Housing Restructuring in Nanjing, China

Introduction:

In less than 20 years the housing system in China has been transformed from one based predominantly on the public provision of housing to a market-based system, to the extent that more than 80% of households in urban China are homeowners. The sheer scale of this change, compressed into such a short time, is impressive. However, the move to a commodified system has not been problem free. Indeed, the twin issues of displacement and, more generally, affordability are coming increasingly to the fore, resulting in significant policy shifts since 2010 toward the promotion of low-end housing for lower middle- and low-income groups.

This article examines these issues through a detailed analysis of the implementation of the indemnificatory housing policy in Nanjing, and highlights the complex and often contradictory practice, this article adopts a case study approach to argue that even after the restructuring by the Chinese state of housing provision in 2010, accessibility to adequate and affordable housing remains a major challenge. In the context of the economic downturn, urban neo liberalization has intensified in China resulting in changing housing tenure, inner city gentrification, direct displacement, and exclusionary displacement. This has been driven by the state actively using housing to stimulate the real estate market and, in the process, creating new urban inequalities. This approach to urban governance, which might be conceptualized as a crisis of crisis management, is the result of a complex relationship between economic crises, neoliberal reforms, housing inequalities, and the activities of the Chinese national/local states in the housing market.

Housing Reform and Provision in Postreform Urban China:

There is now a vast literature on the housing system in China, and this section delineates some of its principal developments to frame the detailed analysis of Nanjing. Since the start of China’s economic reform in the 1970s, there has been a substantial transformation in the housing system, from one where housing was predominantly financed by the public sector to a system where commodified private housing prevails. This movement from a state-centered to a private system comprised a number of different but interrelated elements. One of the first policies was a massive sell-off of existing public-owned housing to sitting tenants at a discount – the equivalent of the “right-to-buy” scheme in the UK on a gigantic scale. Second, the Chinese authorities have moved to develop a private housing market since the late 1980s, with commercial developers building housing for sale, and a mortgage market emerging in the 2000s.

Constructing a New Housing Market in Nanjing:

Since 2010/2011, central government policy in China has focused on the provision of housing targeted at lower middle- to low-income groups. In Nanjing, the implementation of this central government policy resulted in construction on a massive scale, producing enormous quantities of new housing.

Indemnificatory Housing Provision in Nanjing:

Previous research on low-end or nonmarket housing in China has used a variety of different terminologies, including public housing, low-income housing and affordable housing at the national level. Since 2010, many media reports have equated state-promoted low end housing development in China with, for example, traditional British council housing, or interpreted it as a return to socialist-style housing provision. However, our discussion will illustrate that the situation is much more complex; for example, in Nanjing, 70% of ownership-oriented affordable housing has been distributed to urban and rural displaces, not all of whom have genuine housing affordability issues.

Ownership-Oriented Affordable Housing:

The composition of ownership-oriented affordable housing in China can vary from city to city. In the case of Nanjing, it is comprised of affordable housing, price-capped housing, resettlement housing, and low- cum medium-price housing. Among these, affordable housing has the longest history and is widespread in Chinese cities, aiming to facilitate homeownership for those with low incomes, and based on the principles of cost recovery and low profit margins.

Low-Rent Housing and Public Rental Housing:

Within the indemnificatory housing system, public housing broadly falls into two categories: public rental and low-rent. The latter type of housing, targeted at the very lowest income households, is similar to the public housing regulated by the municipal housing bureau during China’s socialist housing provision period and is comparable with council housing in the British context. Low-rent housing in urban China is largely financed by special funds from all levels of governments and the Housing Provident Fund.

Conclusion:

This article highlights the growing importance of urban housing in national political economies, but also provides a cautionary tale of how policy intention, implementation, and outcomes can often be radically different. Whereas private homeownership is becoming a key goal of national states globally – increasingly linked to measures of progress and political success of political parties – pro home ownership policy in China has played a key role in the mediation of potential resistance and maintenance of social stability.

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