Online publication date: 10 June 2010

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1 This article was downloaded by: On: 5 October 2010 Access details: Access Details: Free Access Publisher Routledge Informa Ltd Registered in England and Wales Registered Number: Registered office: Mortimer House, Mortimer Street, London W1T 3JH, UK International Journal of Housing Policy Publication details, including instructions for authors and subscription information: Consumption and Tenure Choice of Multiple Homes in Transitional Urban China Youqin Huang a ; Chengdong Yi b a Department of Geography and Planning, State University of New York, Albany, NY, USA b Department of Urban and Real Estate Management, Central University of Finance and Economics, Beijing, PRC Online publication date: 10 June 2010 To cite this Article Huang, Youqin and Yi, Chengdong(2010) 'Consumption and Tenure Choice of Multiple Homes in Transitional Urban China', International Journal of Housing Policy, 10: 2, To link to this Article: DOI: / URL: PLEASE SCROLL DOWN FOR ARTICLE Full terms and conditions of use: This article may be used for research, teaching and private study purposes. Any substantial or systematic reproduction, re-distribution, re-selling, loan or sub-licensing, systematic supply or distribution in any form to anyone is expressly forbidden. The publisher does not give any warranty express or implied or make any representation that the contents will be complete or accurate or up to date. The accuracy of any instructions, formulae and drug doses should be independently verified with primary sources. The publisher shall not be liable for any loss, actions, claims, proceedings, demand or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with or arising out of the use of this material.

2 International Journal of Housing Policy Vol. 10, No. 2, , June 2010 Consumption and Tenure Choice of Multiple Homes in Transitional Urban China YOUQIN HUANG * & CHENGDONG YI ** * Department of Geography and Planning, State University of New York, Albany, NY, USA, ** Department of Urban and Real Estate Management, Central University of Finance and Economics, Beijing, PRC Abstract As China is becoming a country of homeowners, multiple homeownership is emerging. The existing literature on tenure choice focuses on the primary home and the literature on the consumption of multiple homes focuses on second homeownership only. We argue that decisions regarding whether to have multiple homes and what kind of tenures to have for multiple homes are all part of the complex decision-making for the housing portfolio, thus have to be understood together. With a conceptual framework that features both socio-economic and institutional determinants and 2005 China General Social Survey data, this paper studies the patterns and tenure dynamics of multiple homes in urban China. While life-cycle, affordability and generational transfer contribute to the consumption and tenure decision of multiple homes, the persisting household registration system and continuing allocation of subsidised housing lead to the peculiar tenure combination of renting one home and owning additional homes, and living in public housing and owning additional homes. Key Words: Homeownership, multiple homes, tenure choice, China Introduction China has experienced probably one of the most dazzling housing success stories in the last two decades, with unprecedented improvement in housing consumption and homeownership. Before 1988, the majority of urban households in Chinese cities lived in public rental housing, and housing shortage and residential crowding were acute (Huang, 2003, 2004). Yet, the housing reform in the last two decades has profoundly changed housing provision and consumption, and private homeownership has been encouraged. As a result, the rate of homeownership in Chinese cities has increased from 20 per cent in the 1980s to more than 82 per cent in 2007, and per capita living space has increased from 4 to 28 m 2 (Huang & Clark, 2002; Huang, 2004; Zheng, 2007). 1 With rapidly rising income and high return on real estate investment in the Correspondence Address: Youqin Huang, Department of Geography and Planning, State University of New York, Albany, New York 12222, USA. yhuang@albany.edu ISSN Print/ Online 10/ C 2010 Taylor & Francis DOI: /

