College of Resource Environment and Tourism, Capital Normal University, Beijing, China
This chapter provides a review study of Beijing, which has strong institutional legacies, as well as a high incidence of city-branding movements. A profile of the pathways to low-cost housing and spatial mobility of Beijing’s four typical low-income groups is given. An overall review of Beijing’s housing reforms and the formation of typical low-income housing areas aims to establish the problem of housing inequality that has long afflicted both the local low-income inhabitants and migrant workers. A comparison is made between the local and non-local dislocated groups in order to display both their uneven experiences of the housing inequalities and residential ‘mobilities’ following the ‘city imaging’ movements. A review of the literature, documentation, policies and official statistical data is conducted in this chapter.
Since the start of housing reforms in the 1980s, China’s housing provision mechanism has gradually shifted from a public sector-dominated to a private market-oriented system, with a dual-track housing system characterized by the coexistence of the ‘plan-track’ and the newly introduced ‘market-track’ bases, a long-lasting dilemma, which has led to inequality and distributive injustice (Zhu 2000; Wang 2001; Wang et al. 2012; Wong et al. 1998; Lee 2000). There is no doubt that housing privatization and the real estate industry have benefited the majority of urban residents with respect to living conditions and access to homeownership (Wang 2003). However, the remainder of urban families, mostly with financial and social disadvantages, have not shared in the equitable gains of the pro-market reform. In the full marketization phase of housing reforms, the low-income groups are afflicted with housing difficulties, either due to housing unaffordability or the shortfall in supply of subsidized housing.
Beijing, as the national capital, with widespread administrative power, accommodates a large number of central government departments, state-owned enterprises and public institutions. By 1997, the central government establishments were still the largest employers, which administered 47.1 % of Beijing’s housing stock catering for their employees’ housing accommodation (Wang 2001). Prior to the urban reform in the 1980s, political rather than economic status was the most significant determinant of the spatial differentiation of cadres and non-cadres in Beijing (Sit 1999). As shown in Fig. 6.1, Beijing has been experiencing a succession of economic and spatial restructuring, taking it from a large industrial city to a multi-functional competitive ‘world city’. Since 2000, a significant proportion of Beijing’s financial resources have been directed to property development (Zheng 2007; Ma and Zhang 2006).
Economic and spatial restructuring of Beijing during the transition to a competitive world city (since the reforms of the 1980s) (Compiled from various sources)
Clearly, the impact of property market forces on both residential choice and the living conditions of low-income residents, including inner-city residents, rural migrants and young low-income professionals, have been substantial (see Wang 2004). A series of reforms, such as corporate restructuring and urban redevelopment (as listed in Fig. 6.1), have contributed to the rising social stratification and segregation, widened income gaps, and caused the emergence of distinctively identifiable low-income groups of local urban origin and the segregation of migrant workers in Beijing (Wu 2002a, 2004a).
The economic reform and liberal housing policies have witnessed an increase in homeownership from 20.2 % in 1998 to 83.1 % in 2010 in Beijing (see Table 6.1). For low-income residents, as well as a large number of newly-arrived rural migrants who are denied a legal residential registration and are employed (or self-employed) in low-order services, construction and other lowly paid sectors, formal housing access has remained a key problem (Wu 2004b).
Housing status of Beijing’s urban households, 1998–2010
Grand total (%)
Public rental housing (%)
Private rental housing (%)
Privatized public housing (%)
Commercial housing (%)
Privately owned houses (%)
The next section will explore and compare the respective housing problems and spatial mobility of four typical low-income groups during the housing reform in Beijing:
6.2 Housing and Redevelopment Policies in Beijing: A Review
6.2.1 Reform of Urban Housing
During the pre-reform period from the 1950s to 1979, private ownership had been mostly eliminated through expropriation or nationalization and public rental housing had become the key supplier of housing in cities, as part of a redistributive economy for the egalitarian allocation of state-owned resources. The central government played the role of an economic administrator and financial supporter of all urban housing, whereas municipalities and public institutions (including state-owned enterprises) were the main state agencies in charge of housing construction and distribution at the local level.1
Prior underinvestment in the housing sector and backlog have resulted in the government having plenty of work to catch up with in terms of meeting demands after the reforms. From 1949 to 1980, the Beijing government’s investment on housing construction represented only 11.4 % of the total investment on fixed assets since financial resources were mostly allotted for industrial and military investments (Kuang 2003). In the ‘low-wage and high-subsidies’ system, housing consumption in urban household expenditure was less than 1 %, as nominal rent was set at a low level irrespective of tenants’ rank and wage (Cheng 2007). According to a housing survey in Beijing in 1985, housing maintenance and management cost 0.54 Yuan/m2. per month, while the monthly rental of public housing cost only 0.124 Yuan/m2 (Sohu 2007).
