Inclusionary Housing in China: Achievements and Challenges

Faced with a large national quota for low-income housing coupled with severe budgetary constraints, local governments in China have recently embraced inclusionary housing as a new strategy to achieve housing affordability and social and spatial inclusion.  Yet, inclusionary housing in China is complicated by the strong role of the central government in housing policy, the state ownership of urban land and local governments’ right to lease land, and a private sector that historically had little role in the provision of low income housing.  This paper evaluates inclusionary housing in the Chinese context, asking: 1) Has inclusionary housing achieved social and spatial inclusion? 2) What are its social, economic and political costs and benefits?  3) What kind of mechanisms needs to be in place to make it successful and sustainable?  Field work in Beijing shows while inclusionary housing in China is producing a large number of new units due to the strong government mandate, it does not result in increased social and spatial inclusion.  As a result, the policy further deepens patterns of spatial marginalization of low-income residents to the urban fringe, increases transportation costs and decreases access to employment opportunities.  The government is the main beneficiary of inclusionary housing, while developers and residents have few benefits but face challenges in property management and daily life.  We argue that that the inclusionary housing policy in China has to be reformed to be sustainable, with a better incentive system to encourage the active participation of private developers and a better policy design and implementation to facilitate social and spatial inclusion.