Tenant Preferences for Affordable Rental Housing Development: The Case of Shenzhen, China

During the 14th Five-Year Plan (2021-2025), the Chinese government has been increasingly recognized the importance for inclusive housing policies and prioritizing the Affordable Rental Housing program (Gao & Hu, 2024). This program aims to provide affordable housing options for all new urban residents, especially migration workers and young talents, by removing the restrictions of household registration status. In large cities, the local authorities attempt to combine urban village regeneration with affordable rental housing provision. Urban villages represent a distinctive form of informal settlement shaped by the country’s dual land ownership system and rapid urbanization in China (Zhang 2024). They share some similar features associated with informal settlements in developing countries, such as overcrowding, inadequate infrastructure, and limited public services (Wu 2016). Under this new transformation model, the government and developers acquire long-term leasing property rights from urban villagers, jointly renovate buildings, streets, and public spaces, and then lease the upgraded properties to new tenants. This approach aims to improve the overall living environment in urban villages as well as formalize the rental housing market.

Affordable rental housing program is dominated by the government and developers, while the needs and preferences of its target groups are primarily overlooked. Drawing on primary data from the 2023 Shenzhen Urban Village Tenants Survey, this study aims to fill this gap by investigating the tenants’ preferences for affordable rental housing development in urban villages. A stated choice experiment is designed and embedded in the survey. Results show that rental price, surface area of dwellings, elevators and common spaces within the building, commuting distance, proximity to subway stations are important factors that affect the tenants’ decision making. The supplier of affordable rental housing does not matter much. Young talents demonstrate stronger preferences for affordable rental housing development in urban village than migrant workers.