Yao Baohuan, 48, has lived with her husband and daughter, a college student, in a new 50-square-meter apartment in Langfang, Hebei province, since June last year, without paying rent because of local government subsidies.

"I have had heart disease since I was young, which means I cannot work outside the home. So we live on the small salary of my husband and basic living allowances," she said. They used to live in a shabby house far away from downtown Langfang, she added.

Families like Yao's will be able to get similar apartments when the affordable housing complex in the city is completed.

Low-income families can also get subsidized housing in many other cities, such as Beijing, where they otherwise would not be able to afford the high property prices.

Tian Shikui and his wife, both in their 70s, moved into a public rental unit in Beijing's Shijingshan district in February. Their rent is 25 percent lower than that in neighboring communities, and in three years, their low rent will remain stable, regardless of any rapid rise in rent in the commercial units around them. In addition, they will receive a subsidy from the government.

China plans to build more than 36 million affordable houses to cover 20 percent of its urban population - mainly low-income families - by the end of the 12th Five-Year Plan period (2011-15).

In 2011, more than 10 million units were started in China, and about 4.32 million were finished. This year will see another 7 million units begin construction and 5 million will be completed, according to the Ministry of Housing and Urban-Rural Development.

"As more and more subsidized projects become ready for application in these two years, the key issue will be how to distribute them efficiently and fairly," said Zhang Xueqin, deputy director of the ministry's Department of Public Housing Policy.

A regulation concerning the government-subsidized housing projects may be passed to guarantee the fair distribution of subsidized units for low-income families in urban areas, as well as the quality of these projects.

"A draft of the regulation was sent to the State Council earlier this year and has been put on the waiting list for further research" Zhang said. "It may get approval this year."

The regulation will provide principles on the whole process, such as applying for these units and reasons disqualifying people who fail to meet the requirements.

Under the current distribution principles, different types of affordable housing are provided to people in different economic situations.

People living on basic living allowances will pay a low rent or nothing for government-subsidized houses. People who cannot buy a commercial house temporarily, such as new graduates or young couples, can live in public rental units with lower rent. There are also subsidized commercial houses for other low-income families who are in a better situation to buy.

About 26 million low-income urban families have lived in affordable units or received subsidies for renting houses up to the end of 2010, according to the ministry.

If the families earn higher incomes after living in affordable housing for several years later, and are no longer qualified for the housing, they will face a rent rise, if they want to stay, according to the current national regulation.

"Instead of rigid implementation of rules to expel them from the flats, we'd prefer to use such economic measures," said Zhang.

"Thorough reviews on the economic situation of applicants and cooperation among different departments help the government make distribution fair and transparent to the public," he said. "But there are some cases involving people who cheat to get subsidized housing illegally."

More than 5,300 families applying for such apartments have been disqualified in Beijing and 300 of them were forced to move out. And in Hebei, about 3,000 families were deprived of the subsidized housing system in 2011.

"Grassroots residential committees are the main force which reviews the applicants now, because they have a close relationship with such families," said Su Yunshan, deputy director of the Department of Housing and Urban-rural Development of Hebei province. "We can get relevant information from other departments, such as the civil affairs department, but it's not enough."

He said some people may hide part of their property, such as vehicles or investment in small business.

"Without cooperation with the supervision departments, such as the Administration of Industry and Commerce, it's difficult for us to verify that part. We plan to share the applicants' information with more departments, to reduce cheating."

But he could not give the timetable for when such an expanded network will be established, because "cooperation among many departments is not that easy to achieve".

The Ministry of Housing and Urban-Rural Development said establishing such a verification network covering the whole country is on its agenda this year.

On the other hand, Su said, punishment for cheating is not harsh enough, making people unafraid to violate the regulations.

"They are forbidden to apply for affordable housing for five years, if they are found cheating."

People who are found cheating in their applications for public rental flats in Hong Kong face a fine or court charge. "We should learn from it," he said.

Moreover, the quality of subsidized housing is always a key issue. Scandals regarding the poor quality of subsidized housing projects occurred many times last year, especially when local governments were pushed to meet the goal of delivering large-scale subsidized housing.

In February, the State Council organized five groups of experts to monitor the distribution and quality of subsidized houses.

"They won't come to our province this time, but we have conducted frequent self- inspections on quality since 2011," said Zhang Jianming, deputy director of the construction quality supervision station in Hebei.

In 2011, the government found that 35 affordable housing projects in Hebei had violated regulations. Fines totaling 835,000 yuan ($132,400) were issued, according to a report from the station released on Feb 24.

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