Housing affordability has long been on the agenda of China’s policymakers. Imperfections in the housing system and growing disparities in income and wealth have been central to the problem of affordable housing. Housing reforms in China led to the creation of a market-oriented housing system but also increased economic and social stratification. This article considers the effect of public housing privatization on the housing affordability problem in Beijing. Using a residual income’ approach, we draw on a household survey to assess affordability for households according to occupants’ family structures, educational attainments, and employment status. The implications for policies designed to improve housing affordability are discussed.