Multiple home ownership in Chinese cities: An institutional and cultural perspective (2024)

This paper studies the impact of household indebtedness on the transmission of monetary policy to consumption using the Chinese household-level survey data. We employ a panel smooth transition regression model to investigate the non-linear role of indebtedness. We find that housing-related indebtedness weakens the monetary policy transmission, and this effect is non-linear as there is a much larger counteraction of consumption in response to monetary policy shocks when household indebtedness increases from a low level rather than from a high level. Moreover, the weakened monetary policy transmission from indebtedness is stronger in urban households than in rural households. This can be explained by the investment good characteristic of real estate in China.

Nearly four decades of housing reforms have transformed China into a homeowner society with homeownership rates exceeding 90% in 2019. However, exactly which household member owns the property has seldom been studied. Using the 2017 China Household Financial Survey, this study examines the distribution of homeownership between the husband and wife, which is of great importance for understanding gender dynamics and intra-household inequality in urban China. Employing multi-level multinomial regressions, the results show that husbands generally have an absolute advantage of being the owners, which is stronger among the younger cohort. However, a wife's higher socioeconomic status, indicated by education, occupation, Chinese Communist Party membership, or hukou status, significantly increases her propensity to be stated as the deed owner. Furthermore, the gender disparity in homeownership between the husband and wife narrows in developed cities. We argue that the overall male dominance in household homeownership is structured and strengthened by the promotion of homeownership as a social norm, trapping both men and women in the reproduction of gender inequality.

Talent workers are becoming a critical factor in the urbanization of China. Government programs encourage the attraction of these skilled and university educated workers by providing subsidized housing. Talent workers are responding to these incentives, yet many are not settling in the urban communities that woo them. This micro-scale case study of talent worker housing in Shenzhen explores some aspects of the lived experience of these “floating” talent workers. As a well-paid and upwardly mobile component of the floating population, talent workers are typically co-resident with their spouses and dependent children. However, a third generation is commonly present in these urban extended family households. Parents and in-laws of talent workers provide grandchild care and as such, they exemplify the “drifting elderly,” a newly identified phenomenon in China's cities. Interview evidence shows that about one half of young talent workers and virtually all of the drifting elderly constitute a new age floating population, challenging traditional conceptions of the floating population as an urban underclass. Despite the provision of subsidized housing intended to foster the retention of talent workers in Shenzhen, many are not committed to staying in their community and have no interest in attaining local urban hukou status.

Market sentiment has been playing a important role in Chinese housing market in last two decades, while has not received enough attentions in literature. With this in mind, this paper first establishes sentiment index depicting housing market sentiment in China. Then, the paper uses an endogenous switching regression model to investigate how housing price affects joint determination of housing choice and non-housing expenditure, with regard to the moderating role of market sentiment. This paper finds that the rising housing prices is negatively related to the probability of being an owner and positively associated with consumption. However, the counter-factual analysis the choice of being a owner has a negative effect on consumption over all and such an effect can be weakened by having a mortgage. A higher sentiment can improve the likelihood of home ownership and reduces non-housing consumption. This study helps households to optimize the wealth allocation and governments in their housing policy strategies and developers in their property development.

For the real estate market, housing prices as well as housing vacancy rates (HVRs) are key indicators. However, for the latter indicator, there is no official data set for Chinese cities. Collecting HVR in a traditional way requires enormous personnel efforts and is therefore very expensive and time consuming. In this study, we introduce a framework for estimating the HVR at high spatial resolution (i.e. at block level) for residential areas based on several emerging data sources. The developed framework consists of three steps: 1) we extract residential blocks and map detailed housing data. These data are applied to estimate the population capacity; 2) we spatially distribute the actual census population into residential blocks as a function of night light emission intensity; 3) we estimate the HVR for each residential block according to the gap between its actual distributed population and the estimated population capacity. We find the following main results for our test case of Guiyang in China: 1) the average HVR in the urban area of Guiyang is estimated at 25%; 2) with rising distance to the city center the HVR is increasing; 3) the buildings that have been built more recently feature higher HVRs. We check the plausibility of our approach using water consumption data as proxy information for residency. These checks reveal high accuracies. With this suggested workflow relying on open data sources and the achieved plausibility, the developed framework for HVR estimation has the potential to be applied on a large scale.

Cities, Volume 97, 2020, Article 102485

Formal or de jure property rights are deemed conditional for development in a neo-liberal reading. Paradoxically, real estate underwent explosive development even though China’s rights for housing are informal, ambiguous, and insecure. This article intends to explain this contradiction by examining how Chinese urban residents perceive the credibility of housing rights from three perspectives, i.e., ownership, land lease, and the 70-year lease term. The study is based on a survey (n=1207) demonstrating: i) half of the respondents are indifferent about formalization policies; ii) 92 percent have never experienced housing-related conflicts, however, of those reporting conflict, close to half indicated demolition as the source; iii) housing ownership is considered important for most while the land use (or lease) permit is considerably less relevant, and the lease term is considered insignificant. Three conclusions can be drawn. First, urban residents have no preference for a “full bundle” of formal rights. Second, although low conflict indicates credibility of the current rights structure, there are risks to social stability due to expropriation. Three, credibility hinges on combinations of (in)formality and (in)security rather than being a direct function of formalization. Findings emphasize a need to rethink the property rights theory in terms of credibility, conflict, and time.