3 106 Y. Huang & C. Yi recent housing boom, multiple homeownership is also emerging in Chinese cities, with about 12 per cent of urban households occupied (rent or own) two or more homes in 2005 (Huang & Yi, 2009). This is somewhat disturbing, as massive lowincome households in Chinese cities lack housing access and suffer severe housing crowding (Sato, 2005; Wang & Murie, 1999; Huang, 2005). With rapidly increasing housing inequality in Chinese cities (Huang & Jiang, 2009), the Chinese government is determined to address the problem of low-income housing with massive housing subsidies in the near future (State Council, 2007). A better understanding of the consumption of multiple homes can offer insights and help better policy design for low-income housing. Despite massive media coverage and anecdotal evidence, we know very little about multiple homes, and how they are related to the increasingly complex housing and tenure decision-making in Chinese cities. The existing literature on tenure choice focuses exclusively on primary home, and the literature on multiple homes focuses on the decision-making for second homes only, while the combined decision of whether to have multiple homes and what kind of tenures to have is still very much unknown. It is the goal of this paper to understand the pattern, tenure structure and the decision-making of multiple homes in Chinese cities. Scholars have been using primary home and second home to refer to the different homes that households have. In general, primary home is defined as a property that a household lives in most of the time, while second home is defined as a property (owned or leased) serving as the occasional residence of a household that usually lives elsewhere often for leisure-related activities (Coppock, 1977). In this paper, because of the lack of information on the frequency of occupancy (whether it is for occasional use or not) or usage (whether it is for leisure/recreation/investment or primary residence), we cannot define primary home and second home in the same fashion. Instead, we have information about the current dwelling that households live in (own or rent) at the time of survey (which may be temporary), and whether they own additional homes elsewhere that they do not live in at the time of survey. If they owned additional dwellings elsewhere, they are considered to occupy multiple homes. Because of the way the question was asked in the survey besides this dwelling, do you own additional dwellings elsewhere? they may own or rent current housing, but can only own additional homes. Thus the tenure structure in Chinese cities now includes the following four types: rent a one and only home; own a one and only home; rent one home (current dwelling) and own additional homes; and own two or more homes. We use multiple home occupancy or multiple home consumption to refer to the last two groups, and multiple homeownership to refer to the last group. While the rich and noble in China have always owned more than one home in history (Feng & Liu, 2000), the massive multiple home consumption and ownership by emerging middle-class Chinese households is a new phenomenon mainly driven by the recent housing and economic reform. During the socialist era, housing stock in Chinese cities was dominated by public rental housing provided by municipal governments and work units. Urban households had few options but to wait in a long

4 Multiple Homes in Transitional Urban China 107 queue for the allocation of public housing, which was based on a set of non-monetary factors such as job rank, job seniority, marital status, household size and housing need (Huang & Clark, 2002; Wang & Murie, 1999). Due to extremely low rents and limited government investment in housing, there were acute housing shortage and residential crowding. Occupying multiple homes was generally impossible and politically not allowed. Since 1988, the Chinese government has launched housing reform nationwide to privatise the existing welfare-oriented housing system. In addition to raising rents and privatising existing public housing (through subsidised sale to sitting tenants, similar to the right to buy programme in the UK), developers are allowed to provide private housing called commodity housing (shang ping fang), which has become an increasingly large share of the urban housing stock. In 1998, the State Council (1998) officially declared the end of public housing provision to deepen the privatisation in the housing system. At the same time, homeownership has been promoted through various means, 2 which is a complete reversal of the elimination of private homeownership in the socialist era. As a result, the rate of homeownership in Chinese cities has surged to more than 80 per cent in 2007 in a short span of two decades, making China one of the countries with the highest rate of homeownership 3 (see Wang & Murie, 1999; Huang & Clark, 2002 for more details on housing reform). Thus the ongoing housing reform has brought more housing options to urban households and given them the freedom of housing choice. Urban households are able to choose their preferred housing type, tenure, and neighbourhoods, which has increased residential mobility, and resulted in household and neighbourhood sorting (Li, 2003; Huang & Deng, 2006; Huang, 2005). With increasing homeownership, rapidly rising income and changing life styles (with higher private auto ownership, more leisure time and a faster pace of urban life), multiple homeownership similar to the West is emerging in China. Yet, it also emerges from the transitional housing system which still endures the socialist legacy. First, despite the end of public housing provision in 1998 (State Council, 1998), resourceful work units such as major universities and government ministries continue to provide subsidised housing (rental or owned) to their employees. It is not uncommon for people like professors and government employees to live in subsidised rental housing close to their workplace (and other services such as schools) for convenience, and own another home in the same city for occasional use or investment. In other words, households can still access subsidised housing even if they can afford or have already purchased private housing on the market. In addition, subsidised housing in the owning sector often offers partial property rights, 4 which constrains households from freely disposing of their housing. Second, the household registration (hukou) system, 5 one of the most important institutions that defines a person s socio-economic status and access to welfare benefits, continues to favour urban residents with nonagricultural hukou registered locally, while migrants with hukou (agricultural or nonagricultural) registered elsewhere are severely constrained in accessing subsidised housing, education and medical services

