Land-based interests and the spatial distribution of affordable housing development: The case of Beijing, China

• Compared to commercial housing, affordable housing projects tend to locate in the peripheral locations in Chinese cities.
• Locations with higher land-leasing prices have a lower probability to be designated for affordable housing developments.
• China's central-local relationship creates incentives for city governments to locate affordable housing in the urban fringe.

This paper provides an institutional explanation for the spatial distribution of affordable housing units biased toward the urban fringe in Chinese cities. We argue that, given China's inter-governmental relationship, the discriminatory site selection practice is a result of strategic policy implementation by city governments, who strive to balance the top-down political pressure with the local fiscal interests. The empirical analysis focuses on the implementation of the Economical and Comfortable Housing (ECH) Program in Beijing in 1999–2009. Binary logistic regression reveals that, holding local housing needs and socio-demographical attributes constant, sub-districts with a higher land price, a high ratio of old houses, and greater subway accessibility have a lower probability of being designated for affordable housing development. The empirical findings confirm the significance of land-based interests of city governments that contribute to many unintended consequences of affordable housing programs at the local level.