Cities, Volume 96, 2020, Article 102404

This study investigates the causal relationship between homeownership and subjective well-being based on household-level panel data collected from the China Household Finance Survey (CHFS) in 2011 and 2013. The extent to which homeownership contributes to the changes in subjective well-being is estimated, focusing on the heterogeneous effects across socioeconomic and demographic groups. Evidence from the identification strategies indicates that homeownership has a positive impact on subjective well-being. Moreover, the results are robust to different specifications and unaffected by the financial constraints faced by new homeowners. Our findings have useful implications for policymakers to stimulate homeownership rates to promote subjective well-being.

Cities, Volume 105, 2020, Article 102619

The relationship between transnational housing investment and homeownership status in destinations has received considerable attention. However, the direct causal link between both activities remains scant. This study introduces a new conceptual and empirical framework, quasi-transnationalism and integration nexus, to discuss the causal effects of hometown housing investment on the homeownership of rural migrants in urban destinations. The research also applies a national representative data in China, the National Migrants Population Dynamic Monitoring Survey (NMPDMS), to explore such causal effect. The results show that hometown housing investment has a significantly negative effect on homeownership in urban destinations, whereas the substitution effect of hometown housing investment exceeds the complementary. The conclusions are consistent when IV-LPM regression is applied to correct the potential endogeneity of migrants' hometown housing investment. There are some notable differentials across life cycle groups and origin-destination groups, those are, hometown housing investment produces a larger negative effect for the old generation than the new generation, while it also plays a more important role for migrants who moved within the same regions, but the effect on the migrants from Central and Western China to East China is the weakest among the four origin-destination groups. The possible mechanism is that hometown housing investment influences the housing tenure choice through affecting the return migration plan and housing purchase intent in urban destinations.

Cities, Volume 87, 2019, pp. 153-165

Public rental housing (PRH) exits exert a profound influence on turnover rates, which further impact the public housing principles of fairness and efficiency. However, very few studies have attempted to investigate the tenant's barriers to exit PRH units in Chinese studies. In this paper, using data drawn from a randomly sampled survey of tenants in Beijing during the March 2017, we employ structural equation modeling (SEM) to examine the factors influencing tenant's barriers to exit. We find that housing availability is the most influential factor in determining the tenant's barriers to leave PRH, and residential satisfaction is also considered as a motivation against PRH exits. In addition, residential satisfaction transfers the impact of tenant's perceptions of housing and neighborhood to exit barriers. Especially, the effects of housing availability on exit barriers are higher in some groups, such as elderly, high income households, large-sized families and respondents with long spell of residence. Any program aimed at getting tenants to leave public housing sector needs to reduce their barriers to access to the private rental market and take into consideration the various characteristics of the tenants.

Habitat International, Volume 50, 2015, pp. 149-159

Rural–urban migrants are the major group who will boost the transformation of China's urbanization and reform of the household registration system. Their aspirations of living in the immigration area are an important premise of institutional change. The housing prices within the immigration areas are an important factor that can influence the rural–urban migrants' settlement decision. To what degree does the housing price influence the settlement decision? Do regional differences exist in the influence of house price? These issues need to be analyzed and verified in a theoretical and empirical ways. By introducing the variables of the housing price into the life-cycle theory function, we found that housing price influences the settlement decision through the welfare dissipation effect and the expected wealth effect. On the basis of welfare dissipation effect, hypothesis 1, we can come to the conclusion that high housing price will play a negative role in the process of settlement decision formation. Through expected wealth effect, hypothesis 2, we estimate that a housing price rise will promote the aspiration of living in the immigration area to some extent inversely. On this hypothesis basis, using the panel data model of China's 31 provinces and cities for the period 1995–2012, we found that, at the national level, the influence of housing price to the settlement decision is not significant. From the view of regional differences, the influence is negative in the eastern area, indicating that the welfare dissipation effect is greater than the expected wealth effect, in line with the hypothesis 1. The increase of housing prices will promote the settlement decision in the central area, this phenomena explains that the expected wealth effect is greater than the welfare dissipation effect, in line with the hypothesis 2. In the western area, the influence is non-significant.

Journal of Comparative Economics, Volume 46, Issue 1, 2018, pp. 212-247

What explains the rapidly increasing housing investment demand in China? To address this question, we develop an analytical framework featuring how expected capital gains impact households' housing investment decisions when subject to financial constraints. Housing demand in China takes place not only through households' owning multiple houses, but also through their owning a larger primary living residence if they are constrained from buying multiple houses. We show that households are more likely to own multiple houses when expecting higher capital gains. As expected capital gain increases, the primary housing demand of those households who are constrained from owning multiple houses increases, while those owing multiple housing units invest in extra ones instead of improving primary housing. Our empirical findings, based on 2010 and 2011 household survey data, are consistent with our theoretical predictions. We also find that the marginal effect of expected capital gains is higher for wealthier households. This links the booming housing market to widening income inequality which is a typical growth pain in a developing country like China. As an extension, we apply the analysis to derive implications of the institutional features (such as purchasing restriction policy and the existence of subsidized housing) for China’s housing markets.