5 108 Y. Huang & C. Yi (Cheng & Selden, 1994; Chan, 1996; Wu, 2002). Thus, despite long-term living and working in cities, most migrants build/own houses back home for their potential return. Furthermore, good infrastructure and services are not distributed evenly across the space. In particular, superior public schools are becoming an important factor for people to buy/rent another dwelling so that their children can attend good schools nearby. All these factors encourage the rapid growth of multiple home consumption and ownership in Chinese cities. Yet, we know very little about multiple homeownership. The existing literature on tenure choice focuses on primary home only, and the literature on second home focuses on whether households own second home, and has focused on leisure/recreation as the main driving force for a second home. Because the decisions-making for different homes are not, on the one hand, necessarily in time order, and, on the other, they affect each other, we argue that decisions regarding whether to have multiple homes and what kind of tenures to have for them are all part of the complex decisionmaking for a housing portfolio. Thus, instead of examining the ownership of second home, the consumption and tenure choice for multiple homes have to be understood together. In this paper, we aim to understand the patterns and dynamics of tenure choice for multiple homes in Chinese cities. The rest of the paper is organised as follows: after a literature review, we will provide a conceptual framework to understand the consumption of multiple homes in Chinese cities. Then an empirical analysis will be conducted to test hypotheses, followed by conclusions and policy implications. Literature Review There is not much research on the consumption of multiple homes per se. Yet, this research is related to two different but associated bodies of literature: literature on tenure choice and second homeownership. Research on tenure choice in market economies often includes two main approaches: the economic and the socio-demographic perspective. Assuming households are economically rational, housing economists argue that households choose a certain type of tenure to maximise utilities within a given budget constraint (e.g. Arnott, 1987). In this approach, homeownership is a consumption and an investment decision by households in competitive housing markets. So economic factors such as income, assets and relative prices are considered as the most important factors affecting tenure choice (e.g. Henderson & Ioannides, 1983, 1985, 1987; Plaut, 1987), while demographic factors are considered to affect tenure choice through changing socio-economic status only and not through the life cycle per se (Kendig, 1984; McCarthy, 1976). In contrast, demographers, geographers and sociologists argue that tenure choice is a complicated event that is intrinsically linked with characteristics of households and changes in the housing market (Clark & Dieleman, 1996). While recognising the importance of income and the housing market, they argue that demographic characteristics of households, such as age, family size and

6 Multiple Homes in Transitional Urban China 109 composition trigger events which occur during the life course, such as birth of children and marriage, are significant factors affecting tenure choice (Clark et al., 1996; Deurloo et al., 1994; Morrow-Jones, 1988). When combined, these two approaches generally offer a good understanding of the tenure decision; yet, they tend to ignore the role of the state and other institutions in tenure decision. In comparison, research on tenure choice in Chinese cities is limited, although expanding rapidly. This is because most Chinese urban residents were not given the freedom of tenure choice until 1988, when the housing reform was launched nationwide after trials in a few cities. At the same time, systematic data on housing have not been available to the public until recently, and scholars have relied on various small-scale surveys. 6 Existing research focuses on the persistent role of socialist institutions on tenure decision due to the partial reform, while household characteristics and housing markets are beginning to play their roles (e.g. Li, 2000, 2003; Huang & Clark, 2002; Huang, 2004; Zheng, 2007; Yi, 2005). It is often argued that households with higher political status (e.g. high job seniority, high job rank, party membership), affiliated with powerful/resourceful work units, and those with urban household registration are more likely to own. There are also different types of homeownership, as public housing is often sold with partial property rights while private housing is sold with full property rights, and tenure decision is somewhat different in the public and private housing sector (Davis, 2003; Li, 2000). Using retrospective data, scholars also study the actual event of tenure change from rental to homeownership. While life-cycle events such as the birth of a child are not important, change in marital status, Chinese Communist Party membership, high position in the Party, government organisations or state-owned enterprises, and job seniority encourage tenure change from rental to ownership (Huang, 2004; Li & Li, 2006; Li & Yi, 2007a). Zheng (2007) also studied tenure choice in China from the economic perspective. The second related body of literature is on second homeownership, yet it remains separated from the traditional housing research. Since Coppock s edited volume in 1977, most research on second home derives from leisure and tourism studies, rural studies, and planning and cultural studies (Coppock, 1977; Gallent et al., 2005; Hall, 2005; Hall & Muller, 2004; Hettinger, 2005). Owning a second home is often considered to facilitate households leisure/recreational activities, and to compensate services that their primary home lacks (Davies & O Farrell, 1981; Tress, 2002). Second homes, especially those in a foreign environment, also offer households an opportunity to escape from their everyday routine (Chaplin, 1999). Rising disposable income, widespread car ownership, changing lifestyle, retirement migration, counterurbanisation and growing dissatisfaction with the urban environment are considered reasons for the growing second homeownership (Coppock, 1977; Robinson, 1990; Butler, 1998; Paris, 2006). Investment is another important motivation for people to own second homes. Many scholars have argued that purchasing second homes is part of people s life-course planning and personal/family investment strategies (Coppock, 1977, Hall & Muller,

