Evaluation of the Housing Affordability in Beijing with the Residual Income Approach

Facilitating affordable housing has received considerable attention by the Chinese government. However,developing better measurements of affordability due to the income disparity and housing inequality in China is still challenged. In this paper,a new measure calledresidual incomeis applied for Beijing household from 2004 to 2008. With this method,a minimum required budget for a family is calculated for the basic necessities and astandardunit. Financial loans and housing wealth are also considered. It reveals that there are great difference of housing affordability among different income levels,middle and low income families can not afford a standard unit,while ownership of previously public housing can improve housing affordability of all kinds of families . The role ofeconomic housingon improving housing affordability is very limited and shared-right housing is feasible for improving the housing affordability of middle and low income families.