Policy Effects of Talent Housing in Shanghai

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1		Li Tao	--	2302	2022-08-19 05:52:33	\|
2	format	Jason Zhu	-1 word(s)	2301	2022-08-25 05:51:26	\|

This entry is adapted from the peer-reviewed paper 10.3390/land11081145

Housing has become pivotal in attracting and retaining talent in first-tier cities. Although numerous cities are actively promoting the provision of talent housing in China, little is known about the talent’s evaluations of talent housing policies or the effect on their urban settlement intention. Binary logistic regression was employed to analyse the factors significantly contributing to the settlement intentions of the talent. Talent housing was confirmed to alleviate the talent’s housing pressures and further increase their urban settlement intention. The local hukou was determined to be crucial in accelerating the willingness of talent to settle in Shanghai. However, housing affordability (including school district housing) may jeopardise such positive effects. It is crucial to provide more choices of talent housing and increase the coverage of good-quality educational resources. In the long run, more talent can be attracted and retained in the locality under a broader coverage of the talent housing scheme.

talent housing urban settlement intention policy evaluation

1. Introduction

As “carriers” of human capital, talent has made great contributions to technological development ^[1]^[2]. “Talent” refers to highly educated or highly skilled people. Young talent is generally at the beginning of their career, with relatively weak wealth accumulation. Policymakers worldwide have recognized the pivotal role that talent and its movement plays in economic competitiveness, both globally and nationally ^[3]. Ever more countries are engaging in intense, global competition to attract internationally mobile human capital. As a fact, two-thirds of countries of the Organisation for Economic Co-operation and Development (OECD) have implemented policies specifically designed to attract highly skilled migrants ^[4]. Both point-based systems with supply-led policies and job-offer systems with demand-led policies have been implemented to attract high-skilled migrants by issuing visas ^[5]. Other incentives adopted in western countries to attract talent include offers of permanent residency, tax breaks, and financial incentives ^[4]. However, housing policies specifically designed to attract and retain talent are virtually absent from migration policy systems.

Faced with the urgent need for deepening economic restructuring and industrial upgrading, China requires more talent, especially young talent, given the aging problem that has become increasingly serious. “Young people” refers to the population aged between 14 and 35 according to the Middle- and Long-Term Youth Development Plan (2016–2025) of China. Talent is becoming widely recognized as an essential component of urban growth in China ^[6]. Local governments have made various attempts to attract and retain talent. Attracting and retaining talent has become the priority strategy to promote economic development. The Thousand Talent Plan is the flagship initiative in China, which classifies talent according to levels of scientific achievement. First-tier cities in China, such as Shanghai and Shenzhen, have stated their ambitions to mature into knowledge-intensive economies. Resources, such as housing subsidies and local hukou, are tilted toward elite talent, which may enhance its intention to settle down in the locality ^[7].

In China, megacities have been actively promoting the provision of talent housing in recent years. Housing subsidies (both monetary and in-kind) are the main measures included in favourable housing policies designed to attract talent. Serious housing affordability problems have been identified in “superstar cities”, e.g., Beijing and Shanghai, in China ^[8]. The housing price-to-income ratio in Shanghai was as high as 29.85 in 2018, 2–3 times that of other cities in the Yangtze River Delta ^[9]. Due to the high housing prices and strict housing purchase restrictions in Shanghai, young talent (e.g., new graduates) generally has a difficulty purchasing housing ^[2]. Some new graduates move to suburbs for lower rents, or they sacrifice living conditions (e.g., living space or housing facilities) for advantageous housing locations ^[10]^[11]^[12]. Rental housing has been the most common housing choice of young people ^[13]. Housing difficulties induced by skyrocketing housing prices might squeeze creative talent or elites out of these cities ^[14]. The brain drain may become a serious deterrent to the sustainable development of cities.