7 110 Y. Huang & C. Yi 2004; Gallent et al., 2005; Smith, 2005). Households social economic status, housing markets and macro-financial policies are considered as important factors. With growing mobility (both personal and of financial assets), there has been a massive expansion of leisure-related investment and consumption (Forrest, 2005). Furthermore, with increasing globalisation and rising transnationalism, there has been an increasing share of population who live and/or work in two or more places. Improved access to transportation and communication due to globalisation facilitates second homeownership (Kaltenborn, 1998). Regional disparities in economy and housing market also encourage second homeownership, especially cross-border second homeownership, such as Hong Kong residents owning a second home in mainland China (Hui & Yu, 2009). The high transaction cost and long duration in housing traction also contribute to ownership of multiple homes (DiPasquale & Wheaton, 1996). Despite the rapid growth, the phenomenon of multiple homes in China is still at its early stage and research has been sketchy. Increasing social stratification, paid leisure time, change in life-style, and the recent housing reform all drive the development of multiple home phenomenon (Feng & Liu, 2000). Feng and Zhou (2004) found about 23.7 per cent of households in Beijing occupied multiple homes in 2002, while Huang and Yi (2009) found about 12 per cent of all urban households in China had multiple home occupancy in The most important reason for people to own additional homes is housing allocation from the work-unit (26.6 per cent), followed by additional homes close to the workplace (21.9 per cent), unsatisfactory living environment of the first residence (20.7 per cent), inheritance from parents and relatives (14.2 per cent,), investment (7.1 per cent) and housing subsidies from work units during housing reform (9.5 per cent). In Haikou (Hainan Island), which has experienced a speculative real estate boom, multiple home consumption emerged in a real estate burst, and was actively promoted by the local government as a strategy to stabilise the housing market (Wang, 2006; Xia, 2001). Yet, holiday-oriented second homes are emerging in resort cities such as Haikou and Sanyan on Hainan Island and in big cities, including Beijing (Xu & Bao, 2006a, 2006b; Wang, 2006; Feng & Zhou, 2004). Research on the relationship between primary and second homeownership is very limited. Zhu (2009) argues that owning a second home does not necessarily reduce the consumption of primary homes, as owning a second home is considered one way of improving housing consumption, while Belsky et al. (2006) argue the opposite. This paper attempts to contribute to the literature by examining the combined consumption of and tenure decision-making for multiple homes. A Conceptual Framework Due to the transitional nature of the housing system in Chinese cities, households are constrained by a different set of factors from the West, thus their housing decisions have to be understood in a different conceptual framework (Figure 1). First of all,

8 Multiple Homes in Transitional Urban China 111 Figure 1. The conceptual framework for the consumption and tenure choice of multiple homes. we argue that decisions regarding whether to have multiple homes and what kind of tenure to have for multiple homes have to be understood together as they are closely intertwined. After years of housing reform, there has been a range of housing options for different strata of households, including cheap rental housing (lian zu fang) and public rental housing with heavy subsidies, privatised public housing, economic housing (jingji shiyong fang) and housing with controlled prices and sizes (liang xian fang) that is private housing but with housing subsidies, various commodity housing by developers, and private housing by individual homeowners. 7 On the one hand, how households access their housing often determines their tenure decision. For example, if households can access cheap rental housing or public housing by work units, they usually can only rent, while households can only own if they access economic housing, housing with controlled prices and sizes, and most commodity housing (State Council, 1998, No. 23) 8. However, how households access their housing can also affect their decision regarding whether to have an additional home. For example, university and government employees living in public rental housing that is not allowed to be purchased (the so-called transit housing or zhou zhuan fang) often purchase additional homes on the private market to enjoy homeownership and housing appreciation while living in subsidised housing. It is even common for people to buy their second home first and then rent/buy their primary home. Thus the decisionmaking for primary and second home is not necessarily ordered temporally, and they need to be examined together. Thus, instead of the binary option of owning and renting, there are in fact four options for households to choose from: renting a

