Heterogeneous Local Policy Responses to Housing Market Regulation: An Interpretive Framework and Evidence from 177 Chinese Cities

Housing market regulation is a regular policy tool globally while it manifests uniqueness in China at the meantime. Chinese state government has initiated a number of constrained policies on housing market since 2011 and the policy intensity changes from time to time. Most notably, a wide range of differences can be witnessed within the housing regulation policy content across cities. Noticing that past research efforts have focused on the multifold consequences of regulation policy, it’s necessary to explore the heterogeneous local responses to housing market regulation, and the underlying reasons. This paper establishes a framework to interpret the variation of housing regulation policy across cities, including enabling factors, constraining factors and the balance of the two. An index ‘regulation policy intensity’ is proposed to measure to what extent local policy intervenes local housing market. Text analysis and regression examination are explored to achieve the above research goals. The results show that: under the risk of economic downturn, a city doesn’t tend to propose high-intensity restriction policy when its finance heavily depends on land revenue. Cities with higher house price growth rate, higher housing-price-to-income ratio, higher real estate investment accounts and named by the central government to regulate housing prices are more likely to propose stricter regulation policy content. These factors relate to the external pressure a city faces in its decision making. The differentiated local regulation policy intensity reveals the compromised outcome of local government between political pressure and development risk.