Sinopec allegedly siphoned off cheap homes

An affordable housing project under construction in Beijing, intended to house low-income residents, is said to have been held back by some central government departments and State-owned enterprises (SOEs) as a source of "welfare housing" for their employees, reported China National Radio (CNR) on Saturday.

The back-door housing scheme, which was spotted in Guanghua New City, a residential community along Beijing's East Fourth Ring Road with 18 buildings and covering an area of 1.08 million square meters, has triggered a public outcry and demands for an investigation.

Despite the land being reserved for affordable housing projects, CNR said the buildings were actually priced at around 10,000 yuan ($1,630) per square meter for employees with central government and SOEs, a level less than one-fifth of the market price in that area.

Some 20 percent of the apartments are reportedly owned by petroleum giant Sinopec. Local regulations stipulate that owners of the affordable homes can resell the property five years after obtaining the property ownership certificate.

Zeng Sihai, a spokesperson from Sinopec, refused to comment when reached by the Global Times, saying he was "not aware of such a project."

A lottery mechanism is used to decide who can live in affordable housing, after applicants satisfy qualifying criteria.

However, in cities including Beijing, Qingdao, Shandong Province, and Zhengzhou, Henan Province, authorities have been reported to have abused their power by intercepting some houses for their own sake.

The Zhengzhou housing management bureau revealed that between 2005 and 2009, the number of local affordable housing units that were doled out by lottery only accounted for one third of its total.

Experts said the remainder of those had been reserved by different government agencies.

"Government agencies, real estate developers and officials in charge would retain some housing units for their own personal gain," Liu Hai, a real estate developer in Yichun, Jiangxi Province, told the Global Times, adding that such a move is normal only when those houses are built by themselves.

A lack of supervision in the distribution of affordable housing might be the main reason. "Developers only participate in the construction, and they would hand houses over to local authorities who can decide on its price and distribution," said Cheng Sheng, director of the China Real Estate Data Academy.

Designed to solve the housing problems in big cities for low-income workers, the process of allocation has long been questioned by the public.

In June 2009, 12 villas were built on land intended for affordable housing in Zhengzhou. There have also been a lot of media reports that rich people driving high-end cars, including Mercedes-Benz and BMWs, live in those communities.