Shortage of Housing for Workers in Chengdu

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Shortage of Housing for workers in Chengdu
What is a significant housing problem that this place is affected by?
China’s great economic leap led to creating new and better opportunities for millions living in rural areas. Therefore, there was a lot of migration from rural areas as people sought the new opportunities that could be found in the urban areas. The movement from rural to urban areas introduced a major housing problem that the Chinese government worked tirelessly to resolve with the help of local governments. The imbalance between demand and supply of houses introduced the problem of higher prices that further exacerbated the housing problem in China’s major cities (Lin et al., 2). In most cities, the local governments had to intervene to help maintain the housing prices to manageable levels. In Chengdu, for example, the government resorted to limiting price and purchase restrictions as it sought to curtail the abnormal house prices. In 2016, Chengdu was among four major cities in China that decided to restrict property purchases in a move meant to curtail rising home prices (Reuters). However, in 2022, things appear to have changed, with Chengdu experiencing a housing shortage to support the city’s housing needs, particularly for workers.
Currently, Chengdu is facing a major housing problem that greatly impacts workers’ lives who are still migrating into the city in search of greener pastures. Without the intervention of the local government, the city could face a much bigger problem that could curtail growth in the long term. If the problem is left to aggravate, the chances are high that it will create a challenge similar to the one experienced in the Northeast Corridor, Greater Portland, California, and Greater Seattle (Yglesias). In these places, the imbalance between supply and demand is so profound that it will take years to resolve. Therefore, Chengdu ought to act and cater to its housing supply needs.
What is causing this issue?
The increase in housing problems has increased the costs of owning property. A majority of the workers are unable to pay for the increasing housing costs. The high costs discourage low and middle-income workers in Chengdu from affording houses. Hence, developers are unable to sell more units. According to Cullingworth and Caves (336), where investors do not foresee a profit, they will not invest. The authors further indicate that where alternative investments are more profitable, or the incomes are too low to enable the rental housing investors to make expected profits, there will be a shortage of houses. Because of the inability of the workers in Chengdu to afford the houses, the incentive for developers has decreased, further fueling the shortage of needed units.
How has the government tried to address it?
The government has made favorable policies to encourage developers to invest in the town. In November 2021, Chengdu became the first city in China to ease the rules for constructors (Bloomberg News). The city agreed to accelerate approval for home sales and property loans in this regard. Additionally, Chengdu implemented measures to ease restrictions on utilizing sales proceeds. The move aim...