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Housing Tenure Segment in Transitional China : a Case Study of Guangzhou

Segmentation de l’accès au logement dans la chine en transition : le cas de Canton
Wangbao Liu
p. 523-531

Résumés

La réforme du logement en Chine vise à introduire des mécanismes de marché dans un système naguère dominé par l’attribution des logements par l’État. Le système du logement dans la Chine urbaine en transition combine aujourd’hui les caractéristiques de l’économie de marché et de l’économie planifiée avec des structures assez complexes de fourniture de logement et de baux. Pour explorer les traits principaux d’un secteur géographique du logement dans la Chine en transition, en utilisant les données d’une enquête conduite à Guangzhou en 2005, une série d’analyses de régression multivariées ont été menées, portant sur le choix entre location et achat, habitat subventionné et habitat sur le marché de l’immobilier, et entre location et propriété dans le marché subventionné et le marché privé respectivement. Les résultats montrent que la segmentation entre logements loués et achetés dépend davantage des caractéristiques du foyer que de variables institutionnelles, et que l’âge du chef du foyer, le type de hukou (enregistrement résidentiel), le revenu du foyer et le niveau d’éducation sont les facteurs principaux qui influent sur les choix résidentiels. Les variables institutionnelles sont évidemment plus importantes pour la différenciation entre habitat subventionné et habitat du marché, en raison de leurs modes différents d’attribution des logements. Les résidents en habitat subventionné ont en général un statut professionnel plus élevé, et ont travaillé de plus longues années dans les entreprises d’État, les entreprises collectives ou les services gouvernementaux. Cela correspond assez bien à la segmentation du logement en économie de marché : les caractéristiques des foyers, tout particulièrement les cycles de vie et le revenu des ménages, affectent de manière significative le choix en marché immobilier, alors que cela dépend davantage de variables institutionnelles dans le secteur subventionné.

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1. Introduction

1Western housing choice researches have formed two kinds of approaches : economic approach and socio-demographic approach. In economics, a house-occupier (owner or tenant ) is hypothesized to be economically rational and budget-constrained to search for utility maximization through tenure choice [Arnott, 1987]. Consequently, housing tenure choice is not only a consumption decision-making, but more importantly an investment decision-making within a highly competitive housing market. Henderson and Ioannides (1983,1985,1987,1989) initiated a series of housing research in economic approach, holding that family income, assets and housing prices are among the leading factors affecting housing choice, and that the homeownership rate increases linearly with the growing family assets. Non-economic factors are also included in these researches. Rather than a direct cause-effect relation with housing tenure choice, non-economic factors showed only an indirect influence on housing tenure choice through affecting socio-economic status. The applications of socio-demographic approach in the fields of geography, planning and sociology relate housing choice with social and economic domestic characteristics. Life course analysis is one of the most important approaches, with the assumption that housing choice is a critical event in life cycle, other factors in life cycle, such as marriage, birth of child, position transfer [Huang, 2001], age, family size and structure, birth of child, marriage status and changes, along with income level, also contribute to housing choice besides housing market conditions [Clark et al., 1996].

2Housing Market in transitional urban China is quite different from that in a mature market economy or in a fully planned economy, but rather a combination of both, reflecting certain characteristics of each system. Studies on Chinese housing market in transitional urban China have been launched from both macro and micro perspectives. Authors with macro perspectives analyze the process of Housing Policy Reform [Huang, 2001a ; Wang et al., 2000], or urban housing provision structure [Huang, 2003], etc. Housing choice behavior [Huang, 2001b], residential mobility and urban restructuring [Li, 2003 ; Zhou, 1996 ; Yi, 2003] are inquired from micro perspectives.

3Diversity characterizes the structures of both urban housing provision and housing tenure structure in transitional urban China. Options of housing for residents are multiple, but the access to subsidized housing, such as housing bureau and work units reform housing (fang gai fang), economic and suitable housing (jingji shiyong fang), cheaper rent housing (lian zu fang) and resettlement housing (anzhi fang), was strictly limited to a certain group, where the work units or local governments play as the judge and shape the allocation. From a socio-demographic view, this article investigates into the housing segment from housing choice behaviors in transitional Guangzhou with multi-variable statistical analysis after analyzing the provision and tenure structures in urban China.

