China's Urban Housing Development in the Shift from Redistribution to Decentralization

Abstract

This paper examines the influence of economic and housing reforms on urban housing development in China during the early transition from central state redistribution to administrative and fiscal decentralization. In socialist redistributive economies, the central state historically favored production investment at the expense of housing investment, monopolized the limited urban housing investment through administrative planning, and allocated urban housing as a heavily subsidized redistributive good. These policies contributed to serious urban housing shortages as an entrenched social problem in China. Panel regression analysis is used to model determinants of urban housing development in an early phase of economic and housing reform. The findings suggest the effects of continuing state redistribution and accelerated decentralization on urban housing development. Theoretical and policy implications are discussed.