From 65438 to 0983, Shanghai faced outstanding housing problems, with a per capita living area of only 6 square meters. In order to explore effective ways, from 65438 to 0990, the Shanghai municipal government began to study and formulate the reform plan of Shanghai housing system.

1991February, Shanghai officially issued a housing system reform plan with the main contents of "promoting provident fund, increasing rent subsidies, buying bonds in different houses, offering preferential housing purchases, and establishing a housing authority". Among them, the establishment of housing provident fund system has become the core content of the whole housing system reform.

Provident funds are different from social security accounts such as pension and medical care. Provident fund is a long-term savings fund for employees' individual housing. All the housing provident fund paid by individuals and units enters individual accounts, which belong to individuals and are earmarked for housing. After the long-term accumulation of provident fund, people's family housing consumption ability has also been improved.