Under the Dualistic Land System, China’s Housing is divided into Big Property Rooms(BPRs) and Small Property Rooms(SPRs). SPRs are related to diverse issues such as reforming rural land, increasing farmers’ income and meeting demand for low-cost housing in the cities. And it is as important as its residents reach up to a population of 200 million. In checking why SPRs have increased, this study is to clarify its economic functions and to predict how the Chinese government will deal with the issue in the future.
The results of this study are as follows. First, SPRs are houses which are not given to members in the community but sold to individuals or companies outside. They are illegal buildings because rural houses in China must be built for the farmers in the community to live in. Second, though urbanization has increased the demand for houses, the housing supply for families in middle and low income classes has fallen short. Therefore, SPRs have grown due to such a rise in demand. Third, a poor legal system and lax supervision keep SPRs expanding illegally. However, the people’s sentiment is waiting to see a possible legalization of SPRs to stimulate such a trend. Fourth, SPRs relieve the shortage of urban housings, curb their rising prices and contribute towards increasing the value of rural houses. Meanwhile, the increase in SPRs elevates illegal profits coming from corruption, and intensifies economic damages for the stake holders. Fifth, the Chinese Government has carried out 2 policies concerning this issue. On the one hand, China bans trading SPRs, prohibits those under construction from being built and issues demolition orders on them. On the other hand, the government pursues to find locally customized solutions.