2. Urban housing structures in transitional urban china

4During the planned economy era, urban housing provision was strictly controlled by government and work units, and besides some private-built housing, public housing was nearly the only choice for citizens. In transitional era, housing provision structure diversified into a duplex of both market economy and planned economy natures. Although the government (Housing Bureau) and work units still play important roles in housing provision, but their dominance is greatly encroached by the fast-growing individual and real estate developers. There have been two pricing systems in transitional housing system : subsidized pricing and market pricing [Li et al., 2004].Then housing can be classified into subsidized and open market housings. Subsidized housing, including housing bureau and work unit reform housing, cheaper rent housing, danwei rent housing, economic and suitable housing and resettlement housing has been given allowance or discount in rents and prices. Housing rent or sold in market price can be named open market housing, including commodity housing, individual-built housing and second-hand commodity housing.

5Housing tenure structure is categorized primarily into own and rent. But the tenure can be categorized further. For example, the tenure structure has been suggested into four groups : commodity housing from open market, resettlement housing, danwei subsidized housing, and housing bureau housing [Li, 2000]. In this article, accounting for the existence of subsidy or not, housing tenure structure is classified into open market housing and subsidized housing, subsidized housing includes work unit housing, housing bureau housing and resettlement housing. Individuals in different positions in the socio-economic ladder and working in different types of employment organizations have different access to the types of housing [Li, 2000] as showed in Tab.1. Housing under different pricing systems has different extent of ownership. Subsidized housing has just partial ownership, reform housing and economic and suitable housing had to consult with agencies for admission if planned to be sold in the market and repay the lag price after selling. Recently these regulations are loosed step by step, for example, reform housing can be freely traded in the market in 2003 in Guangzhou. Subsidized housing has clear constraints in access. Only those whose occupation and career age has satisfied the requirements were qualified to access reform housing provided only in state-owned work units including official agencies, state-owned corporations both with and without transform into stockholder etc. Employees from private-owned or foreign-invested companies set up after the reforms, which comprise a large part of labor force, had no access to reform housing. Cheaper rent housing and economic and suitable housing are available only to low income families with local hukou and below a certain income level restricted by local government. Resettlement housing was only for families affected by the demolition.

Table 1. Types of urban housing in urban China and their availablity

Housing types

Qualification

Work units reform housing

Sitting local urban tenants can purchase ownership from their work units (mostly stated owned) and occupation rank and service years were most important distribution criterion.

Housing Bureau reform housing

Sitting local urban tenants can purchase either ownership or use right.

Cheaper rent housing

For rental to local residents with lowest incomes. Living on government allowances, and with per capita living area smaller than certain standards.

Economic and suitable housing

Local urban residents with low or medium income can purchase at subsidized prices.

Resettlement housing

Local residents being relocated from areas undergoing development can purchase at subsidized price (often lower quality housing in remote locations).

Commodity housing

Anyone who can afford the housing price can purchase at market price.

Source : based on Huang, 2003 ; Wu, 2004.

3. Data and methodologies

3.1. Data

6The data were derived from a survey of 1500 households including 1200 common communities samples and 300 urban villages (Cheng Zhong Cun) floating population samples. A multi-level probability to size (PPS) sampling strategy was adopted to select the respondents, who were to be distributed in proportion to the population of the original eight districts (Yuexiu, Dongshan, Liwan, Haizhu, Baiyun, Huangpu, Tianhe and Fangcun) and Panyu newly incorporated in 2001 where phenomenal urban growth has taken place in recent years and new administrative boundary adjustment in 2005 is ignored in this article. The samples have concretely distributed in 53 communities (juwei) in 42 sub-districts (jiedao). Figure 1 plots the spatial distributions of sample communities. Samples are firstly grouped into own and rent sub-samples in terms of housing tenure, and then divided into subsidized and open market housing sub-samples in term of the discounted of housing price or not, and at last future divided into rent and own in subsidized and open market housing samples respectively.

