks, refine the regulatory functions of all parties, and form a combined regulatory force.


Implement "Hire Purchase Same Right" to guide the healthy development of the industry

  Implementing simultaneous purchase and renting and cultivating and developing the housing rental market is an important part of deepening the reform of the housing system.

The 2020 Central Economic Work Conference further clarified that standardizing the development of the long-term rental housing market will gradually enable rent-and-purchasing housing to have equal rights in enjoying public services, emphasizing that land supply should be tilted toward the construction of rental housing, and at the same time, it is proposed to reduce the tax burden of rental housing.

  Yao Jinbo believes that renters still have significant differences with buyers in terms of enjoying public resources, especially their children's educational rights and social welfare.

In the short term, local governments should focus on protecting the basic rights and interests of renters, and strengthen the management of chaos such as "arbitrary rent increases and sudden evictions"; in the medium and long term, local governments can gradually untie public services and real estate ownership based on the completeness of public facilities. It is directly bound with people, thereby reducing the equity difference between hire purchases, promoting the balance of key public services such as settlement and education, medical care, and realizing the allocation of people-oriented public service resources.

  Luo Pinliang, a professor in the Department of Industrial Economics of the School of Management, Fudan University, believes that long-term rental apartments are used as a platform to connect housing and tenants. No matter what operating model is adopted, its value should not be limited to solving information asymmetry or simply providing housing. We should make full use of the network effect, platform effect and lock-in effect of the platform through strong resource integration capabilities to provide basic services while satisfying the diverse needs of users, and establish a stable lease cooperation relationship with users.

  At the regulatory level, Luo Pinliang suggested strengthening access management, perfecting the entry barriers for long-term rental apartments, and preventing risks from the source.

Long-term rental apartment operators are diversified, including traditional real estate developers, hotel groups, and new entrants such as Internet companies.

At present, the barriers to entry in the industry are too low, and many operating companies lack certain qualifications and experience, causing frequent problems.

For the control of operational risks, we must start with raising the barriers to entry.


Big cities need "small luck"

  In terms of increasing supply, some provinces and cities have made frequent moves, and some state-owned enterprises have entered the market.

More than 4,000 long-term rental apartments developed and constructed by Shanghai Urban Investment are nearing completion. In addition, many local state-owned enterprises, including Shanghai Real Estate, Shanghai Zhangjiang, and Yuexiu Real Estate, have entered the long-term rental apartment industry.

The long-term rental apartment projects developed by state-owned enterprises are generally large-scale and high-standard, which will become a stabilizer and ballast in the housing rental market.

  Many are lecturers at a museum in Changning District, Shanghai. Before moving to Chenfei's apartment, she rented in Baoshan District, where she commuted about two hours a day.

"In 2015, I heard that I could apply for a talent apartment, so I applied here. After a year of waiting, I will move in in 2016." Many of them can now walk to their work units for more than ten minutes every day, and their quality of life has greatly improved.

  Chenfei Apartment is located on Zhaohua Road, Changning District, Shanghai. This project was originally the Feilo Audio Factory, which was renovated in 2012 and completed in 2014.

Currently, this long-term rental housing project has a total of 229 units.

Among them, small public rental housing with an area of ​​30 square meters accounted for about 60%, and 40 square meters and 50 square meters each accounted for about 20%.

According to Wu Yuehui, director of the office of Changning Public Rental Housing Operation Co., Ltd., the rent of Chenfei Apartment is about half to 2/3 of the rent of similar houses in the surrounding area.

  In Shanghai, similar high-quality long-term rental housing faces the problem of insufficient supply.

Of the 229 units of Chenfei Apartment, about 93% have been rented out. The housing is tight. New tenants have to wait for six months to one year.

Wu Yuehui said that Chenfei Apartment was the first public rental housing project developed in Changning District, but at the beginning of the development, the demand for young people was insufficient.

"For example, it is not equipped with enough fitness facilities and public space. Projects developed in the future should take these factors into account." (Reporter of "Half-Monthly Talking Internal Edition" Issue 5, 2021: Yang Youzong)