The goal of this paper is to evaluate the level and examine the dynamics of housing consumption and residential crowding in urban China almost a decade after the housing reform was launched. I argue that housing consumption and residential crowding are affected not only by demographic and socio-economic factors, as they are in market economies, but also by institutional factors that are unique to China because of the dualism in housing reform. Using a 1996 national survey, I find that the level of housing consumption is still low and residential crowding is common. A room of one's own continues to be a dream for most Chinese. However, Chinese households now have more control over their housing, and their housing behaviors are beginning to share similarities with the West. For example, life cycle, household income, housing tenure, and city size have similar effects on housing consumption and residential crowding as they do in Western housing markets. It is still clear, however, that the socialist institution—the hukou system—continues to influence housing consumption, although to a lesser extent than in the prereform period. Households with rural or temporary hukou are at a disadvantage in the housing market, in the sense that they occupy less spacious housing and suffer more from residential crowding than do those with urban and permanent hukou. Yet, these last are more constrained by institutional variables such as job and work-unit characteristics, which affect housing consumption differently across cities.
The downside of marketization: A multilevel analysis of housing tenure and types in reform-era urban China