9 112 Y. Huang & C. Yi one and only home; owning a one and only home; renting one home and owning additional homes; or owning two or more homes. The tenure options are even more complicated if we consider the source of housing (pubic vs. private) and type of property rights (full vs. partial property rights). Next we argue that tenure choice of multiple homes in Chinese cities is constrained by both socio-economic and institutional factors. After years of housing and economic reform, the housing stock has been privatised and a housing market is emerging. According to the 2005 Population Survey (1 per cent) conducted by the State Statistic Bureau, only 8.1 per cent of urban households live in public rental housing, and 24.4 per cent live in privatised public housing, while the rest (two-thirds of urban households) live in various types of private housing. Thus it should not be surprising that life-cycle and affordability, two main factors for tenure and second homeownership in the West, are important in Chinese cities. We hypothesise that older and married people, and larger and better-off households, are more likely to own than rent, and they are also more likely to occupy or own multiple homes. Related to the life-cycle is the presence of school-age children and the uneven quality and distribution of public schools. Chinese households increasingly purchase/rent additional homes for their children to be able to attend superior public kindergartens and schools. Good education has traditionally been considered a main path for Chinese to move up the social ladder (Ho, 1962). With massive numbers of students fighting for very limited educational resources, many parents are determined to send their children to the best schools starting from kindergartens to help their eventual entry to the top universities. Thus they need to purchase (or rent) a home close to key kindergartens and schools so that they can avoid paying a large sum of money called an endorsement fee (zai zhu fei) or school selection fee (ze xiao fei), and their children can attend schools nearby. While some households have to sell their previous home in order to buy/rent houses near key schools, many maintain multiple homes either because they can afford to do so or they are constrained in selling their previous homes due to partial property rights. Thus, in addition to life-cycle, we believe the unique school system in China contributes to the phenomenon of multiple homes, and households with young school-age children are more likely to occupy multiple homes. Another important socio-economic factor for multiple homeownership in China is generational transfer. In traditional Chinese culture, old generations are more willing and more likely to pass their real estate on to or provide housing services for their children (Lee & Xiao, 1998). Since the housing reform, it is also common for parents to contribute a substantial amount of money (e.g. pay the down-payment) to help their children purchase housing. In Guangzhou, parental support, supplemented with personal savings, is a more important source of funding in home purchase than a mortgage (Lee & Xiao, 1998). Furthermore, when parents are in powerful positions that allow them to access subsidised housing, they often help their children access subsidised housing, and thus attain homeownership and even multiple homeownership.

10 Multiple Homes in Transitional Urban China 113 Thus we hypothesise that parents ability to access subsidised housing and achieve homeownership (financially and politically) has a positive effect on children s homeownership and multiple homeownership. Despite the profound reform, socialist institutions persist in the housing system, thus they continue to shape housing behaviour. For example, the household registration (hukou) system, although under reform, continues to be an important institution that prevents migrants with hukou registered elsewhere to access subsidised housing in cities (Wu, 2002; Cheng & Seldon, 1994). Even though many migrants have lived in cities for years, 9 they continue to be considered as outsiders. Together with other constraints, such as limited access to medical and educational services, migrants are forced to live a migratory life between destination cities and their home towns. Thus they are less likely to own dwellings at destination cities. Meanwhile, rural migrants continue to have access to collectively owned land in home villages for housing construction (zhai ji di) as they are still registered in villages, and urban migrants may be entitled to subsidised housing in their home cities. It is not uncommon for migrants to rent or own a dwelling at the destination, and own another at the origin. We hypothesise that migrants with temporary hukou at the destination city are less likely to own than rent their homes in the cities, but are more likely to occupy multiple homes. In contrast with migrants disadvantaged position in the housing system, people with high political status such as those with high job rank and Chinese Communist Party membership continue to enjoy privileges in the transitional housing system (Huang & Clark, 2002; Li, 2003). Since Victor Nee s market transition theory (1989), there has been a debate regarding the importance of political/redistributive power to socio-economic attainment in transitional economy (e.g. Walder, 1995; Szelenyi, 1983; Szelenyi and Kostello, 1996; Bian & Logan, 1996). In contrast to Nee s hypothesis that political/redistributive power is gradually replaced by market mechanism (Nee, 1989), many scholars found the persistency of political power in resource access and allocation such as housing consumption (e.g. Logan et al., 1999; Li, 2000; Huang & Clark, 2002; Huang, 2004; Li & Li, 2006; Huang & Jiang, 2009). Here we extend the debate to the consumption of multiple homes. We hypothesise that people with higher political status (measured with high job rank and party membership) are more likely to own than rent, and more likely to occupy/own multiple homes. Furthermore, despite the fact that the State Council announced the end of public housing provision in 1998 (State Council, 1998), resourceful work units continue to provide subsidised housing (rental or owned) to their employees. These subsidised housing also means convenience to many households, as they are often located close to the workplace and/or schools. Thus it is common for people to own or rent subsidised housing and own additional homes from the private market. According to Feng and Zhou (2004), housing allocation from work units is the most important reason for people to own multiple homes. Furthermore, subsidised housing in the owning sector often offers partial property rights, which usually constrain households from

