Besides the "trouble" factor (financially or otherwise), one remote reason why someone might choose to not apply, is that the permanent residency application probably goes through more scrutiny than a temporary permit, and some individuals may have things better left under cover.
Those who have succesfully applied - did you need to arrange fresh no-criminal certificates from your home countries, or were the previously granted temporary permits sufficient evidence of this being already checked?
@satii: "reason I asked about primary education is because this may be a concern for the majority of rural families (aspiring or established) that move to cities. If their children can't even attend K-12 due to hukou restrictions"
Ok, but there are no new policies (that I know) that would completely remove hukou restrictions for rural families with young children that want to move to cities - not in cities as big as Kunming.
Only group for which all hukou restrictions are required to be removed (in cities with <5m population), are fresh graduates and other educated "preferred migrants", to make their transition to urban hukou (or equal rights) easier - they don't necessarily need to buy property in city anymore. My point in housing market was limited to this segment.
@satii: "Does this politburo plan grant admissions to inner-city primary schools for children of non-hukou lessees?"
(Going off-topic, but is related to it so I'll let it fly).
The type of hukou will no longer be restrictive element (for the mentioned groups anyway) in things like school and medical admissions.
I am uncertain whether the new policy means that lack of urban hukou will not matter, or will (for example) rural graduates from the city universities be eligible to change to their own urban hukou on application.
Property ownership will continue to be a factor for education access, but more in the specific areas within city. For many rural residents, having access to urban services even beyond ring roads means more than whether they have property in vicinity of a specific subway stop or a good primary school.
If I was a rural parent somewhere in Yunnan mountains with my offspring graduating from a Kunming university, I would advice them to rent a place in Kunming while having a junior employment position here, all the while looking for better employment opportunities in higher tier cities.
Prior to this reform, I would have been under pressure to buy a property (almost any property) for my son or daughter in Kunming right away, because that would have been required for the family to move up the social ladder, and property in (and knowledge of) a first tier city would have most likely been out of my budget anyway even if my child landed a job there early on.
For the graduates that are the primary target for these reforms, the financing to buy property will come from their parents, and as far as the education of possible future grandchildren is concerned, the reforms buy both the graduates and their parents time to see how the city and its related resources develop - or whether they will even stay in Kunming.
This I believe cools the property market in this specific segment of fresh graduates with sufficient funding available from parents.
Another factor in housing structure in cities like Kunming is the central government's "2019 Urbanization Plan".
Specifically it requires cities (referring to the urban area I believe) with populations smaller than five million to remove hukou requirements on groups such as university and vocational college graduates.
In past, owning a property was such requirement, but when that gets scrapped, houses do not sell for hukou purposes anymore.
While they may continue to sell for social issues like marriages, many families may own property outside the provincial capitals already to fulfill those social obligations, and owning property in the city will not add much to that since their children will be eligible to urban hukou regardless.
In this situation those who do the long term math between buying property in city and renting, may more often choose the latter now. Perhaps use savings to upgrade family residences outside cities instead.
Because this is specifically the 2019 urbanization plan, it would not have affected observable rent prices quite yet.