Figure 1. Spatial distribution of sample communities

Figure 1. Spatial distribution of sample communities

3.2. Analytical framework and statistical methods

7In order to analyze the complex matching process between households and housing to reflect housing segment from housing tenure choice, a multi-level analysis is needed in the context of complex structure of housing tenure in transitional Guangzhou. The analysis includes three levels. The first level analyzed the segment between the own and rent of all households, the aim of the housing reform is promotion of housing ownership, and the choice of rent or own has become a basic option for most households which also reflects the basic housing segment. The second level analyzes the segment between open market housing and subsidized housing which reflects access constraints of public housing and the impacts of housing reform and housing welfare policies on social divisions. After this, segment of own and rent in subsidized housing and open market housing respectively will be analyzed in the third level. Binary logistic model with the following format is used for tenure choice model in all levels.

8Where, p =the probability of choosing one type of housing, xi =household socio-economic
variables, xk=institutional variables, and βi, βk =the coefficients of model.

3.3. Descriptive analysis

9Definitions of variables are taken after mainstream studies of housing choice in western literature, catering for housing realities in China. Two types of variables are included : household socio-economic variables and institutional variables reflecting relationship between individual and government or work unit. Socio-economic variables contain marital status (head of household, hereinafter head), educational level (head),age (head), number of household members(NHM), and number of household members in work (NHMW). Institutional variables contain hukou status (head), occupation/position of head, years of service in current work unit, and types of work unit (See Table 2).

Table 2. Descriptive analysis of household basic characteristics

Variables

Percent ( %)

Mean

Variables

Percent ( %)

Mean

Independent variables

 < 20000RMB

23.4

 Own

61.3

 20000-50000RMB

47.3

 Rent

38.7

>50000RMB

29.3

 Open market housing

70.3

Institutional variables

 Subsidized housing

29.7

Hukou

Household characteristics

Local Hukou

72.1

Marital status (head)

Outside Hukou

27.9

Unmarried

19.5

Years of service (head)

9.56

Married

80.5

Occupation (head)

Age (head)

37.07

 General labors

25.7

NHM

2.83

 Managers

25.7

Educational level (head)

 Petty traders

20.5

 Low9 years and below

29.5

 other type

28.1

 Middle (10-12 years)

58.9

Types of work unit (head)

 High (13 years and more)

11.5

 SCGFRIM

34.1

NHMW

1.75

 Other

65.9

HAAI

Source : calculated from survey data by the author.

10Age of the head, marital status (head) and number of household members (NHM) reflect the stage of family life-cycle. In most studies conducted in the west literature, the family life-cycle has been found to be one of the most important factors affecting housing decisions. Educational level contains three levels including Low (primary and junior middle school), Middle (senior middle school and occupational school) and High (college) which account for 29.5, 58.9 and 11.5 percent of all household respectively. Household annual average income (HAAI) is divided into three levels including less than 20.000 RMB, 20.000 to 50.000 RMB and more than 50.000 RMB which account for 23.4, 47.3 and 29.3 percent respectively. Four types of occupations including general labor, managers, petty traders and other types which account for 25.7, 25.7, 20.5 and 28.1 percent of respectively, and general labor is defined by those including service workers, manual workers, and non-technical workers who pursue the low skill-required occupations. Work units are classified into two types, SCGFRIM and other. The former includes state-owned enterprises, collective enterprises, government department and the latter includes all that not included in the former. The former accounts for 34.1 percent and the latter for 65.9 percent.

4. Housing segment analysis

4.1. Housing segment between rent and own

11Using binary logistic regression model to estimated the housing segment between rent and own, the equation is significant at 0.000, which means that households who reside in rent housing are quite different from those in owned housing (see Tab.3).

Table 3. Housing segment between rent and own

Explanatory variables

(1 =own, 0 =rent)

Coeff.

(β)

Odds ratio

(eβ)

Explanatory variables

(1 =own, 0 =rent)

Coeff.