11 114 Y. Huang & C. Yi disposing of their housing freely. Thus we hypothesise that people affiliated with resourceful work units such as high-ranking work units, party/government organisations, and state institutions are more likely to own than rent, and more likely to occupy/own multiple homes. In summary, the dynamics for the consumption and ownership of multiple homes in Chinese cities are shaped by both socio-economic factors that are consistent with the Western convention and institutional forces that are unique to China such as the hukou system, the socialist housing allocation system, and the continued provision of subsidised housing by work units. In the following section, we will empirically test above hypotheses. Empirical Analysis The China General Social Survey (CGSS) 2005 is a national questionnaire survey conducted by the Department of Sociology at Renmin University and the Survey Research Centre at the Hong Kong University of Science and Technology ( websosc/survey/gss e.html). Based on the 2000 census data, the CGSS used a stratified, multi-stage probability sampling technique (district/county street, town/township residents committee/village committee household), and it sampled 10,000 households in 26 provinces and cities. Since the housing system in rural areas is different from that in urban areas, 10 we focus on the urban sample and exclude suburban farmers who have agricultural hukou registered locally as they can access collectively owned land for housing construction. We also excluded those whose occupations are in agriculture. The interviewees are treated as household heads for the following housing analysis. The final sample has 5,705 observations. In addition to basic socio-economic information, the survey also collects information on current housing, such as tenure, floor size, housing structure, year of construction and housing price/rent. Furthermore, it asks whether the household owns additional homes with partial or full rights elsewhere, and the number, floor size and value of any additional homes. Thus CGSS 2005 gives us a good opportunity to study multiple homeownership. Descriptive Analysis After years of housing reform, the rate of homeownership in Chinese cities is very high, and the rate of multiple homeownership is also fairly high. In 2005, only 17.4 per cent of urban households in China rented a one and only home, 70.4 per cent owned a one and only home, 5.1 per cent rented one home and owned additional homes, and 6.2 per cent owned two or more homes (Figure 2). In other words, more than 11 per cent of all urban households (migrants included) occupied two or more homes (rented or owned), and about 83 per cent of all urban households owned at least one home (including owned homes elsewhere). While the majority of households

12 Multiple Homes in Transitional Urban China 115 Figure 2. Tenure structure in Chinese cities, (88 per cent) who occupy multiple homes only have two, about 12 per cent occupy three or more homes. This paints a very different picture from the housing consumption in the 1980s when the rate of homeownership was about 20 per cent and few if any households occupied multiple homes. The tenure structure is even more complicated when we consider the source of housing (Table 1). Among those who had only one home, more households lived in public rental than private rental (10.8 per cent vs. 6.5 per cent); yet, much more homeowners had full property rights than partial property rights (58.7 per cent vs per cent). This shows a higher degree of privatisation in the owning sector than in the rental sector. Among those with multiple homes, it is interesting to note that households living in public rental (1.2 per cent) and owned homes with partial property rights (0.8 per cent) owned additional homes. In other words, recipients of housing subsidies occupied multiple homes, which would not be expected in the West. In comparison, more households in the private sector (rental or owning) owned additional homes (3.8 per cent and 5.4 per cent). According to Table 2, older and married people, and larger households were more likely to own than rent one home. But people who rented one home and owned additional homes are the youngest (mean age 35.1), most likely to be single, yet have the largest households. This is probably due to young migrants who are single but

13 116 Y. Huang & C. Yi Table 1. Housing consumption considering the number of homes, tenure, and housing. Housing type % One home Public rental 10.8 Private rental 6.5 Owned with partial property rights 11.8 Owned with full property rights 58.7 Others 0.8 Multiple Homes Public rental and owned additional homes 1.2 Private rental and owned additional homes 3.8 Owned with partial property rights, and owned additional homes 0.8 Owned with full property rights, and owned additional homes 5.4 Others, and owned additional homes 0.3 Total Source: Calculated by authors using 2005 CGSS. count family members back home as part of their household size. While the median household income in 2004 for owners and renters were the same, the mean income and standard deviation for owners were higher, indicating a wider income range for homeowners. People who owned multiple homes clearly had higher household income (median 24,500 and 30,000 yuan) than those who had only one dwelling. Migrants temporary hukou status continues to be an important constraint for their housing consumption and housing choice. Both urban and rural migrants (migrants with nonagricultural and agricultural hukou registered elsewhere, respectively) were much less likely to own one home than local urban residents (28.8 per cent and Table 2. Household s socio-economic indicators by tenure. Rent one Own one Rent one home, Own two and only and only own additional or more Total home home homes homes Total N Mean age Household size (persons) Marital status (%) Single Married and others Household income in 2004 (yuan) Median Mean Std deviation Source: Calculated by authors using 2005 CGSS.

