As China’s residential real estate prices continue to rise, home ownership has become increasingly out of reach for many people. Yet rental housing is not a reliable option for most because of lack of development and other challenges. Meanwhile, many homes sit empty with owners reluctant to rent them out; the vacancy rate is at least 10% across China’s mid-sized and large cities.

These puzzling trends exemplify the fundamental economic and social dilemma in the real estate sector facing China’s policymakers, who already see a need to tamp down on speculative investments but cannot use methods that would depreciate properties of existing homeowners. Solutions necessarily start with China’s top real estate developers, but thus far few are finding enough incentives to pursue greenfield rental housing projects. (This report in Chinese.)