First off, I’d like to apologize. This blog post is going to touch on urban economics and housing affordability; not the sexiest of topics for a blog. If Portland, USA and Shenzhen, China have one thing in common (and it isn’t much), it would be that they are both becoming increasingly unaffordable. With that being said, the magnitude of unaffordability between the two cities is incomparable. Last year Shenzhen surpassed Shanghai and Beijing in becoming the most expensive housing market in China. Shenzhen is essentially running out of vacant land to build upon. Amid this severe shortage of residential land supply in Shenzhen, leading to astronomical home prices, the city is getting aggressive in launching urban infill redevelopment projects. These projects will become an intense area of competition among companies eager to make a profit from China’s most expensive property market. According to the 13th Five-Year Plan (five-year plans are a series of social and economic development initiatives and policies shaped by the Communist Party of China, mapping strategies and setting growth targets), the city is aiming to redevelop an urban land area of 30 square kilometers (7,400 acres) and renovate more than 100 old industrial districts and 100 urban villages. The plan looks to resolve the housing shortage in the city by building roughly 260,000 new residential apartments near railway stations and in the city center.
Building one’s way out of unaffordability (adding supply to meet demand) is by no means a new concept, but what strikes me is the renovations to the urban villages, which essentially means tearing a good portion of them down. Fellow intern Brandon was placed, ironically, in UPDIS’ Urban Renewal department and got to tour one of the urban villages that will be partially torn down soon and UPDIS is working on the design for the redevelopment. From what we have been hearing, urban villages provide the last type of affordable housing in the city. And this is by no means “low-income” housing; these villages house a diverse mix of students, young families, and blue and white-collar professionals. It will be interesting to see in the long run how much of this new housing being built will be made affordable to citizens who don’t work in tech or some of Shenzhen’s other high-powered industries.