(β)

Odds ratio

(eβ)

Household characteristics

Institutional variables

Age (head)

0.129*

1.134

Hukou

***

Age square(head)

-0.001

0.999

Outside Hukou#

NHM

0.145

1.156

Local Hukou

3.515***

33.601

NHMW

0.130

1.139

Years of service

0.004

1.004

Marital status (head)

***

Occupation

*

Unmarried#

 General labors

0.082

1.806

Married

0.202

1.224

 Managers

0.641*

1.898

Educational level (head)

***

 Petty traders

0.155

1.168

 Primary#

 other type#

 Junior

0.696***

2.006

Types of work unit

 Tertiary

0.747*

2.111

 SCGFRIM

0.168

1.183

HAAI

***

 SPFIRM#

 < 20000RMB#

Constant

-7.506***

0.0005

 20000-50000RMB

0.836***

2.731

-2 log likelihood

1088.683

>50000RMB

1.939***

6.947

Note : # is reference variable.*Significant at 0.05 level, **Significant at 0.01 level, *** Significant at 0.001 level.

Source : calculated from survey data by the author.

4.1.2. Institutional variables

12Of all institutional variables, only hukou status and occupation (head) show significant differences and other variables including years of service in current work units and types of work unit are proved to have no significant impact. As we expected, hukou status is proved to be significant, local population has much higher probability of owning house than migrants (rates of home ownership of locals and migrants are 82.1 % and 7.39 % respectively). It manifests that migrants are in adverse position in housing market and most of them can’t afford a house with market price because of their inferior position in labor market. Managers with higher income have higher probability of purchasing a house than reference group.

4.2. Housing segment between subsidized and open market housing

13Comparing with housing segment between own and rent, institutional variables are evidently more significant to affect housing segment between subsidized and open market housing than households characteristics. All institutional variables including Hukou status, years of service, occupations and types of work units are proved to be significant, but only households income in household characteristics variables proved to be significant (see table 4). This is because allocation of subsided housing was mainly administered by governments or work units, so the relationship between individual and government or work unit decides who had qualifications to obtain subsided housing.

4.2.1. Household characteristics

14As expected, household income is a highly significant variable in differentiating households in open market housing from those in subsidized housing, the higher income means the lower probability of obtaining a subsidized housing.

4.2.2. Institutional variables

15All of institutional variables are significant to affect the choice between subsidized and open market housing. Hukou status has significant effects on choice between subsidized and open market housing, local population has nearly 18 times higher probability to obtain subsidized housing than migrants. The gap between them is so big that migrants nearly have no access to enjoy any subsidized housing, especially cheaper rental housing and economic and suitable housing. Hukou system is one of most important factors affecting residential differentiation and migrants aren’t still included in housing social security systems, so they have no choice but to rent or own private or commodity housing in open housing market with market price, but because of their inferior position in labor market and lower income, they often couldn’t afford the rent price and choose peasants’ housing with inferior living condition but relative cheaper price, which may be one of most important factors for formation of “migrant enclaves”, such as urban villages (cheng zhong cun). As an important criterion for allocations of reform housing, years of service have significant effect on this differentiation, the longer of service means higher probability of obtaining subsidized housing. Occupation of the head is also significant, but it doesn’t mean that higher level of occupation, higher probability of obtaining subsidized housing, and the managers has only 46.4 percent of probability comparing with reference group ; the petty traders who don’t have the work unit to take care of their housing needs, have the lowest probability of obtaining subsided housing. Types of work unit have statistical significant effect, the employees from the SCGFRIM including stated-owned enterprises (SOES) and collective enterprises and government department have evidently greater chance to obtain subsidized housing because work unit reform housing was provided only in this kind of work units and employees from private or foreign companies set up after the reforms had nearly no access to reform housing.

Table 4. Housing segment between subsidized and open market housing

Explanatory variables

(1 =subsidized housing, 0 =open market housing)

Coeff.

(β)

Odds ratio

(eβ)

Explanatory variables

(1 =own, 0 =rent)

Coeff.

