Love lives of Chinese men suffer from housing boom
In China's big cities, real estate's expensive and young women are in short supply. If the population spread more evenly into cheaper parts of the country, would it be easier for a guy to get a date?
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In the case of China, is the powerful state guiding economic activity to specific locations (either through handouts or subsidies) or is it allowing free market forces to playout? I predict that the dudes' problem will go away if the free market is allowed to operate in China. China's population will spread out into new cheaper cities and romantic bliss will ensue.Skip to next paragraph
Mathew is an economics professor at UCLA and has written three books: Green Cities (Brookings Institution Press); Heroes and Cowards (Princeton University Press, jointly with Dora L. Costa); and in fall 2010, Climatopolis: How Our Cities Will Thrive in the Hotter World (Basic Books).
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In understanding the causes of high urban prices, we can't ignore the supply side and the ability of developers to build new housing and the incentives of those holding inventories of existing apartments to sell them. On the developer side, researchers such as Ed Glaeser and Joe Gyourko have argued that high home prices in the United States is associated with land use regulation. Albert Saiz has documented that steeply sloped land is hard to build on.
I bet that these same factors matter in China. If the state owns the land, how does it decide how much land to devote to development? If it devoted more land in other cities to development, how would this affect apartment prices in those areas?
Why are speculators holding inventories of apartments and delaying selling them now. They must have expectations of being able to sell them at much higher prices in the future. If Chinese urbanites in non-superstar cities --- could contract with developers to build them simple housing, then market forces would create the equivalent of a Levittown in China's cities. If such speculators knew that urbanites could build their own homes or contract with a low cost developer rather than bidding for a speculator's property, then this would convince the speculators to lower their prices and sell their stock of units.
Competition chips away at monopoly power.
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