Determinants of China’s land supply for affordable housing: A city-level analysis

China’s booming housing market and the resultant skyrocketing housing prices in Chinese cities during the past decade have led the Chinese government to step up its effort to provide indemnity housing for low- and middle-income households. Despite the central government’s renewed policy focus on low-income housing, the real pace of low-income housing program in urban China has been too sluggish to achieve its intended objective. Based on a panel dataset of land supply in Chinese cities at prefectural level and above between 2009 and 2013, we in this paper examine the political-economic determinants affecting local governments’ commitment to affordable housing land supply. The empirical findings identify a significant negative relationship between urban governments’ reliance on land finance and the share of residential land supplied for affordable housing. Cities with strong fiscal capacity were likely to reserve more land for indemnity housing, while increasing fiscal autonomy with reduced reliance on central transfer tended to undermine local governments’ incentive to provide affordable housing land. Geographically, cities in inland area with low demand for affordable housing were more willing to supply land for such purpose. The study suggests that the project of indemnity housing provision in urban China cannot be successfully implemented unless local governments’ vested interests in landed property are weakened. Copyright © 2017 3rd International Conference on Public Policy (ICPP).