Housing prices and urban land use efficiency

This study explores the impact of housing prices on urban land use efficiency based on data collected from 30 municipalities and provincial capitals in China over the 2007-2017 period. The empirical results show that there is a significantly negative association between the average housing price and urban land use efficiency. Furthermore, we find the weakest association when average housing prices lie in the range of 6,100 Yuan/m(2)and 14,600 Yuan/m(2). When housing prices fall outside this range, the impact of higher housing prices on land efficiency tends to be positive. One potential explanation for this phenomenon is that local governments are shortsighted in their focus on short run revenue generated from land expansion rather than on improving sustainable land management. Moreover, more limited housing price inflation promotes urban land use efficiency.