A district in the southern Chinese megacity of Guangzhou is offering households who purchase a home in the area free access to the local public school system, as Chinese authorities step up attempts to revive the country’s faltering housing market.

China controls its citizens’ access to public services using a household registration — or hukou — system. Under this policy, a person can only send their children to public schools in the place where they are officially registered.

Despite millions of workers moving into China’s largest cities in recent decades, local governments have often been reluctant to allow these migrants to transfer their hukou. This has forced many migrants to leave children behind in their hometowns to attend school.

But Huadu District in Guangzhou’s northern suburbs now plans to waive some of these restrictions for any non-local who buys a home in the area. On Tuesday, the district government announced that homebuyers would be entitled to send their children to local public schools and kindergartens.

Chinese authorities have been offering ever greater incentives to homebuyers in recent months in an attempt to stimulate the property market, which has taken a severe hit since 2020.

Many local governments have already relaxed down payment rules and restrictions on purchases of second homes to spur demand, but these have had limited effect. Now, some authorities are going further by leveraging rights and benefits associated with the hukou system.

Several localities have announced plans to give homebuyers access to certain hukou benefits this year, including Suzhou in eastern China’s Jiangsu province. Other cities, such as the provincial capital Nanjing, have even begun handing out residency permits to people who rent a home in the area.

But Huadu District’s move is noteworthy because it’s the first time a local authority in one of China’s so-called “first-tier cities” has taken such a step. Megacities such as Beijing, Shanghai, and Guangzhou have traditionally maintained strict hukou policies, with migrants applying for permanent residency being assessed using a points-based system that takes into account their education level, profession, and social insurance payments, among other factors.

The measure — which Huadu is referring to as “quasi-hukou status” — was part of a wider stimulus package announced by the district, which also includes a property trade-in program.

Though there are signs that property sales in Guangzhou are recovering — with sales up 27% year over year in July — there is still a major issue with excessive housing stock. As of the end of July, there was 1.49 million square meters of unsold newly constructed housing in Huadu District alone, according to property research firm China Index Academy.

Huadu’s new incentive scheme is likely to stimulate a “certain” level of demand for housing, Chen Xueqiang, a senior researcher at China Index Academy, told domestic media. He added that he expected other localities experiencing problems with housing oversupply to introduce similar measures.

The real estate crisis is not the only reason that China has been relaxing the hukou system in recent years. The country also hopes to stimulate economic growth by allowing more people to move into cities and bring their families with them.

In 2022, the central government scrapped hukou restrictions in all cities with a population under 3 million, and encouraged megacities of over 5 million people to remove their caps on the annual number of migrants granted hukou rights.

The government reiterated this call last month, with officials pledging to better protect the rights of migrant workers’ children to a good education.

(Header image: VCG)