Emerging Consumer Cities - Mixed land use, amenities and housing prices in Shanghai

Abstract

This research quantitatively studies how mixed land-use planning impacts the housing prices in Shanghai. To answer the question, I collected data and constructed a database on housing price and land use to measure the impacts of urban amenities and mixed land-use on housing prices in Shanghai. This work makes an important empirical contribution to existing studies in the field of consumer city, mixed land-use, valuation and housing prices, and the on-going debate on land market reform in China. This study provides a key quantitative analysis of the efficiency of current land use structure in Shanghai and the level of willingness-to-pay for mixed land-use. This can shed light on a major policy debate about land efficiency in China, including Shanghai, and the land market reform which has been a key policy under the current administration. Based on the analysis, an oversupply of industrial lands intended to attract foreign investors and an inefficient public land market is found to have attributed to the distortion of land structure in China. This research quantifies the impact of land use pattern on housing prices and proposes improvements in land use planning. In terms of methodology, this research applies multiple regression models in addition to the traditional hedonic models, in the estimation of willingness-to-pay for mixed land-use or amenities. Based on the analysis of first-hand collected land use and housing price data of Shanghai, this study provides estimates for the land use’s impact on housing value and offers policy considerations on efficient land use. The 2013 China’s Third Plenum of the 18th Congressional Conference has highlighted optimizing land use structure and city’s physical structure as a major reform objective; however, so far there has been limited quantitative studies that assess the relationship between land use patterns and housing prices in China, which reflects the lack of and the difficult access to related data. Using a novel dataset, the analysis produces a variety of quantitative results. One estimate is that one percent more land use in greenspace in a 500 by 500 meters grid attributes to an increase of RMB6,600 in property value. Similarly, having one percent more land use in shophouse and shopping center in such a grid also elevates property values, by RMB5,900 and RMB7,900 respectively. The results drawn from Shanghai can serve as a good starting point to understand other cities in Yangtze River Delta economic zone – China’s most vibrant economic agglomeration. The empirical and methodological framework developed in this study can be generalized in future research and applied to other cities.