Caixin
May 14, 2019 07:49 PM
SOCIETY & CULTURE

‘Forever Outsiders’: Housing Research Suggests Residency Restrictions Drive Inequality

There are things money can’t buy — and in Shanghai, an apartment is often one of them.

Migrants from other cities without a Shanghai “hukou,” or household registration, have 90% lower odds of owning homes in the city compared with Shanghai natives, even though they’re more likely to be higher earners, according to a new study of city residents in their 30s published in the Journal of Ethnic and Migration Studies. Migrants from the countryside fare similarly, with 92% lower odds of owning a home than locals.

China’s hukou system ties every registered citizen to a particular location, which affects where they’re able to access social services, education and the housing market. In a major city like Shanghai, whose promise of jobs and wealth has attracted millions of migrants, it’s difficult for new arrivals to obtain the coveted local hukou unless they marry a local or meet special education or occupation requirements. Migrants comprised 39% of the city’s population at the time of the last census in 2010.

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The researchers, from Brown University, the University of British Columbia and Shanghai’s Fudan University, wrote in their report that the hukou “remains a powerful engine of social inequality in China.”

While the study didn’t clearly show whether owning a home in Shanghai makes it easier for migrants to gain Shanghai hukou or vice versa, there was a clear correlation between the two. “A migrant can work in Shanghai with a high paying job but may find it difficult to get loans for cars or to overcome institutional barriers to purchase an apartment without Shanghai hukou,” the researchers wrote.

Even when migrants finally obtain a hukou, they’re at a disadvantage because they weren’t able to benefit from reforms in the 1990s that allowed Shanghai hukou holders at the time to purchase the state-owned apartments they lived in at steep discounts.

The findings of the study come weeks after China’s state planner announced plans to eliminate hukou restrictions for smaller cities.

The hukou system has recently been criticized for obstructing the integration of migrants in cities, even as China’s biggest cities have tightened restrictions on nonresident populations.

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A young man looks out over the Huangpu River at the Bund in Shanghai on Aug. 19. Photo: VCG

“Those with access to hukou move on to accumulate more wealth,” according to the report’s authors Zhenchao Qian of Brown University, Yuan Cheng of Shanghai’s Fudan University, and Yue Qian of the University of British Columbia. “Rural and other migrants are forever outsiders, working for their dreams, engaging in essential jobs, but unwelcome and unable to integrate in Chinese cities.”

Contact reporter Teng Jing Xuan (jingxuanteng@caixin.com)

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