The limited investment and nominal rental charges were neither sufficient for reinvesting in new housing construction and maintenance, nor adequate to meet the housing needs of the rapidly increasing population in Beijing which rose from less than two million in 1949 to nearly nine million in 1980. The average floor space per capita was only 5 m2. in Beijing before the reform. Both the sitting tenants and those waiting in queue suffered from small living spaces and poor housing quality. The housing reforms which followed the advent of the economic reform since 1980 were carried out with several objectives:
To reduce the government’s budget deficits and to relieve the government’s responsibility in housing provision, with the purpose of enhancing the competitive edge of state-owned enterprises and public institutions
To allow private developers to join as another alternative of housing suppliers
The privatization of state-owned housing and its conversion into a marketable asset have resulted in losses among some employees of state-owned enterprises in the mid-1990s. Homeownership in Beijing was confined to registered permanent residents, especially for families whose household heads were employed in public sectors. Table 6.1 shows urban households who were mainly public housing tenants before 1998. Since then, public housing commodification has increased in pace and resulted in a major increase in homeownership in Beijing, hence illustrating the success of Beijing’s housing privatization (see Table 6.1). Besides the privatized public housing for danwei employees, commercial housing built and sold in the open market has been the other major source of homeownership growth in Beijing: a leap from less than 5 % in 2004 to almost 40 % in the late 2000s.
In Beijing’s shift from state rental housing to homeownership, three stages of reform can be identified: the pilot experimental stage (1980s), the double track stage (1992–1997) and the full marketization stage (1998 onwards) (Li and Yi 2007). The ‘double track’, a discriminating policy for insiders and outsiders, is a distinctive pattern in China’s gradual and trial-and-error style of reform (Clapham 1995; Walder and Oi 1999; Chen 2004). In the ‘double track’ system, housing privatization and subsidies were mainly available for the regular employees in danwei as ‘insiders’, but inaccessible to those outside the public sector, who are considered as ‘outsiders’.
Table 6.2 shows the three segmented housing markets in China that are produced by the multi-level and double-track housing provision system. The migrants only have access to private housing markets. Affected by the drastic social reshuffling and years of inflation and the resulting housing bubble, the question of who has the right to obtain governmental housing assistance has become an issue of great contention. The allocation of housing assistance (e.g. selling Economic Housing at a subsidized price and allowing the houses to be tradable after a five year residence, the Housing Provident Fund and cash subsidies for commercial housing purchases) continues to present day and is often seen to be biased towards favoured interest groups (Tomba 2004; Huang and Jiang 2009; Wang 2003).
The three segmented housing markets during the double-track stage
Privatization of low-rent public housing
Partial property rightsa
Sitting tenants of public housing, mostly employed in state agencies
Selling to employees at subsidized prices
Subsidized economic housing (named Anju housing in the mid-1990s)
Limited property rightsb
Ordinary wage earners with housing difficulties, including employees of government offices or state enterprises, teachers, and other low- and middle-income local households
A mix of welfare and commodity
Full property rightsc
The more affluent, including white collars in foreign companies, overseas Chinese, wealthy entrepreneurs, nouveaux riches
6.2.2 Redevelopment and Compensation Policies
As early as 1991 in Beijing, the Regulations for the Implementation of Urban Housing Demolition stated that the owners and users of buildings were entitled to compensation, but individual users were restricted to the local hukou holders (Beijing Municipal Government 1991). As stated in the 2001 revised version of this stipulation, property owners and tenants in public and private buildings should be the recipients of compensation following home demolitions, if their tenure is legal and formal (Beijing Municipal Government 2001). By and large, there exists a restriction of compensation eligibility for local hukou holders and those in the legal rented market. The migrant tenants are the most disadvantaged in this process and hence, most negatively affected.
Low-income migrant workers are ineligible for housing aid, if they are tenants of illegal or non-tradable constructions. However, for the same reason, the local population confronting unwilling dislocation can mobilize their social resources, through appeals to higher courts and media exposure, as well as seek support from sympathetic leaders (O’Brien and Li 2005; Johnson 2004), whereas the migrant tenants have little means of expressing their voices.
For instance, as shown in Fig. 6.2, the residents and developers try to negotiate and reach an agreement on the compensation issues; if no agreement is reached, they would then refer to the governmental arbitration; if the residents decline to accept this arbitration decision, they can take the case to the people’s courts (see Beijing Municipal Government 2001; Shin 2008). This negotiation process occurs mainly among the local people and developers with few cases of migrant tenants’ appeals against demolition or for a fair compensation.
