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Land Revenue and Low-Rent Housing Provision: Local Political Economy of Affordable Housing Reform in China

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Abstract

This article contributes to our understanding of the economic logic behind social policies in China. Low-rent housing provision is a welfare reform with large short-run fiscal implications. With empirical data, I show that local policy choices related to these issues are driven primarily by economic, not social, considerations. Because land for subsidized housing is allocated administratively without the land conveyance fees that constitute a major source of local government revenue, municipalities more dependent on real estate development have a stricter policy on low-rent housing allocation. This research draws on fieldwork interviews, content analysis of subsidized housing policies, and statistical analyses.

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Fig. 1

Source: Author’s data. N = 265

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Notes

  1. For an overview of these literatures, see Skocpol and Amenta (1986), and Mares and Carnes (2009).

  2. For example, the driving concern behind Singapore’s wage raise in the late 1970 s was to enhance labor quality by increasing its price to employers and to phase out labor-intensive, low-technology industries (Holliday and Wilding 2003).

  3. See for example, Solinger and Hu (2012), and Duckett (2001).

  4. Fewer than 5 percent of households in cities benefited from the government-assisted low-rent housing (Wang and Murie 2011). The ratio of economical housing area to total residential housing area decreased from 13.5% in 2003 to 3.55% in 2009 (Ping and Han 2012). Only about 550,000 low-income households benefited from subsidized housing programs between 1998 and 2006, accounting for 1 percent of the total housing units built during that period (Interview201206-1).

  5. This is often called as the policy of ying bao jing bao (应保尽保). See State Council directives on solving the housing difficulties for low-income urban residents (《国务院关于解决城市低收入家庭住房困难的若干意见》). For more information, please refer to http://www.gov.cn/zwgk/2007-08/13/content_714481.htm, accessed in December 2014.

  6. See the State Council notice on determined containment in the rapid rise in housing price in some cities(《国务院关于坚决遏制部分城市房价过快上涨的通知》). For more information, please refer to http://www.gov.cn/zhuanti/2015-06/13/content_2878981.htm, accessed in December 2014.

  7. See http://news.163.com/12/0718/15/86N5GITN00014JB5.html, accessed December 2012.

  8. See http://english.peopledaily.com.cn/90882/7688631.html, accessed December 2012.

  9. One limitation of this analysis is the neglect of policy implementation and therefore a lack of full explanation for local variation in policy outcome. That being said, local variation in the content of subsidized housing policy reveals variation in policy-making, which is an important contributor to policy outcome.

  10. Purchasers can convert “economical housing” to commercial housing and resell on the housing market after several years of residing. The big jump in the resale price promotes abuse by government official and the well-connected. Thus, the central government has, since 2007, adjusted its policy to support the construction of low-rent and public rental housing and to limit the construction of for-sale affordable houses.

  11. See http://www.panjin.gov.cn/pj/zfxx/gsgg/content/40288bd735e568c4013923e738e05b0f.html, accessed in December 2012.

  12. For a more detailed discussion on the household registration system, please see Chan (2009, 2010) and Wang (2005).

  13. See http://www.bczj.gov.cn/bzxajgc/ShowArticle.asp?ArticleID=234, accessed in December 2012.

  14. See http://news.sina.com.cn/o/2009-08-12/093316110276s.shtml, accessed in December 2012.

  15. For more information on the China Labor Bulletin project, please see http://www.clb.org.hk, accessed in December 2014.

  16. In statistical yearbooks, the information of urban housing area per capita is only available for the year of 2011. Data is collected primarily from two statistical yearbooks: China city statistical yearbooks (zhongguo chengshi tongji nianjian) and China statistical yearbook for regional economy (zhongguo quyu jingji tongji nianjian).

  17. See for example, Li and Zhou (2005), and Bo (1996).

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Acknowledgements

The author is grateful to Melanie Manion, Edward Friedman, and participants in the Chinese Political Workshop at the University of Wisconsin–Madison. All errors remain my own.

Funding

Sponsored by Shanghai Pujiang Program (Project No. 17PJC021) and MOE (Ministry of Education in China) Project of Humanities and Social Sciences (Project No. 17YJCZH278).

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Correspondence to Cai Zuo.

Appendix: Description and Measurement of Independent Variables

Appendix: Description and Measurement of Independent Variables

Investment in real estate development/GDP: the average ratio of investment in real estate development (unit: 10,000 yuan) to GDP (unit: 1000 yuan) in 2011 (Table 4).

Table 4 Descriptive statistics.

Urban GDP: the size of GDP (in 1000,000 yuan) for all districts under the prefectural-level city in 2011.

GDP growth: the growth rate of urban GDP in 2011.

Urban Population size: the size of year-end urban population (unit: 10,000 persons)

Population density: the ratio of urban population (in 10,000 persons) to land area (in 10,000 km2) in 2011.

Population growth: the growth rate of urban population in 2011.

Revenue: the size of local government budgetary revenue (unit: 100 million yuan) in 2011.

Revenue growth: the growth rate of government revenue in 2011.

Urban housing area per capita: urban housing area divided by urban population in 2011.

Number of reported labor protest: number of reported labor protest in 2011 in the CLB dataset.

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Zuo, C. Land Revenue and Low-Rent Housing Provision: Local Political Economy of Affordable Housing Reform in China. Chin. Polit. Sci. Rev. 4, 71–85 (2019). https://doi.org/10.1007/s41111-018-0114-2

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