14 Multiple Homes in Transitional Urban China 117 Table 3. Tenure structure by interviewee s hukou status. Rent one Own one Rent one home, Own two and only and only own additional or more Total % home home homes homes Total N Urban migrants Rural migrants Local urban residents ,084 Others Total ,657 Source: Calculated by authors using 2005 CGSS per cent vs per cent) (Table 3). But migrants, especially rural ones, were much more likely to rent one home and own additional homes than local residents (24.4 per cent and 39.7 per cent vs. 2.3 per cent). This is related to their high mobility, but more importantly, their temporary hukou status in cities, which under the current hukou system constrains their housing access especially to subsidised housing, thus hinders their long-term settlement in cities. They are somewhat forced to own additional homes back home for their eventual return. There is a small number of better-off migrants who could afford to own multiple homes, and urban migrants were slightly more likely to do so than rural migrants. Despite three decades of market transition, people s political power continues to be important in housing access and tenure choice. According to Table 4, people with high administrative rank, high technical rank and people with Chinese Communist Party (CCP) membership are more likely to own one unit, or own multiple homes than those with no rank or party membership. For example, 77.0 per cent of those with deputy chu (fu chu ji) 11 or higher administrative rank owned one unit, and 11.0 per cent owned multiple homes, compared with only 67.8 per cent and 6.2 per cent of those with no rank. In addition, 75.3 per cent party members owned one unit, 8.9 per cent of them owned multiple homes, while less than 70 per cent of nonparty members owned one unit, and only 5.8 per cent of non-party members owned multiple homes. CCP members seem to still hold privileged position after almost three decades of reform. Furthermore, the type of work units is important to the consumption and tenure decision of multiple homes. People who are affiliated with party/government/state institutions (dang zheng jiguan, shiye danwei) and those in state-owned enterprises (SOEs) were less likely to rent a one and only home and more likely to own homes than those in private/group enterprises and joint-venture/foreign companies (Table 5). While the latter were more likely to rent one home and own additional homes, the former were more likely to own one and only one home. In particular, those in party/government/state institutions and SOEs in monopoly industry below provincial level were more likely to own multiple homes.

15 118 Y. Huang & C. Yi Table 4. Housing tenure by interviewee s political status. Rent one and Own one and Rent one home, own Own two or Total % only home only home additional homes more homes Others Total N Administrative rank Deputy Chu & higher Ke ji & lower No rank Not applicable Technical rank Advanced & higher Middle & basic No rank Party membership Yes No Total Source: Calculated by authors using 2005 CGSS. Chi-square test significant at level.

16 Multiple Homes in Transitional Urban China 119 Table 5. Housing tenure by interviewee s work unit. Rent one and Own one and Rent one home, own Own two or Total Work-unit type (%) only home only home additional homes more homes Others Total N Party/government/state institutions at central or provincial level Party/government/state institutions below provincial level SOEs in monopoly industry at central or provincial level SOEs in monopoly industry below provincial level SOEs in non-monopoly industry Private/group enterprises Joint ventures/foreign company Collective-owned enterprises Total Source: Calculated by authors using 2005 CGSS.

17 120 Y. Huang & C. Yi In summary, the consumption and tenure choice of multiple homes are related to both socio-economic factors such as age, marital status, household size and household income, and institutional factors such as hukou status, job rank, party membership and work-unit type. The above descriptive analysis generally supports our hypotheses. Models To statistically test our hypotheses, we conduct multiple binary logistic regressions on different types of tenure combination (rent a one and only home, own a one and only home, rent one and own an additional home, own multiple homes). The independent variables include three sets. The first set is socio-economic variables, including household head s age, age 2, marital status, education (in years of schooling), occupation, household size, household s income in 2004, whether household has school-age children (<13), 12 and a dummy variable indicating whether parents are heads (in their work units) or not (based on parents occupation). The last variable is included with the assumption that parents in head positions have better access to housing, who may transfer their housing to their children or facilitate their children s housing access and homeownership. Yet parents income/wealth is not available in the dataset, thus the test for generational transfer hypothesis is limited to parents political power. These variables are used to test the life-cycle hypothesis, affordability hypothesis and generational transfer hypothesis. The second set of independent variables are institutional variables, including interviewee s hukou status, party membership, job rank (administrative and technical), and work-unit type. Due to small frequencies for people with high administrative rank, the different levels of administrative rank are combined, with a dummy variable indicating whether people have administrative rank or not. Spouse s occupation (head or not in their work unit) is also included as a household may access subsidised housing through spouse s work units thus spouse s political status is important too. These variables aim to test the hukou hypothesis, power conversion hypothesis and work-unit hypothesis. Furthermore, region (eastern, central and western) and city size (municipalities and provincial capitals vs. other cities) are included to control contextual effects of local housing markets and housing policies. Descriptive statistics for independent variables are listed in Table 6. Regression results are listed in Table 7 and the models are significant. First of all, married, larger and better-off households were more likely to be homeowners in any of the three tenure combinations (own a one and only home, rent one and own additional homes, own multiple homes) than renting a one and only home, supporting the life-cycle and affordability hypothesis. People who themselves or whose parents are in leading positions were more likely to own multiple homes than renting a one and only home, supporting the affordability and generational transfer hypothesis. Surprisingly, education was not significant, although coefficients had positive signs. Second, migrants (urban and rural) were much more likely to rent one home and own additional homes, but less likely to own one or multiple homes than renting a one and