(β)

Odds ratio

(eβ)

Household characteristics

Institutional variables

Age (head)

0.068

1.071

Hukou

***

Age square (head)

-0.001

0.999

Outside Hukou#

NHM

0.460

1.584

Local Hukou

2.917***

18.478

NHMW

-0.062

0.940

Years of service

0.042*

1.046

Marital status (head)

Occupation

***

Unmarried#

  General labors

-0.229

0.796

Married

-1.123

0.325

  Managers

-0.767***

0.464

Educational level (head)

  Petty traders

-1.463***

0.232

  Primary#

  other type#

  Junior

-0.344

0.709

Types of work unit

***

  Tertiary

-0.246

0.782

  SCGFRIM

0.169***

1.183

HAAI

***

  SPFIRM#

  < 20000RMB#

Constant

-4.538***

0.011

  20000-50000RMB

-0.029

0.971

-2 log likelihood

1332.653

>50000RMB

-1.160***

0.314

Note : # is reference variable.*Significant at 0.05 level, **Significant at 0.01 level, *** Significant at 0.001 level.

16Source : calculated from survey data by the author.

4.3. Housing segment in subsidized and open market housing

17The segment between own and rent in open market housing and subsidized housing respectively constitutes the third level of analysis. Two estimated models are all significant at p =0.000 (see table 5). There are many differences between the factors affecting tenure segment in open market and subsidized housing. Household characteristics are more significant than institutional variables to affect tenure segment in open market housing, otherwise, institutional variables are evidently more significant than household characteristics to affect tenure segment in subsidized housing which reflects the different allocation rules between subsidized and open market housing. Allocation of public housing was mainly controlled by government or work units, so the result of whether an individual is employed by a governmental agency or state-owned establishment decides his qualifications to obtain public housing. But allocation of open market housing is mainly determined by market force, household characteristics, especially household income determines who could purchase a house.

4.3.1. Tenure segment in open market housing

18It is very evident that tenure choice in open market housing is a free choice process in term of their family status. Age (head), numbers of household members and household income have significant effects. Increase of age (head) and numbers of household members will enhance the chance of owning a house in open market which manifests that life cycle change is a significant factor affecting housing tenure segment somewhat in line with western market economic. Hukou types also have significant effects with local population has much higher probability of purchase a house in open market than migrants, which reflects the inferior position in housing market of migrants. As we expected, household income has positive and significant impacts on tenure segment in open market, and higher income group is more likely to purchase a house. All of the institutional variables are insignificant.

4.3.2. Tenure segment in subsidized housing

19Desition of subsidized housing was mainly administered by government (housing bureaus) or work units, so institutional variables are evidently more significant. All household characteristic variables are not significant, but all institutional variables are significant. The probability of local population to own a subsidized housing may 62.067 times higher than that of outside population. Increase of years of service will increase the probability of owning a subsidized housing (mainly reform housing) which reflects the impacts of the allocation rules of reform housing on residential differentiation. In comparison with ordinary worker, managers have greater chance to own. Employees from state-owned enterprises, collective enterprises and government departments have greater chance of own than those from other types.

Table 5. Housing tenure segment in open market and subsided housing

Explanatory variables

(1 =Own,0 = Rent)

segment in open market housing

Segment in subsided housing

Coeff. (β)

Odds ratio

(eβ)

Coeff. (β)

Odds ratio

(eβ)

Household characteristics

Age (head)

0.108*

1.114

0.097

1.102

Age square(head)

-0.001

0.999

-0.001

0.999

NHM

0.546***

1.726

-0.115

0.891

NHMW

-0.114

0.893

0.279

1.322

Marital status (head)

Unmarried#

Married

-0.044

0.957

-0.109

0.892

Educational level (head)

  Primary#

  Junior

0.757

2.132

0.532

1.702

  Tertiary

0.653

1.921

0.964

2.622

HAAI

***

  < 20000RMB#

  20000-50000RMB

1.464***

4.323

0.357

1.430

>50000RMB

2.332***

10.300

0.950

2.568

Institutional variables

Hukou

***

***

Outside Hukou#

Local Hukou

4.128***

62.067

3.349***

28.472

Years of service

0.045

1.046

0.002*

1.002

Occupation

**

  General labors

0.755

2.128

-0.483

0.617

 Managers

0.717*

2.049*

0.404**

1.468

  Petty traders

0.183

1.201

-0.658

0.518

  other type#

Types of work unit

**

  SCGFRIM

0.103

1.108

0.245**

1.278

  SPFIRM#

Constant

-9.014***

0.000

-5.262**

0.005

-2 log likelihood

499.180

494.146

Note : # is reference variable.*Significant at 0.05 level, **Significant at 0.01 level, *** Significant at 0.001 level.

