WORLD PROPERTY CHANNEL ®

Striving hard to avoid a potential real estate bubble implosion, Chinese authorities are cracking the whip today on all local governments planning affordable housing for millions of low-income workers.

The government wants the construction of 10 million houses started by Dec. 1.

The subsidized housing will cost an estimated 1.3 trillion yuan ($200 billion), with about 500 billion yuan provided by the central and local governments and the rest coming from the private sector, Xinhua news agency said.

But less than one-third of the low-income homes to be built this year in some cities had started due to a lack of funds and some projects had quality problems, Xinhua said.

The Chinese government owns all developable land in the country.  Developers need a green light from local governments to start any project - high end or low end.

But developers and local governments have balked at starting affordable housing projects because there is more profit for them in doing high-end projects like condos and luxury apartments.

Now that may change, reports AFP news agency (Agence France-Presse).

In Shanghai, China's housing authorities called the 10-million housing start mark a "political mission".

The housing ministry issued the urgent statement after state media said this week that a lack of funding and low profit margins for developers meant it "would be very difficult" for all low-income housing projects to start on time, reports AFP..

"The plan to build up to 10 million affordable homes is not only an economic mission but also a political mission. It's a promise made by the central government to the nation's people," the ministry said in a prepared statement.

"All local (governments) must start full-scale construction by the end of November."

"China's public housing program has been neglected for years as local governments eager to cash in on soaring property prices sold land to developers for high-end projects," AFP reports.

Faced with growing public anxiety over rising costs, Premier Wen Jiabao told China's legislature in March the government would ramp up a campaign to build affordable housing for the country's millions of low-income earners.

Authorities hope the social housing program will soften the impact of a slowdown in the residential property market as China tries to restrict bank lending and avoid a potentially damaging property bubble, according to AFP..

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