The institutionalisation and financialisation of rental housing in China : a spatio-temporal fix under state entrepreneurialism

Abstract

Recent years have seen a surge of institutional investors entering the private rental sector globally, largely facilitated by deregulation policies and newly leveraged investment channels in the neoliberal era. Similarly, in China, institutional investors have flocked into the rental sector to develop long-term rental apartments (LRAs), mainly enabled by supportive state initiatives and new financial instruments in the rental sector, such as rental loans, corporate bonds, and REITs. However, how these emerging institutional investors are reshaping China’s rental housing system and urban landscape remains largely unexplored. Moreover, how financialisation serves as a (neo)liberal market instrument to facilitate urban (re)development has not been well documented, especially from the perspective of the emerging LRA market in China. This thesis uses Beijing as the case study area, a pioneer in the development of LRAs and where the rental sector plays a significant role in housing millions of tenants. Drawing on theories of spatio-temporal fix, state entrepreneurialism, housing regime and financialisation, and employing policy anthropology and field investigation, this thesis systematically examines the development of LRAs and finds that: (1) Two phases of LRA development are identified - market-led under state supervision and state-led - with highly responsive state intervention to cope with the housing affordability crisis and maintain social stability. (2) The state plays an increasingly important role in the rental sector, and the underpinned housing regime is shifting from a productivist regime prioritising economic gains to a developmental regime emphasising societal goals. (3) Diverse property stocks are renovated into LRAs as a spatial fix strategy to defer the crisis resulting from excessive capital accumulation in the housing sales market. (4) Financialisation is exploited as an effective political-economic tool to promote the development of LRAs, providing a temporal fix to the overaccumulation of capital and transferring the growing crisis within the real estate industry, but potentially generating new crises if not properly regulated. (5) The emergence of newly-built long-term rental communities (LRCs) in megacities stems from adaptive institutional innovations in the land and housing markets, where the state-led financialisation of rental housing functions as a deliberate state policy for addressing land scarcity and housing affordability crisis. (6) Both renovate-to-rent LRAs and build-to-rent LRCs reshape the urban built environment by revitalising derelict landscapes and promoting community life for young people, but they can also exclude low-income groups and exacerbate residential stratification and intra-generational socio-spatial inequalities. The contributions are mainly twofold: Empirically, it fills the gap in the literature on how institutional investors are reshaping China's rental sector and contributes to future policy-making to alleviate the housing affordability crisis, enhance tenure security and maintain social stability. Theoretically, it reveals a dynamic housing regime emphasising different socio-economic objectives at various development stages. It highlights the adaptive nature of state entrepreneurialism that goes beyond economic development and remains astute in achieving changing societal and political goals. It also enriches the conceptual framework of the spatio-temporal fix by drawing on the studies of the state-led financialisation of rental housing in the Chinese context. (495 words)