Beijing Ponders Rent Controls and Regulation

The government in Beijing is eyeing plans to introduce rent controls and regulate the fees realty agents can charge-no doubt welcome news for many residents trapped in an overheating housing market.

Authorities in Beijing are currently considering the possibility of new rules for housing rentals that would limit rent increases and set guidelines limiting rents and agent fees

The Beijing Municipal Commission of Housing and Urban-Rural Development’s proposed scheme contends that current legal structures do not meet the current needs of new rental models, such as rental loans and long-term apartment leases. Under the new proposal the housing commission will monitor rent increases and could be given powers to limit increases, investigate and punish rent gouging.

If the draft legislation passes, Beijing will be China’s second city to introduce such measures after Shenzhen enacted similar legislation earlier this year.

Under the new proposals landlords will be restricted to collecting rent monthly and deposits will be limited to one month’s rent. At present in Beijing typically landlords demand three month’s rent in advance plus a month’s rent deposit; however six month’s rent is not unheard of.

Following the collapse of Danke, one of China’s largest online apartment rental platforms last year, regulators have been keeping a close eye on the rental market and the debt fuelled growth in the sector.

Danke, and its competitors, business model was to rent apartments from landlords on long-term contracts then sublet them tenants. The pandemic driven financial collapse of Danke resulted in the eviction of thousands of tenants even though rent had been paid in advance.

Author: Perkins

Consulting Analyst Ryan Perkins’ articles and research have been featured in publications around the world and their analysis has been used by global companies such as Transport Intelligence, Parcel Force, UPS and the Economist Intelligence Unit.

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