18 Multiple Homes in Transitional Urban China 121 Table 6. Descriptive statistics of independent variables in models. Mean Std dev. % Age Marital status Married and others Single Education (years of schooling) Occupation Head/manager 2.30 Professional Clerical worker Sales or service worker Manual worker Others & no employment Household size Households with children <13 years old Household income (1,000 yuan) Parents are in leading position in their work unit 3.30 Hukou status Local urban residents Urban migrants 5.60 Rural migrants 4.20 Administrative rank Have ranks 8.10 No rank or not applicable Technical rank Middle or higher rank Basic level rank 7.30 No rank or not applicable Spouse is head 1.70 Work-unit type Party/government/state institutions at central or provincial level 3.71 Party/government/state institutions below provincial level SEOs in monopoly industry at central or provincial level 3.28 SEOs in monopoly industry at below provincial level 5.17 SOEs in non-monopoly industries Private/group enterprises Joint ventures/foreign company 2.44 Collective-owned enterprises Region Eastern Central Western City type Municipality & provincial capital 43.40

19 122 Y. Huang & C. Yi Table 7. Coefficients from multiple binary logistic regressions on housing tenure (reference: rent one and only home). Own a one Rent one and Own and only own additional multiple home homes homes Socio-economic variables Age Age Marital status (reference: single) Education (years) Occupation (reference: manufacture workers) Head/manager Technician/professional Staff and clerical worker Service and sales worker Others & no employment Household size Household income in Parents are head (reference: no) Having children <13 years old (reference: no) Institutional variables Hukou (reference: local residents) Urban migrants Rural migrants Administrative rank (reference: no rank) Technical rank (reference: no rank) Middle or higher rank Basic level rank Spouse is head (reference: no) Party membership (reference: no) Work unit (reference SOEs in non-monopoly industry) Party/government/state institutions at central or provincial level Party/government/state institutions below provincial level SOEs in monopoly industry at central or provincial level SOEs in monopoly industry below provincial level Private/group enterprises Joint ventures/foreign company Collective-owned enterprises Contextual variable Region (reference: Eastern) Central Western City type (reference: others) Municipality and provincial capital Constant Sample Chi-square log likelihood Cox & Snell R square Nagelkerke R square

20 Multiple Homes in Transitional Urban China 123 only home. This strongly supports the hukou hypothesis. Surprisingly, administrative rank, technical rank, party membership and spouse s head position in their work unit were not significant; yet the signs of the coefficients indicate that people with high job ranks seemed to be more likely to rent a one and only home, while party members and those with a spouse in head positions are more likely to be in any of the three types of ownership than renting a one and only home. These results only weakly support the power conversion hypothesis. The effect of work units is not significant either; yet, people in party/government/state institutions, SOEs in monopoly industry below provincial level, and private/group and collective enterprises were more likely to own multiple homes (positive coefficients) than those in SOEs non-monopoly industry. Furthermore, households in central and western China are more likely to own one home, and rent one and own additional homes than renting a one and only home, yet they are less likely to own multiple homes than those in eastern China. This shows that it is relatively easy to achieve homeownership in central and western China probably due to lower housing prices than eastern China. Yet, multiple homeownership is higher in the eastern region as wealthy households who can afford multiple homes are concentrated in that area, where economic growth is the fastest. In addition, households in municipalities and provincial capitals were less likely to have any of the three types of ownership than renting a one and only home, probably due to higher housing prices in large cities. Conclusions and Policy Implications China is becoming a nation of homeowners with more than 80 per cent of urban households owning their homes and almost universal homeownership in the countryside. Due to the transitional nature of the housing system, tenure structure in Chinese cities is very complex, with rental in both the public and private sector, and homeownership with full and partial rights. The emerging multiple home consumption and ownership further complicates the tenure structure in transitional Chinese cities. We argue that the number of homes households have and the tenure of their multiple homes are two intertwined and inseparable decisions that make up their housing portfolio. Thus, instead of studying tenure choice of primary home and whether households own second homes separately, as most existing housing studies do, this paper attempts to understand the patterns and tenure choice of multiple homes in Chinese cities. We proposed a conceptual framework that features a dual mechanism of consumption and tenure decision of multiple homes with both socio-economic and institutional determinants. Hypotheses on the effect of the life-cycle, affordability, generational transfer and the effect of the hukou system, work units and political status are derived from the framework, which are then tested through the empirical analysis. Using the 2005 China General Social Survey, the empirical analysis shows that more than 11 per cent of urban households occupied (rent or own) multiple homes