Source : Calculated from survey data by the author.

5. Conclusion

20As a part of the system transition, housing reform in urban China aims to introduce market mechanisms into previously welfare-oriented housing system with more complex structures of housing provision. Complex provision structure and dual housing pricing systems lead to complex tenure structure in transitional housing market.

21Using a survey data in Guangzhou in 2005, multi-level logistic regressions of housing segment between rent and own, between subsidized and open market housing, and between rent and own in subsidized housing and open market housing respectively were performed. The results show that choice between rent and own is more significantly affected by household characteristics than institutional variable. Age (head), Hukou types, household income and educational level are significant factors affecting this choice. Because of their adverse position in labor market, migrants have evidently much lower ability to purchase a house than local population. Institutional variables are more significant to affect housing choice between subsidized and open market housing because of the allocation rules of subsidized housing. Residents in subsidized housing generally hold higher-status occupations, and have longer years of service and work in state-owned enterprises, collective enterprises and government departments. Access constraints of public housing leads to more and more obvious impacts of housing reform on residential differentiation. It is somewhat in line with the tenure choice in market economy that household characteristics, especially life cycle change and household income, significantly affect tenure segment in open market housing, but tenure segment in subsidized housing depends more on institutional variables.

22In summary, housing segment in transitional urban China is affected by not only household characteristics, but also the institutional position of household in relation to housing agents work units. The state, local government and work units play significant roles in defining households’ position in the housing market through judge of allocations of public housing. But with the fast development of real estate and with the maturity of housing market, the market force and household characteristics, especially household income and life cycle change are playing more and more important roles on effecting housing segment.

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DOI : 10.1080/02673030082360

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LI Siming (2003), Housing Tenure and Residential Mobility in Urban China : a Study of Commodity Housing Development in Beijing and Guangzhou, Urban Affairs Review, vol. 38, pp. 510-534.
DOI : 10.1177/1078087402250360

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LI Siming, LI Limei (2004), Life Course and Housing Tenure Change in Urban China : a Study of Guangzhou, CURS’ Occasional paper series, ISBN 962-8804-40-5.
DOI : 10.1080/02673030600807159

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WANG Yaping, MURIE Alan (2000), Social and Spatial Implications of Housing Reform in China, International Journal of Urban and Regional Research, vol. 24, pp. 397-416.
DOI : 10.1111/1468-2427.00254

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WU Weiping (2004), Sources of migrant housing disadvantage in urban China, Environment and planning A, vol. 36, n° 7, pp. 1285-1304.
DOI : 10.1068/a36193

YI Zheng (2003), Shehui zhuanxing shiqi zhongguo chengshi juzhu liudong yanjiu-yi Guangzhou weili (Residential mobility of urban China in social transition : study the case of Guangzhou), Dissertation paper, Center for urban and regional studies in Zhongshan University (in Chinese).

ZHOU Chunshan (1996), Gaige kaifang yilai dadushi renkou fenbu yu qianju yanjiu (A study of population distribution and residential relocation in large cities in the reform era), Guangzhou : Guangdong Gaodeng Jiaoyu Chubanshe (in Chinese).

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Table des illustrations

Titre Figure 1. Spatial distribution of sample communities
URL http://eps.revues.org/docannexe/image/3845/img-1.jpg
Fichier image/jpeg, 400k
URL http://eps.revues.org/docannexe/image/3845/img-2.jpg
Fichier image/jpeg, 48k
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Pour citer cet article

Référence papier

Wangbao Liu, « Housing Tenure Segment in Transitional China : a Case Study of Guangzhou », Espace populations sociétés, 2009/3 | 2009, 523-531.

Référence électronique

Wangbao Liu, « Housing Tenure Segment in Transitional China : a Case Study of Guangzhou », Espace populations sociétés [En ligne], 2009/3 | 2009, mis en ligne le 01 décembre 2011, consulté le 21 octobre 2014. URL : http://eps.revues.org/3845

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Auteur

Wangbao Liu

School of Geography Science
South China Normal University
Zhongshan Road
510631 Guangzhou
République Populaire de Chine
liufeng09023@126.com

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Droits d’auteur

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