How China Improved Housing Standards Since Mao's Cultural Revolution

China's experience in housing people is not as successful as that of Singapore. But, in the past three decades, China was successful in making housing affordable to more people than any other country in the world. But, the country's housing policy is not without its flaws. China is yet to succeed in making housing very affordable to people who are extremely poor. China does not efficiently use land in the periphery of its cities either. Nevertheless, there is much that India and other countries can learn from China.

Over the past three decades, China's cities fared quite well in allowing people to live in more spacious houses. In the early 80s, floor space consumption in Chinese cities were in the range of 4 to 6 sq m per person. This is about the same of that of present day Mumbai. In 1988, in Tianjin, the average floor space consumption per person was merely 6.5 sq m per person. But, in 2000, this rose to 19.1 sq m per person, and in 2005, it was as high as 25 sq m per person. This should be a case study in improving housing standards. Tianjin's situation is not unique. In 1984, the floor space consumption in Shanghai was 3.6 sq m per person. But, in 2010, it was as high as 34 sq m.

This did not happen by chance. In the early to mid-80s, China was slowly recovering from Mao's cultural revolution. The floor space consumption in Chinese cities rose partly because authorities raised floor areas ratios, and partly because there was an increase in the consumption of urban land. Floor area ratios or FAR is the ratio of the floor space constructed in a building to the size of the plot. Say, if the floor area ratio is raised from 2 to 20, the number of floors that can be constructed on a plot will rise 10 times. China increased the urban land available by building infrastructure in the periphery.

China's city-building exercises have led to many ghost cities. This happened because China built cities at a much faster pace than it seems necessary. Perhaps in the long run, this will reap greater dividends as a long-run policy. In most other developing countries, there is a shortage of urban land. China does not face this problem. Now, it seems that China's city building exercises are too expensive. But, the abundance of urban land will perhaps in the long run, cut the cost of urbanisation. In India too, there is a shortage of urban land.

India's Housing For All Mission can also learn from the mistakes China made. One of the important failures of China have been in not developing contiguous tracts of land in the peripheries of cities for agriculture or industrial growth. This is because land conversion laws make it difficult to develop contiguous land for a specific need. For example, if contiguous land is not available for farming or building industrial plants in the periphery, this would be difficult.

Moreover, in China, land use regulations do not follow a strong relationship with the demand for land. For example, it does not make much sense to farm near the centre of the city, even if land use regulations permit nothing else. Such land use laws lead to wastage of valuable land, as it does in Indian cities.

China has more developable urban land because authorities recognized that more people are moving from rural areas to urban areas. Moreover, people consume more floor space when they become prosperous. The Chinese have been consuming more floor space in the past three decades because they have been quite successful in eliminating extreme poverty. The size of households in China have been declining too, with people no longer living with their parents or relatives. When the size of households decline, the amount of land needed to house them rise too. Authorities saw this, and responded fairly well to the growing demand for urban land.

India should do this too, because India is urbanising faster than ever. Large numbers of people live in India's urban areas, and they consume incomparably less floor space, when compared to Chinese cities. Housing in China is not as cheap as it should be. But housing in Chinese cities like Shanghai and Beijing is about one-fifth as expensive of that of comparable Indian cities like Mumbai and Delhi, after adjusting for income levels.