Housing Inequality in Chinese Cities

Youqin Huang, Si-ming Li, Youqin Huang, Si-ming Li

• Publisher: Routledge
• Year: 2014
• Print ISBN:
  9781138069220
• eBook ISBN:
  9781135050191
• Topic: Social Sciences
• Subtopic: Ethnic Studies
• Index: Social Sciences

In recent decades, Chinese cities have experienced profound social, economic and spatial transformations. In particular, Chinese cities have witnessed the largest housing boom in history and unprecedented housing privatization. China now is a country of homeowners, with more than 70 per cent of urban residents owning homes, higher than many developed countries.

This book shows how China's spectacular housing success is not shared by all social groups, with rapidly rising housing inequality, and residential segregation increasingly prevalent in previously homogeneous Chinese cities. It focuses on the two extremes of the residential landscape, and reveals the stark contrast between low-income households who live in shacks in so-called 'urban villages' and the nouveaux riches who live in exclusive gated villa communities. Over four parts, the contributors look at the degree to which inequality affects Chinese cities, and the extent of residential differentiation; housing for the urban poor, and in particular, housing for migrants from rural China; housing for the rapidly expanding Chinese middle class and the new rich; and finally, governance in residential neighbourhoods.

Housing Inequality in Chinese Cities presents theoretically informed and empirically grounded research into the polarized residential landscape in Chinese cities, and as such will be of great interest to students and scholars of Chinese studies, urban geography, urban sociology, and urban studies.

Part I

Housing inequality and residential differentiation

1 Housing inequality, residential differentiation, and social stratification

Chinese cities in the early twenty-first century

Youqin Huang and Si-ming Li

Introduction

The 2008 global financial and housing crisis has brought housing to the forefront of social and economic debates again. Meanwhile, rising social inequality in the neoliberal era has caused much anger from the public, which was epitomized by the global spread of the “Occupy Wall Street” movement. Housing inequality, a long-held central concern of socio-spatial studies, has re-energized scholars and policy makers who are determined to understand “the housing question” in the new era. It is in this global context that this book focuses on housing inequality in China, where profound social, economic and spatial transformations are taking place at unprecedented scales and speeds under privatization, marketization and neo-liberalization, notwithstanding the continuing domination of the (Chinese Communist) Party-State in charting the developmental trajectories at all levels of territorial governance.

For decades, China was known for its welfare-oriented housing system under which public rental housing was allocated among urban residents. (In the countryside, there is a different housing system, where villagers built their own housing on collectively owned land.) While housing shortage and residential crowding were prevalent in Chinese cities, relative homogeneity in housing conditions and neighborhood compositions set China apart from other developing countries where appalling housing inequality underpinned by prevalence of slums and widespread squatting seems to be inevitable. Yet, China today is a very different country. On the one hand, China has experienced spectacular success in housing development in recent decades. In the first decade of the twenty-first century, the number of housing units built in China was roughly twice the total stock of housing units currently in Spain or the UK, or about the same as Japan’s current total stock (Economist Intelligence Unit, 2011). With the unprecedented housing boom, Chinese households are enjoying much better and larger housing than before. Per capita residential floor space in Chinese cities increased from 4 m² in 1980s to 31 m² in 2010. While it is still far below the level in the US, it is on par with many developed countries such as Japan and countries in Europe. China is also becoming a nation of homeowners, with 75 per cent of urban households (85 per cent of all households nationwide) owning their flats/houses in 2010, compared to only 20 per cent in 1980. Moreover, more than 15 per cent of urban households owned multiple homes in 2007 (Huang and Yi, 2011). Dominated by public rental housing only three decades ago, China now has a higher rate of homeownership than many developed countries. For a significant percentage of Chinese nationals, the “Chinese Dream” of access to decent housing under owner occupation is now realized.

