Market transition and the commodification of housing in urban China

This study examines the impact of market reforms on housing inequality in urban China, with examples from the case of Zhongshan. One of the most significant outcomes of housing reform in China is that housing has gradually been changed from a welfare provision to something approaching a commodity. Another is that housing investment is no longer constrained by rigid state budget allocations. A third outcome is that access to housing has been broadened. Despite continued inequality, more people are able to obtain housing. However, certain outcomes remain similar. First, except for a tiny fraction of housing that is being sold or bought in the open market, a disproportionate amount of housing in the reform system remains a redistributive good rather than a commodity. Second, although control has been progressively decentralized down to the work unit level, the construction of housing is determined more by institutional factors than by market forces. Third, since affordable housing at discount prices is scarce, the mechanism by which housing is distributed to workers has changed very little. The hierarchy of municipalities and work units, which is deeply embedded in Chinese society, structures access to subsidized commodified housing. These findings suggest that the current housing system is being reshaped by a complex interplay between the state and the market. Our research supports and adds to the view that the shift toward a market system in socialist societies has only partially displaced the prior institutional framework.