Study on China's Economical & Suitable House

China's economical & suitable house has been issued for more than ten years. It has solved the housing problem of Some low-and-medium income earners but there are still a lot of problems. This paper, by reviewing the development and basic characteristics of economical & suitable house, makes an empirical analysis on the "diseconomy" and "unsuitability" of present economical & suitable house policy; makes a profound analysis on the theoretical root-cause of these problems and suggests that "market failure" and "government failure" are the primary reasons; probes into the solutions for the development of economical & suitable house, demonstrates the possibility of "further improvement" and "gradual abolishment"; and at last, brings forward a long-term policy proposal of government's "return of responsibility".