Move, or pay more rent?

In the past year, many young people working hard in big cities have faced such a choice.

  In 2021, the average rent increase in 55 major cities across the country will be close to 10%, and the rent of individual housing in eight first-tier cities will increase by 24.55% compared with the same period in 2020. Among them, the average rental price in Chengdu will increase by 40% compared with the same period last year. Shanghai, Hangzhou and other places also increased by more than 20%.

  High rents have become a problem that the vast majority of urban foreigners have to face, and it is not just a financial problem.

 The Evolution of Urban Tenants

  Over the past 30 years, the rental population in China's big cities has changed a lot.

In the early days, the main group of people who rented houses in big cities were the "peasant workers" group.

At that time, most of the highly educated young people rented a house for a short-term transition, and eventually they had to buy a house.

But today, a large number of young people in China's big cities are living in long-term rentals.

  In a recent large-scale survey covering ten megacities across the country, my research team and I found that the renting group is mainly composed of the post-80s and post-90s, who account for 62.9% of the total renting population in China's megacities.

Among the young renters born in the 1980s and 1990s, three-quarters are non-local tenants, and 61% of non-local tenants have a college degree or above.

  Young people with high education and middle-to-high income have become the main group of renters in China's big cities, largely because it is increasingly difficult for them to afford housing in big cities.

As China's urbanization level increases and the real estate industry develops rapidly, buying real estate in big cities has become the best investment to resist inflation.

At the same time, in China, housing is often tied to public services such as children's education resources, which further strengthens the willingness and investment confidence of home buyers.

The influx of "real estate speculation" hot money into megacities has further raised housing prices.

  About ten years ago, although young people in big cities needed loans to buy a house, they could still afford to buy a house in big cities such as Shenzhen and Shanghai if they had parental support or if they sold their home in second- and third-tier cities.

But now, the original 90-square-meter house in the suburbs of Shanghai and the price of 2 million has now risen to seven or eight million.

Even if many young people sell a few apartments in their hometown, they cannot afford a single apartment in Shanghai.

  Our research found that under China's current rental market environment and household registration policy, whether or not to own a house greatly affects the happiness and fairness of young people who work hard in big cities.

Among homeowners, 77% consider themselves a happy person, nearly 20% higher than renters; the difference in overall life satisfaction ratings is even higher by 24%.

It can be seen that a higher education level is not necessarily happier, and whether or not owning a house has a greater impact on the happiness of young people in big cities in China.

  One of the reasons that affects their happiness is that the proportion of rent is too high.

Before the rent hike last year, rent for highly educated non-local tenants accounted for nearly one-third of their income.

In fact, their personal income is often higher than that of the local homeowners, but their rent expenditure greatly inhibits the expenditure on children's education and cultural consumption, which reduces their happiness.

  At the same time, the experience of renting also affects young people's perception of social justice.

In fact, the main factor affecting their sense of social justice is whether they have a local hukou.

Some smaller cities have de-emphasized the importance of hukou in recent years, but in large cities such as Beijing and Shanghai, a person's hukou still plays a key role in determining access to public resources such as education, health care, pensions and social security.

For example, it is difficult for children without local household registration to obtain local public education resources, especially the right to participate in the college entrance examination on an equal footing.

Therefore, regardless of whether they own a house or not, urban residents with local hukou tend to think that society is more fair, while non-local tenants have a relatively low sense of social fairness.

  It is worth noting that in the study, young tenants with a bachelor's degree or above have advantages in terms of education, occupation, personal income, etc., but their sense of social justice is the lowest, and their happiness is relatively low. Less than out-of-town tenants with less education.

This may be because they feel that their education, occupation and income are no worse than those of the local group with housing and household registration, but they cannot afford housing and are excluded from some public services.

  However, the most vulnerable are still mainly non-local tenants with no local hukou and with a bachelor's degree or less.

They account for 29% of the total renting population in megacities, their average years of education is 10.6 years, and their occupations are mainly individual industrial and commercial households, service workers and industrial workers.

Their personal incomes are not low—not far off the homeowners and local renters—but they have the lowest household incomes, the lowest job stability, the worst working and living conditions, the least chance of advancement, and the more difficult be respected by others.

Rent accounts for the highest proportion of their daily consumption expenditures, second only to highly educated non-local tenants. At the same time, they also have to pay high expenses for children's education and support for the elderly, so they are also the group with the lowest cultural consumption expenditure.

They feel the strongest exclusion from the natives and are often considered to be the group that undermines social security, public order and local culture.

As a result, their sense of well-being and fairness are lower.

  From the perspective of urban development, in 2013, both in terms of GDP growth and population growth, China's large cities with service and consumption as the main advantages have surpassed the small and medium-sized cities with industrial production and investment as their main advantages. , become a new driving force for economic growth.

In this context, service personnel such as couriers, food delivery workers, and restaurant waiters have become the mainstay of the commercial service industry in big cities, maintaining the normal operation of the city every day.

In fact, the demand for this group of people in big cities is far greater than that of high-end talents.

What is the solution to the "rent problem"?

  Big cities gather the most cutting-edge innovation and development forces in China, and young people are the fresh forces that continue to promote the development of all walks of life.

Meeting the living and development needs of urban young people is not only the responsibility of the government, but also an inevitable requirement to enhance the competitiveness of cities.

When housing prices are unattainable, rising rents make working and living in big cities more difficult, seriously affecting young people's sense of happiness and fairness.

How can young people in big cities find a place to live in the city where they work and contribute?

  First of all, to reduce the proportion of rent expenditure, in the long run, the government needs to increase the supply of affordable housing and public rental housing, especially the land supply in this regard.

At present, local governments are often more willing to sell or lease limited land at lower prices to industrial enterprises that can bring continuous fiscal revenue, while the prices sold to real estate developers and residential land are very high.

The limited supply of such land has led to rising housing prices.

  The government has also begun to realize the importance of developing affordable rental housing.

This year, the State Council clarified for the first time that the housing security system should include public rental housing and affordable rental housing.

The Ministry of Housing and Urban-Rural Development has also listed the development of affordable rental housing as the focus of its work in the next few years.

  But it will take time to establish a complete housing security system in major cities.

In the short term, the tax burden on rent should be reduced, and taxes should be reduced for renters. At the same time, laws and regulations should be introduced to curb the rapid rise in rent and control the increase in rent.

For example, on August 31, 2021, a document issued by the Ministry of Housing and Urban-Rural Development clearly stated that the annual increase in urban housing rents should not exceed 5%.

  On the other hand, the government should increase opportunities to settle in the local area, provide equalized public services, and reduce discriminatory policies related to household registration, housing and other factors, especially for non-college tenants, and the government should also provide fairer education and housing for their children. , high-quality public resources.

  When renting becomes more and more common, whether it is to reduce the burden of rent, or to solve the unfair treatment caused by different rights to rent and household registration, it is something that must be solved in the future.

If these young strugglers cannot live and work in peace, the development of the city and the industry will be impossible.

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