(Yicai Global) Oct. 31 -- Many Chinese municipalities are relaxing housing provident fund requirements to encourage workers without a full-time employer, such as freelancers and those on short-term contracts, to buy a home and at the same time spur a cooling real estate market.

Dongguan, a manufacturing hub in southern Guangdong province, is now letting the self-employed, part-time workers, foreigners, students and those engaged in Internet-based new business formats, such as ride-hailing drivers and takeout delivery men, make housing provident fund contributions in their own names, as opposed to that of their employers, the municipal government said on Oct. 28.

The same day, Nan county in central Hunan province said it will help those working in the gig economy, which refers to on-demand, freelance and task-based employment, participate in its housing provident fund program.

China’s housing provident fund scheme is a tool used to promote house ownership. Typically, both employers and employees make monthly contributions and the accumulated funds can be used to help staff make a downpayment for a home. Participants in the provident fund are also eligible for lower mortgage rates.

But with the fast rise of China’s gig economy, there are a huge number of people, around 200 million at the last count, who no longer work for a permanent employer.

As a result, since last year, the Chinese government has been trying to provide better social security for freelancers by including them in the housing provident fund mechanism. Pilot schemes have already been rolled out in Guangzhou and Shenzhen in southern Guangdong, Suzhou and Changzhou in eastern Jiangsu province, Chengdu in southwestern Sichuan province and the municipality of Chongqing in the southwest of the country.

Chongqing said in September that eligible part-time workers can apply to use the housing provident fund for the purchase of their second homes.

Many local governments have lowered the threshold to the housing provident fund, raised the loan quota and reduced mortgage rates to boost the property market, said Zhang Bo, branch director of real estate data provider 58 Anjuke Institute. The fund makes regular housing payments more affordable to the self-employed, he added.

Editors: Dou Shicong, Kim Taylor