Traditional location theory matches location choices and stakeholder (e.g. developer, user) decisions in a competitive efficient market framework. Developer profit and land value are directly linked to the location characteristics of the property development project. Recent progress in theory & empirical studies has indicated the imperfection of the market e.g. market competition is monopolistic in the urban property sector. Urban affordable housing is typically under direct government intervention e.g. planning, finance, and tax benefits and/or restrictions. We investigate the Nanjing (China) affordable housing sector.

Data is collected from all existing affordable housing projects (2002-2010)
in the city.

Semi-structured interviews and site visits were conducted in 2009 and 2010. Through the study of the Nanjing affordable housing case, we found that the site (location) selection of most projects has shown a positive relationship with the general land value ingredient of Nanjing, site selection is heavily influenced by nearby urban development projects, which cause strong resettlement demand, due to the local government’s dual role, they consider the economic factors, such as the surrounding conditions of the sites, and the pervious use and compensation fees. We argue that demand and institutional factors place an important role in determining the location of affordable housing projects in Nanjing.