Between 1991 and 1999, the introduction and implementation of market-oriented redevelopment led to a massive off-site relocation from inner cities to suburban estates. Since 2000, more and more subsidized housing instead of commercial housing has been provided in the redevelopment schemes for resettlement purposes, in order to make it more affordable for dislocated residents to get re-housed. This resulted in a larger gap between local and non-local residents in terms of compensation eligibility, as subsidized housing schemes are an inaccessible welfare for migrants.
6.2.3 Growth Control and Upgrading Policies
The hukou system in big cities would not be lifted, as it is still seen as an indispensable management tool to mitigate the over-population crisis that has placed financial and environmental stress on the local governments. During the period of China’s 11th and 12th Five-Year Plan, Beijing has developed a mature framework to manage its population, including its rural migrants. In particular, it aimed to form a population developmental paradigm that fits into a modern image of the national capital.
From as early as 1993, Beijing has planned to be ‘a modern global city’ in its city plan. Local practices have been undertaken to ‘curb the disorderly and over-growth of population’, and to attain the optimal population size, structure and density with an orderly mobility (Beijing’s 12th Five-Year Plan). As shown in Table 6.3, the new management paradigm in Beijing involves the following parts:
The administration of city growth control is done through the hukou system, and involves the rationing of a full range of city benefits for the hukou holders while limiting the access of the non-hukou population, and simultaneously, through land-use control, the confinement of built-up areas to a designated scope too small to meet the residential needs of a large migrant inflow
The replacement of a highly-skilled labour force with unskilled migrant workers, through actions taken to downsize the low-end industrial sectors and shut down underproductive activities
City branding movements that are local practices in accordance with the central State’s plans, technological norms and regulatory rules in the making of a modern city image, commonly taking the form of ‘Accumulation by Dispossession’ (Harvey 2003: 145, 2008: 34)—to clean up dilapidated and unproductive spaces and rebuild them into productive ones.
The reconsolidated management of the floating population in big cities since the 11th Five-Year Plan (2005—Present)
Local practices (Beijing as an Example)
1. Administrative city growth control through hukou system
11th Five-Year Plan: encouraging the rural population to settle down in mid-sized or small cities and towns
Beijing’s 11th Five-Year Plan aimed to keep the population below 16 million till 2010; its master plan (2004–2020) made an aim of population regulation below 18 million till 2020, but the 6th Census reported a total population of 20 million in 2010
Regulating the over-population of big cities
Population regulation was listed as one of the exigencies that the Beijing government needed to address in 2009 and 2010 and hence, is reiterated as the developmental goal during the period of the 12th Five-Year Plan
2. Replacement for unskilled labour
11th Five-Year Plan: using industrial upgrading in big cities to downsize the labour-intensive industries and unskilled workforce
Implementing a harsher hukou quota system that is rationed merely for highly-skilled professions
Three methods are used by Beijing’s districts and counties to govern the floating population: (a) using the ‘temporary residency card’ to supervise the floating workers; (b) using industrial upgrading to downsize them (e.g. closing down 17 lower-end sectors in Shunyi District which led to a sharp decrease of Beijing’s self-employment firms by 0.14 million; see Caijing 2011; EEO 2013); and (c) using housing regularization to regulate them
3. City branding movements
12th Five-Year Plan: rationally planning the urban growth boundary, regularizing buildings and optimizing land-uses, curbing city sprawl and curing the ‘big city ills’
Forbidding the leasing out of basement and village housing for tenement uses, clearing up the extra-legal and substandard buildings, and upgrading the rental housing market in peri-urban areas for collective management
Building the zhongguancun area of Beijing into a world-class high-tech centre
6.3 Comparing Dislocated Migrant Workers and Local Dislocated Groups in Beijing
6.3.1 Evolving Housing Welfare of Low-Ranking Employees in State Agencies
In the pre-reform era, urban public housing was distributed based on the occupational title and status of the head of the household, not according to income level, in the context of a low-salary and egalitarian society. This rationale of distribution was used when the government privatized public housing units, giving privileges to senior cadres. The low-ranking employees in state agencies were normally sold smaller property units with lesser rebates, and the waiting time for them was also longer than for senior staff. In Beijing, public sector employees were entitled to a discount of 0.5 % of the sale price, after one year and then after each year, up until 40 years of service, which meant they were entitled up to a maximum of a 20 % discount (Wang 2001). These preferential rights of manual workers differed from managers, technicians and professionals in the state-owned enterprises (Wang et al. 2005).
