Government financial subsidies in the influence of public housing under the PPP financing model

Abstract

While China's develop into a social benefit society,affordable housing problem of large salary population become more attention to the authorities. In order to solve this problem,the government has issued a series of policy to expand the construction of economically affordable housing. However, the movement has been blocked because of construction fund shortage in many cities. Academic researchers suggest that introducing PPP models is one of the conventional ways for obtaining alternative finance to develop public housing. The purpose of this study is to analyze the relationship between the governmental financial subsidies and various influencing factors of public housing based on PPP model. This article first provides the favorable conditions that the governments adopt PPP model for the construction of public housing. Benefit models of the public and private sector's was developed based on economics theories. They were analyzed by game theory to find out how governmental financial subsidies influence the welfare of the private and public sectors. Research results demonstrate the government financial subsidies can not only increase the benefit of the private sector, but also increase the benefit of the government through providing extra amount of public housing. It is hoped that this study can provide some useful information for the governments in considering PPP model to develop public facilities. © 2014 Springer-Verlag Berlin Heidelberg.