Changing Roles of the State in the Development of Long-term Rental Apartments under a Transitional Housing Regime in China

Keywords: Long-term Rental Apartments, state-owned enterprises, private rental sector
Abstract Type: Paper Abstract

Abstract

The rapid growth of the private rental sector (PRS) worldwide is largely driven by the soaring demand from the younger generations and lower-income households. Nonetheless, the state-capital nexus that shapes the private rental market should not be overlooked. In recent years, Chinese megacities have seen a boom and bust of Long-term Rental Apartment (LRA) development, which is largely facilitated by the state intervention in the PRS and the new leveraged investment channels introduced by the state. Drawing on the state initiatives on land, housing and financial market for LRA development, which attracted the active involvement of institutional investors, this study focuses on the changing roles of the state and emerging institutional investors in different stages of LRA development under proactive state intervention. The contributions of this study are three-fold. First, this study unravels the highly responsive and effective state strategies in coping with the housing crisis and retaining social stability through an intensive intervention in the PRS. Second, this work sheds light on the deep involvement of state-owned enterprises (SOEs) in developing LRAs and finds that the state has been playing an increasingly important role in long-term rental markets to introduce a profound transition from market-led to state-led LRA development. Third, the findings enrich the conceptual understanding of the transitional housing regime in urban China that has shifted from a productivist regime to a developmental regime.