Manual workers had more difficulties in obtaining homeownership from the sales of public housing, when their danwei housing became the assets of private companies, following the property restructuring reforms. Factory workers’ living quarters, owned by state-owned enterprises, were mostly built in the 1950s (between the 2nd and 3rd Ring Road) and the 1980s (between the 3rd and 4th Ring Road; and for the Capital Iron & Steel Corporation, to the immediate west of the 5th Ring Road). The construction of housing for factory workers declined in the 1990s and ceased completely after 2000 (Wang et al. 2005). Workers’ quarters within the 4th Ring Road and suburban industrial estates (Shijingshan and Fengtai Districts) had then become badly run down, which is reflected by the poor quality low-rise housing in the area.
Economic reforms had led to bankruptcy, mergers and the relocation of many state enterprises, bringing hardship to workers’ livelihoods in the old industrial regions. Over 300 factories, including one heavily polluting iron and steel plant, Capital Iron & Steel Corporation, were affected, including 60,000 employees of the latter (Ness 2002; Yang 2005).
Low-ranking employees also lost out when the salary scale of state agencies was increased in order to strengthen the organization’s purchasing power, as pay rises favoured senior cadres. Housing inequality between the new and old employees in public sectors widened when public housing privatization ended soon after 1998. As shown in Table 6.4, in the 1990s, the ‘group buying’ by danwei of property for their employees was eligible for the following groups (see Kuang 2003: 127):
Party organizations and ministries and commissions under the State Council
State or regional enterprises having a Beijing office or subsidiary
Other smaller danweis.
‘Group buying’ in Beijing and Shanghai: 1991–2000
Floor area of commercial housing sold (million sq. m.)
Floor area of ‘Group Buying’ (million sq. m.)
Proportion of ‘Group Buying’ to commercial housing (%)
Floor area of commercial housing sold (million sq. m.)
Floor area of ‘Group Buying’ (million sq. m.)
Proportion of ‘Group Buying’ to commercial housing (%)
The scale of ‘group buying’ of commercial housing in the national capital of Beijing was obviously higher than that in Shanghai. Such buying began to relax after 2000; only resourceful danweis with self-owned land could continue to build new houses for their personnel, as a form of living allowance. The most noted landowners included:
Large centrally-owned enterprises
Danweis from the central government and State Council systems, military systems and those for education, research, healthcare
Other public services.
By setting up ‘housing service centres’, the central government departments (or units) undertook measures in order to upgrade or rehabilitate old housing units and build new apartments within inner-city areas for sale to their employees. For example, Hepingli Neighbourhood (north 2nd Ring Road), Baiwanzhuang, Zhenwumiao and Xibianmen Neighbourhoods (west 2nd Ring Road) were new housing units built after 2000. Guangquan (east 2nd Ring Road) and Guangyuan Neighbourhoods (east 2nd Ring Road) were two other neighbourhoods both sold in 2006–2008 to state employees, at prices ranging from almost one tenth to half of that of the surrounding commercial housing of comparable standards (News.Dichan.Sina 2011). Moreover, employees of these resourceful danwei and monopolistic state-owned enterprises enjoyed the privilege of being able to apply for Economic Housing built by government agencies.
Employees from other ordinary danwei had to either wait for long periods for Economic Housing, or use their limited cash subsidies in order to buy property in the commercial market. The laid-off state workers were typically found in this kind of situation (see Wang et al. 2005). Other employees outside public sectors (e.g. contract and temporary workers, workers in informal economies, the unemployed, rural migrant workers) did not qualify for housing welfare benefits, unless they were original residents in the dilapidated public tenement areas, such as Beijing’s traditional courtyard housing. In all instances, access of public sector employees to subsidized public housing depended on the size and performance of the danwei after housing reforms had taken place2 (Huang and Jiang 2009).
Table 6.5 compares the differentiated treatments for senior officials compared to lower-ranking employees, in state agencies during the housing reform period. These state employees were still sheltered by a series of subsidy policies and government assistance, including the Economic Housing schemes initiated in 1993, and municipal low-rental public housing projects introduced since 2001. When housing survey of Huilongguan Neighbourhood was conducted, it was found that Beijing’s famous universities and large state-owned enterprises purchased Economic Housing buildings for their staff, and then sold to them at a subsidized price, in addition to awarding them central-heating allowance.
