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Mismatches between the Supply and Demand of Public Rental Housing in Chinese Cities

Author

Listed:
  • Ying Cao

    (Research Institute of Economics and Management, Southwestern University of Finance and Economics, Chengdu 610074, China)

  • Daichun Yi

    (Research Institute of Economics and Management, Southwestern University of Finance and Economics, Chengdu 610074, China)

  • Youqin Huang

    (Department of Geography and Planning, University at Albany, State University of New York, Albany, NY 12222, USA)

  • Yang Zhu

    (School of Information Science and Technology, Southwest Jiaotong University, Chengdu 611756, China)

Abstract

While many countries have witnessed the retreat of the state from social housing under neoliberalism, the Chinese government has taken the opposite trajectory, significantly expanding its involvement in public rental housing (PRH) over the past decade through substantial investments. However, the effectiveness of the PRH program has come under scrutiny due to its inability to meet the demand for housing units while grappling with a substantial vacancy rate. This study aims to unravel this paradox by utilizing a unique city-level database that encompasses information on public rental housing stock, land supply, waiting time, and allocation practices. The data suggest that there is a structural mismatch between supply and demand for PRH in China, with both high and low vacancy rates in different cities, and even high vacancy and high allocation rates co-existing in one city. The results of estimating the OLS regression model of PRH supply and demand indicate that the actual supply fails to align with the policy objectives and the actual housing demand. Rather, they are more a result of the power relationship between the central and local governments, and cities with high fiscal autonomy provide fewer PRH. Furthermore, local governments fail to set eligibility criteria in response to housing supply, demand, and allocation, further exacerbating the mismatch. This paper provides policy recommendations that aim to enhance the sustainability and effectiveness of the PRH program, contributing to more equitable urban development.

Suggested Citation

  • Ying Cao & Daichun Yi & Youqin Huang & Yang Zhu, 2024. "Mismatches between the Supply and Demand of Public Rental Housing in Chinese Cities," Sustainability, MDPI, vol. 16(19), pages 1-20, September.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:19:p:8358-:d:1486141
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    References listed on IDEAS

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    1. Angelica Salvi del Pero & Willem Adema & Valeria Ferraro & Valérie Frey, 2016. "Policies to promote access to good-quality affordable housing in OECD countries," OECD Social, Employment and Migration Working Papers 176, OECD Publishing.
    2. Xiaokuai Shao & Yujin Cao & Yangchuan Teng & Jidong Chen & Liutang Gong, 2022. "The Consumption‐Stimulating Effect of Public Rental Housing in China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(1), pages 106-135, January.
    3. Bernard Fingleton & Franz Fuerst & Nikodem Szumilo, 2019. "Housing affordability: Is new local supply the key?," Environment and Planning A, , vol. 51(1), pages 25-50, February.
    4. Bernard Fingleton, 2008. "Housing Supply, Housing Demand, and Affordability," Urban Studies, Urban Studies Journal Limited, vol. 45(8), pages 1545-1563, July.
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