Public rental housing ownership conversion based on housing affordability in China

According to the regulations of the Chinese government, tenants of public rental housing (PRH) can purchase their dwellings after a certain amount of time. However, since different regulations are enforced by individual local governments and the Chinese government’s policies regarding sale prices are incomplete, it is difficult to determine appropriate sale prices. In order to cope with this challenge, we suggest a hybrid framework introducing residual income approach and inverse distance weight (IDW) interpolation method to determine the sale price. Variables considered to develop the framework are housing payment ability, neighborhood house’s price, and distance from nearby residential buildings. To validate the proposed framework, the sale price of PRH in Chongqing is determined and then evaluated using cost–benefit analysis. The analysis results show that the model can present a reasonable sale price given that the net benefit is more than 0 when the sale price is 557 USD/m2.