Tenure Shift in Contemporary Urban China: A Longitudinal Analysis

Youqin Huang, University at Albany, State University of New York

As part of the economic transition in China, the housing reform in Chinese cities was launched nationwide in 1988 and it aims to introduce market mechanisms into a heavily subsidized housing system. The reform promotes the privatization of housing and has granted households certain freedom of housing choice such as tenure choice that was not possible in socialist China. Yet, tenure choice in China is different from those in market economies because of the transitional nature of the current housing system and the socialist nature of previous housing system. While we know very little about housing behavior in urban China, most of the limited studies on housing focus on the recent shift to homeownership in urban China. This paper aims to understand tenure choice and tenure change by conducting a longitudinal analysis on the pattern and decision-making of housing tenure during 1949-94. In contrast to the economic and socio-demographic perspectives on tenure choices, I argue for a framework that incorporates the institutional relationships between state, employers (work units), and households to better understand households¡¯ housing behavior in urban China. I argue that with strong relationships between the three main actors in the housing system as in the socialist housing system, tenure choice and tenure shift are more likely to be determined by institutional factors such as job rank, ownership and rank of work units, while the weakening of these relationships resulted from housing reform will lead to the importance of demographic and socio-economic factors in the decision-making. A survey of 4,600 respondents in 17 cities that is conducted in 1994 will be used for analysis. This dataset provides detailed life-history data on employment and housing. Detailed housing information including tenure and the amount of space for every housing unit the respondent has ever lived since he/she started the first job was collected. The preliminary analysis shows that while housing tenure was dominated by public renting during this period, there was tenure shift between ownership and rental even in socialist era. While the rate of tenure change from rental to homeownership declines over time, there has not been a surge of shift to home ownership after the reform was launched. Yet, logistic regressions on tenure shift from own to rent, as well as from rent to own, will be conducted for two historical periods (before and after the reform was launched) separately. It is expected that institutional factors that indicates the relationships between the main actors in the housing system are more important to tenure shift in pre-reform era, while the reform weakens their power in tenure decision.