However, at the same time millions of urban poor continue to be denied basic housing. Many have to live in boxy rooms in crumble shacks and low-rises in dusty suburban villages and tiny dark dorms in bomb shelters and basements under glossy apartment buildings (Wu, 2002; Wu, 2004; Solinger, 1999; Ma and Xiang, 1998; Huang and Yi, 2013). Reminiscent of worker insects in a colony and mice in underground cellars, they are called “ant tribe” (yizu) and “mouse tribe” (shuzu), respectively. The Chinese Dream is far beyond their imagination and reach. Meanwhile, the new nouveaux riches live in exclusive gated villa communities that are on par with upscale gated communities in the West (Giroir, 2006; Huang, 2005; Wu, 2005). The Chinese urban residential landscape, alongside the social, economic and political landscapes, is becoming increasingly complex and polarized and challenging our perception and understanding of Chinese cities.

Housing reform and housing inequality

As an important component of China’s overall institutional transition, housing reform in Chinese cities was launched nationwide in 1988 after experiments in several cities. Despite its slow start, the housing reform has profoundly changed the way housing is produced and consumed in urban areas. First of all, the existing public rental housing stock was privatized. Sitting tenants were given the option of either purchasing their dwellings at heavily subsidized prices, depending on their status in the respective work units such as seniority, years of service and job rank, or paying increasingly higher rents which would eventually reach market levels. The great majority of existing public housing was thus sold, especially after the 1998 housing reform under which sitting tenants were given the last chance to buy at heavy discounts. This privatization of public housing contributes significantly to the high rate of homeownership in Chinese cities. More than 40 per cent of homeowners in 2000 and a quarter of homeowners in 2010 in Chinese cities owned previously public housing, often known as “reform housing” (fang gai fang) (Yi and Huang, 2012). At first, reform housing was conferred only partial property rights and reselling was subject to strict restrictions. But such restrictions were gradually lifted in the early 2000s (Li and Yi, 2007b); as such, the bulk of reform housing has since been commodified.

Second, private developers were allowed to invest in residential real estate. Massive private housing, called “commodity housing” (shang ping fang), has been developed with both domestic and foreign investment. While some commodity housing is for rent, most is for sale due to higher profit margins and shorter investment cycle in the owned sector. Catered to different social strata, there is a wide range of commodity housing, with high-rise apartments, multi-story townhouses, and luxurious villas. At the lower end is subsidized, price-controlled commodity housing called “economic and comfortable housing” (ECH, jing ji shi yong fang), also known as “affordable housing” and “economic and comfortable housing” in the literature, which was desig-nated as the main housing type for low- and middle-income urban households in 1998, but was recently redefined as low-income housing in 2007 (Huang, 2012). Local municipal governments usually provide cheap land to developers and set the prices of the housing units built, while qualified residents purchase the housing units with partial property rights that constrain them from profiting from their housing.

The privatization and commodification drive has been accompanied by promotion of homeownership. Both the existing public housing and newly developed private housing is predominately for sale. The government also established a Housing Provident Fund (HPF), which mandated employees to save part of his/her salary, matched by employer’s contribution, for future home purchase. Contributors can take loans from the HPF with lower interest rates (Li and Yi, 2007a). Commercial mortgage is also available, although until recently its role has been relatively small, probably reflective of the high saving rates and the high incidence of inter-generational wealth transfer in China (Li and Yi, 2007a). The State Council (1998) officially ended public provision of housing in 1998, and in 2003 “ordinary commodity housing” was defined as the main housing type for urban households (State Council, 2003). Since then China has entered a period of accelerated housing marketization. With massive investment by property developers, private housing has become the main housing source; at the same time housing prices have skyrocketed. According to the housing price-income ratio, China is ranked in the category of “severely unaffordable” (Man et al., 2011). Housing affordability has become the topmost concerns among low- and middle-income households.

Third, concomitant with the weakening of t...

Table of contents

• Cover Page
• Half Title page
• Series Page
• Title Page
• Copyright Page
• Contents
• Figures
• Tables
• List of Contributors
• I Housing inequality and residential differentiation
• II Housing for migrants and the urban poor
• III Housing for the middle class and the rich
• IV Neighborhood governance under housing commodification
• Index