Research on the economic sustainability of affordable rental housing——Based on autoregressive integrated moving average and real option valuation model

DOI

10.2991/978-2-38476-257-6_17How to use a DOI?

Keywords

Affordable rental housing; Economic sustainability; Lease before sale; Real option; ARIMA model

Abstract

Affordable rental housing constitutes a crucial element of China’s housing security system. However, its construction imposes significant financial pressure on local governments. In the new phase of development, it is imperative to strike a balance between the needs of people’s livelihood and the government’s fiscal capacity. To achieve this objective, this paper proposes the hypothesis of renting before selling as a means of enhancing the economic sustainability of affordable rental housing. To comprehensively and accurately assess the economic sustainability of the project, we construct a real option valuation model to explore the option premium in the face of uncertainty and management flexibility, thereby expanding the value composition of the project. We used a rental project in Nanjing as a case study for empirical analysis. Our findings show that the economic sustainability of affordable rental housing has improved significantly under the “renting first and selling later” approach, and that the created real option model can comprehensively evaluate the project value. Finally, by calculating the project value under different starting years and sales ratios, further research was conducted on how to balance the economic sustainability and guarantee effectiveness of housing.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Pengchao Wang
AU  - Xianghua Wu
PY  - 2024
DA  - 2024/05/27
TI  - Research on the economic sustainability of affordable rental housing——Based on autoregressive integrated moving average and real option valuation model
BT  - Proceedings of the 2024 International Conference on Applied Economics, Management Science and Social Development (AEMSS 2024)
PB  - Atlantis Press
SP  - 128
EP  - 141
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-2-38476-257-6_17
DO  - 10.2991/978-2-38476-257-6_17
ID  - Wang2024
ER  -