Evolution of urban housing welfare provision and beneficiaries
Housing welfare policies
Before housing reform (single form)
Municipality or work-unit based housing welfare
All urban residents with local hukou as tenants at nominal rates
Housing reform period (multiple forms)
Sales of public housing at below market prices
Employees in public sectors but priorities given to senior staff
Cash subsidies for housing purchase on free market
Given to employees due to limited supply of public housing units
Housing provident funda
Mandatory savings from employees for house purchase
Low- and middle-income residents with local hukou, without houses or with substandard houses
Low rental housingc
Poorest registered residents, protected by the Lowest Life Guarantee Policy, with floor area per capita of less than 7.5 m2
Largely speaking, because of limited supply of property, more privileged officials and cadres were given top priority for housing ownership; low-ranking personnel received cash subsidies, but the amounts were too small to allow purchasing of commercial housing, the prices of which surged strongly after 2004. The non-hukou residents were not entitled to purchase privatized public housing or affordable housing. The governmental subsidized schemes were believed to be helpful to the native low- and middle-income groups, considering the unaffordability of property amidst the atmosphere of rampant speculations in the housing market. In the 2000s, housing price in Beijing rocketed from less than 5,000 Yuan/m2. to 20,000 Yuan/m2. But the inadequate supply and unequal allocation of housing units to lower-ranking groups have drawn much criticism. One aspect of this is the scale of resettlement which had created a substantial demand for affordable Economic Housing constructed far from their original homes in the city fringe. In Beijing’s largest Economic Housing projects in the Tiantongyuan and Huilongguan neighbourhoods, the middle- and higher-income residents enjoy the suburban green environment, being at a distance from the city centre, and overcome the distance by driving private cars to commute to work, while low-income groups would face problems of adaptation after leaving the traditional hutong areas that used to provide them with employment opportunities as well as support services. Relocated inner-city residents also require more attention and assistance.
6.3.2 Relocated Inner-City Residents: Limited Access to Resettlement Choices
Despite the massive demolition of monuments in the old city of Beijing to make way for the implementation of modern infrastructure during the latter half of the past century, inner-city housing did not undergo radical change until 1991, when the Municipality launched the ‘Old and Dilapidated Housing Renewal Program’ in inner cities, covering the four Districts of Dongcheng, Xicheng, Chongwen and Xuanwu. Before urban renewal, houses in the inner cities were represented by one-storey buildings and traditional lanes, as well as some danwei housing or workers’ living quarters, built between the 1950s to the 1970s. Due to underinvestment in the housing sector under the earlier principle of ‘production first, consumption second’, housing in the inner city of Beijing was characteristically of low quality and high density.
With the advent of urban reforms aiming to raise Beijing as a ‘World City’,3 the city plan has designated the city centre to provide residents with better facilities or a larger living space. To do so, wholesale clearance and renewal of substandard residential areas were initiated in the 1990s in the old city or inner suburbs, where the old houses, built 30 years ago, were mostly located.
In some urban renewal projects, almost half of the development funds were used in order to provide new houses for affected local families, delaying the process of inner-city renewals, especially in overcrowded areas. As analysed by Meng (2000), compensation fees for home/land acquisition made up 49.3 % of total investments in inner-city upgrading projects, as against a much lower 16.0 % in the suburban areas. Since 1998, renewal programs proceeded in concert with housing reform, with the introduction of cash subsidies as the main compensation method to abate the resettlement costs and speed up renewals. Despite the higher cost of compensation, dispersing inner-city population to the suburbs was still preferred, as profits gained from the intensified redeveloped areas could well offset expenses (Ye and Gao 2003). For instance, in 2002, when Beijing began the noted renewal of the Nanchizi Area, close to the Forbidden City, 70 % of the 1,000 households were rehoused to Shaoyaoju at the north-western 4th Ring Road whilst the remaining 30 % were resettled in situ (Nan 2003). A survey on Beijing’s Economic Housing showed that the dislocated residents had spent 6 months to 3 years in temporary accommodation, by renting or staying in relative’s homes, before moving to their new apartments.
Table 6.6 depicts Beijing’s home demolition and resident dislocation during the past two decades. The areas and households affected by redevelopment projects during the 2000s were significantly larger than those from 1991 to 2000. The new policies of monetary compensation and resettlement, introduced since 1998, have had some negative impact on the low-income residents.
Houses dismantled and local families affected in the urban renewal processes in Beijing’s inner cities and suburbs, 1991–2010
Floor area (million sq. m.)
Floor area (million sq. m.)
Firstly, the fast paced wholesale clearance had affected so many residents that the municipal government was unable to resettle all of them. The resettlement policies amended in 1998, 2000 and 2001 were disadvantageous to residents living in one-storey buildings and traditional hutong houses, since cash compensation covered only the building cost, disregarding housing traits or residents’ needs (see Table 3.2