There are usually three subsidy ways in housing security system，namely, physical subsidy, monetary subsidy and combination of both. Theoretical model shows physical subsidy limits people’s choices, weakens the flexibility to adapt to the housing security system, increases government administrative costs, increases housing vacancy, and is not conducive to the introduction of market competition mechanism and inefficient use of resources. In contrast, currency subsidies have stronger efficiency features, can effectively solve the difficulty of screening, monitoring and management, significantly save government administrative costs in direct physical distribution, meanwhile the negative effects of interference in market competition mechanism do not exist,and are in favor of enhancing the effectiveness of the use of public funds.