Housing Markets, Government Behaviors, and Housing Choice: A Case Study of Three Cities in China

Abstract

Housing reform in urban China has introduced market mechanisms into a previously welfare-oriented housing system. Although microlevel factors such as household characteristics begin to shape housing behavior in urban China as is the case in the West, macrolevel constraints and opportunities defined by not only housing stocks and housing markets but also local government behaviors continue to be crucial. By studying housing choice in Beijing, Chongqing, and Jiangyin, I find that local governments in different cities behave differently in reforming the housing system, which in turn create different housing stocks and housing markets and thus lead to different patterns of housing behavior. A housing stock dominated by public housing, a tight housing market, and a conservative local government all encourage households to choose public housing and rental, as is the case in Beijing, while a diverse housing stock with affordable housing prices, and an aggressive local government often encourage households to choose private housing and homeownership, indicated by the case of Jiangyin.