Differentiation of rental housing financialisation and its socio-spatial impact in China: Interplay between the state and financial sectors

Abstract

The financialisation of rental housing (FRH) has been recognised as a major force behind neighbourhood change and a threat to the right to adequate housing worldwide in/after the 2010s. However, the differentiation of FRH and its impact on housing rents across countries, cities, and neighbourhoods remain understudied. This paper fills this gap by taking China as a case. First, through the lens of state entrepreneurism, we conceptualise how the interplay between the state and financial investors caused the shift of the FRH economy from the venture capital-led asset-light business model to the state-orchestrated asset-heavy business model. Second, we examine how FRH affects local housing rent differently across business models and cities using the housing economics approaches and big data analytics. The analysis results suggest that the differentiation of the socio-spatial consequences of FRH is caused not only by financial investors' motivation to capitalise on the local population and neighbourhoods but also by the state's motivation to employ financialisation to serve its policy objectives. This paper advances the understanding of the variegated FRH under state entrepreneurialism. It also informs the policies about which neighbourhoods and cities are most in need of interventions to mitigate the negative effects (e.g., rent inflation and neighbourhood environment downgrade) brought about by FRH.