Rents pose a great impact on the costs of living. Like the real estate sector, the proposed rent control requires a long-term mechanism.

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To address the disordered housing market, the Ministry of Housing and Urban-Rural Development together with eight other departments released a notice calling on big cities with net population inflow to establish governmental rental platforms that provide convenient information posts to protect legal rights.

To date, a dozen cities, including Guangzhou, Shenzhen and Hangzhou, have launched such plans and platforms.

In recent years, many people encountered rental scams because they knew little information about the targeted house property. To solve this problem, Chengdu Municipal Bureau for House Property opened a rental platform where people can log on to rent an apartment, find an agent or post information about their housing properties. Nearly 330,000 posts were made on the platform by this April and each one was marked with valid property categories, including “secured assets,” “unsecured assets,” “verified property rights” and “rentable.”

The platforms adopt online rental contracts and regulate behaviors of lessees, tenants and intermediary agencies, allowing people to complete all transaction procedures ranging from housing property registration and information dissemination to rental certification. In a sense, these platforms perform duties of credit management for leasing enterprises and intermediaries as well as their personnel, thus setting up a comprehensive information database of main market players.

The rental platform in Chengdu, Sichuan Province, has established a unified procedure for contract signing and online transactions. Also, information of all types of housing property has been verified by the digital system of the regulatory bureau, no matter whether they are public rental housing, individual apartments, or they are represented by intermediary agencies or leasing companies. In addition, the evaluation system allows all leasing parties to comment on each other and ask for relevant information, which effectively supervises the involved people and offers reference for other users.

Hua Jie is the founder of Linbaoke Asset Management Company in Hangzhou, Zhejiang Province. He said that a standardized and information-based platform fuels the healthy development of the entire sector. Leasing companies can whittle down expenses in operation and save part of research investment in digitization work. With the support of governments, the information grew much more reliable, so that users are willing to choose its one-stop service with lower costs and higher efficiency.

The supervisory platform in Hangzhou regulates big data while offering diverse service. It adopts multiple technologies of Alibaba Group concerning evaluation comments, online payment and credit system. What deserves attention is that people must register with real names and the platform uses facial recognition technology to verify users’ identity and operation. The Sesame credit system, a private scoring mechanism under Alibaba, was also introduced to the platform, involving all lessees, tenants and intermediary personnel and ensuring the payment security. Furthermore, leasing parties can sign online contracts through multiple channels.

Credit-based housing rental not only reduces users’ financial burden but also restores market order by filtering out irregular intermediary agents, fake housing information as well as malicious breaches of contract. Cities like Hangzhou will attract more capable people and become more likely to cement core competitiveness when people find it easier to settle in these places, said Hu Tao, general manager of the Sesame Financial Service Group.

The traditional model has failed to offer a favorable experience for tenants and lessees due to information asymmetry, said Liu Lu, an associate professor from the Southwest University of Finance and Economics. He said the internet can improve the convenience and transparency of the housing rental market, supporting the development of the entire sector. “More internet companies, even State-owned enterprise, are expected to join in as China incrementally encourages the housing rental sector. If so, the healthy growth will help to navigate the market complexity,” Liu added.

 

The article was edited and translated from People’s Daily.

(edited by MA YUHONG)