How the institutional change in urban redevelopment affects the duration of land redevelopment approval in China?

Abstract

Urban redevelopment is a crucial prescription in response to the problems associated with limited land, urban decay, and fading buildings, especially for China’s megacities. Given that state-dominated urban redevelopment is slow and limited, the Chinese government has proposed a pioneering market-oriented approach to drive urban redevelopment in Shenzhen. This study seeks to examine the impacts of market-oriented institutional arrangements on land redevelopment approval duration (LRAD) in China from the perspective of public and private interests. Various institutional arrangements are observed under the institutional change of urban redevelopment in Shenzhen, and they are differed by the nature of the applicants, including the original property owners (old factory owner (OFO)), their representatives (e.g., village committees (VC) and the government agency involved in redevelopment (URB)), and developers (DP, second-hand property owner). A number of hypotheses are developed, and empirical tests are conducted to verify or dismiss our hypotheses with the data in Shenzhen. The empirical findings indicate that (1) The LRAD is the shortest when the applicant is the OFO and the longest if the applicant is the local government officials such as URB. (2) Compared with the URB, the LRAD is shorter if the VC is the applicant. (3) The LRAD is longer for the projects with a larger redevelopment scale and the projects with more dedicated public facilities. The findings shed new insights into the design and practical effects of market-oriented institutional arrangements on the progress performance of urban redevelopment, which can give the local government a timely reminder that they should examine and approve urban redevelopment schemes in a soundly planned and socially sustainable fashion.