In China, local governments have the rights to lease land to developers. The land revenues thus collected account for a large proportion of the total local government revenues. For the residential, industrial, commercial, and comprehensive land uses, the land prices are very different. However, the government must consider the development of the city when leasing land. Therefore, it is very important to study the government’s behaviour of leasing land in China.
In this research, based on the district-level data of Shanghai and Beijing for the period 2004-2015, the factors influencing land leasing by the district government are studied for different land uses, such as residential, industrial, commercial, and comprehensive land uses. Also, how these factors affect the government’s decisions to lease land to different land uses in Shanghai and Beijing are explored. Further, the factors influencing land leasing in the suburban districts of Shanghai and Beijing are analyzed. The main research methodology applied in this research is hedonic model based on ordinary least square (OLS) method.
Data from 19 districts in Shanghai and 18 districts in Beijing for the period from 2004 to 2015 on the district level were collected for this study. Interviews with the officials of the Departments of Planning and Land Authority in Shanghai to collect information on land leasing and its influencing factors are summarized.
The methodology used in this research is discussed. Hypotheses of the factors influencing land leasing by the district government are proposed based on the interviews. These factors include the area of the land, floor area ratio of the land, modes of land leasing, location of the district, distances between the land and the city center, district center, airports, railway station, the nearest subway station, the nearest entrance or exit of highway, the nearest university, the nearest key high school, the nearest park, the nearest industrial park, gross domestic product (GDP), paid-in foreign investment, unemployment, tenure of district mayor, resettlement housing, gross industrial production, total industrial asset, and industrial employees. The hedonic models of land price and the influencing factors of land leasing, and OLS method of total land area and the influencing factors of land leasing for residential, industrial, commercial, and comprehensive land uses by the governments in Shanghai and Beijing are presented. The hedonic models of the influencing factors of land leasing for residential, industrial, commercial, and comprehensive land uses by the governments in suburban districts in Shanghai and Beijing are given.
The regression results of the models are obtained using the software Stata. The results of the regressions of the factors influencing land leasing in Shanghai, Beijing, and suburban districts in Shanghai and Beijing are discussed, and the significant and insignificant factors of land leasing by the governments are analyzed.
According to the results, the factors influencing land leasing differ for each of the four types of land uses in Shanghai and Beijing, and so do their influence levels. In addition, some factors influencing land leasing are different for Shanghai and Beijing for the same type of land use. As regards the suburban districts in Shanghai, as compared with the results of all the districts, the amplitudes of variation of some variables for suburban districts are different, the land prices of residential, commercial and comprehensive land uses are lower, and there is more industrial land available in suburban districts in Shanghai. As regards the suburban districts in Beijing, the land prices of residential, commercial and comprehensive land uses are lower than those in all the districts in Beijing. Industrial land price will be higher in suburban districts if the indices of industry increase.
This study can illustrate the problems and challenges of current land leasing in the large cities of China. It provides credible and strategic recommendations about how to use land resources toward an efficient and equitable land use policy and long-term and financially sustainable urban development, and attempts to help the governments formulate more efficient and sustainable land use policies and make better land leasing decisions in the coming decades.