Yuan Xiao: Making Land Fly

 

On November 14, 2016, Dr. Yuan Xiao gave a lecture to the MIT DUSP and CRE community about the land quota markets in China. Dr. Xiao is an Urban Development Specialist at the World Bank's Middle East and North African region.  She previously worked at Columbia University as an assistant professor in urban planning, and as a postdoctoral research scholar at Columbia Law School.  She obtained her PhD in Urban and Regional Planning from MIT in 2014, with an award-winning dissertation on urbanization and land governance in China.

Dr. Xiao’s talk centered on two questions: how did land quota markets form, and what are their impacts? The talk began with an introduction to the system of land use in China, including the process of densifying rural settlements and reclaiming farm land in rural areas. Dr. Xiao used the example of Grandma Wu, a farmer whose house was demolished by the local government in exchange for a family apartment in the city center. Since Grandma Wu’s house is at least one hour away from city center, the government did not take it for construction purposes. However, the government reclaimed Grandma Wu’s house for farming. By reverting this land to farming, the city has "saved" some development land or building footprint. These saved parcels are traded as land quotas.

Using comparative case study as her main method, Dr. Xiao interviewed government officials, real estate developers, and peasants for her research. She also accessed 735 quota generation projects from Chengdu's archives. Because municipal governments depend on land for fiscal revenue and economic growth, they want to develop land as much as possible. This is done through the local land bureau that answers to the central administration, which is conversely focused on social stability and food security/farmland protection. A central ministry sets annual land conversion quotas for municipalities to constrain rapid loss of rural land, and these quotas are usually less than what local officials deem ideal. As a response to this shortage, municipalities devised a system to maintain the same amount of farmland but move the construction activity from rural areas to urban fringes. In some cases, after large-scale reclamation and densification, the land occupied by the new village center is only one-third of the land occupied by all the houses previously. This saves 70 percent of built-up areas for urban fringe development. Since the end price for these quotas does not depend on where the quotas originated from, and farmers who live further away from city centers expect less compensation for their land, the quota developers are incentivized to go to the most remote villages first for reclamation efforts. The most rural places are densified first.

Despite receiving higher-quality housing and infrastructure, the implications for peasants include displacement and lifestyle shock. These households have little experience living in cities, and struggle to continue work on their farms, which are now inconveniently located hours away.

As Dr. Xiao’s discussant, Professor Sai Balakrishnan from the Harvard Graduate School of Design, responded with a discussion on two equivalents elsewhere in the world—the transfer of development rights in Mumbai and New York City. Professor Balakrishnan drew the connection that land per se is not being exchanged in the market, but rather that land ownership is de-linked from use rights in China and development rights in Mumbai and New York. New markets are being created. She also outlined the different motivations that created these markets, from agricultural security in China, to historical preservation in New York, and revenue generation in Mumbai.

The talk was followed by a lively question and answer session with the audience, which addressed questions about the peasants’ experiences in displacement, the categorization of this phenomenon as a new market, and further details into the quota system.

---Joanne Wong, first-year DUSP student and STL Fellow

 

Dr. Yuan Xiao is an Urban Development Specialist at the World Bank's Middle East and North African region.  She previously worked at Columbia University as an assistant professor in urban planning, and as a postdoctoral research scholar at Columbia Law School.  She obtained her PhD in Urban and Regional Planning from MIT in 2014, with an award-winning dissertation on urbanization and land governance in China.

Professor Sai Balakrishnan is an Assistant Professor at Harvard Graduate School of Design.  Her research focuses on institutions for managing rapid urbanization, comparative land-use planning, and property rights.  She has a PhD in urban planning from Harvard and a Master's of City Planning from MIT.