Talent housing is a form of housing derived from affordable housing to improve the efficiency of social development with the evolution of talent policy ^[15]. Talent housing is provided in both rental and partial-ownership terms. The eligibility criteria generally include academic qualifications (a bachelor’s degree or above), national vocational qualifications (Level 2 or above), and qualifications tailored by local departments according to the needs for industrial development. For instance, the Shanghai government planned to raise 200,000 units of rental housing for talent-housing use by 2025. The Wuhan government has developed a “talent housing lottery” system to ensure the provision of affordable housing for business talent and university graduates ^[2]. Other cities, such as Beijing and Shenzhen, have also developed corresponding policies that strive to provide talent housing ^[16]. However, the following questions arise: (1) What are the actual living experiences of talent in talent housing? (2) Have talent housing policies alleviated the housing pressures faced by talent? (3) Can talent housing policies achieve the ultimate goal of retaining talent? It is necessary to investigate the residential characteristics and policy effects of talent housing, as well as the policy effects of talent housing on the willingness of talent to settle down in a locality.

Located in eastern China, Shanghai is the municipality with the second-highest gross domestic product (GDP) per capita and the second-largest population in China ^[17]^[18]. It is the core city of the Yangtze River Delta Urban Agglomeration (YRDUA), which plays a pioneering role in the wave of industry upgrading ^[19]. This selected Shanghai as the study case for the following 5 reasons: (1) It is a pinnacle of talent in the country. The proportion of residents (aged 16–59) with college degrees and above increased from 26.2% to 46.4% during the period of 2010–2020 ^[20]. (2) The population without local hukou accounts for 42.1% of the 24.87 million residents. In particular, nearly 65% of the population aged 15–34 are migrants ^[21]. (3) Shanghai faces the most serious aging problem among the 4 first-tier cities in China, with 16.3% of residents being over 65 years old in 2020 (Beijing: 13.3%; Shenzhen: 3.2%; Guangzhou: 7.8%). From 2010 to 2020, the proportion of the working population (aged 15–59) decreased from 72.6% to 66.8%. The slight decrease in the working-age population and the rapid improvement in human capital are the most significant changes in Shanghai’s human-resource structure over the decade. (4) The share of people working in tertiary industries has increased from 62.9% to 72.6% during the period of 2015–2019 ^[22], in accordance with Shanghai’s industrial upgrading strategy. (5) As a long-standing pilot city which has pioneered housing policies in China (e.g., housing provident fund and property tax reform), Shanghai is one of the first cities to provide affordable housing to talent (including young talent, such as new university graduates).

2. Talent Housing Policy

In recent years, global cities, led by London and New York, have developed various affordable housing programmes for targeted workers (key workers or essential workers), such as providing down-payment assistance, shared-ownership housing, and subsidized rental housing ^[16]. Targeted workers are usually engaged in public services or key sectors that affect local economies. The US has the largest number of programmes designed to provide housing assistance to public-sector workers, such as teachers, nurses, and police officers who have low-to-moderate incomes, at the national, state and city levels. England introduced the Key Workers Living Program as early as 2004, identifying the categories of public-sector workers eligible for key worker housing assistance ^[16]. However, the Key Worker Lives Program was criticized for privileging certain public-sector workers over others ^[23].

Compared with the targeted workers in the US and England, talent housing in China targets for highly educated and highly skilled workers of a wider range of occupations, such as technical specialists, independent executives, senior managers, and specialized technicians. Since the 2000s, China has accelerated the pace of its public housing provision. To sustain place competitiveness, local governments have included talent in public housing schemes. For instance, Shanghai initiated a talent housing programme as early as 2006. Talent with housing difficulties was included in the Public Rental Housing (PRH) scheme in 2010 ^[24]. By the end of 2020, Shanghai had raised a total of 187,000 units of PRH for talent-housing use. Besides PRH, private housing was rented by the government or leasing agencies for talent-housing use.

3. Residential Preferences of Talent

Talented workers with differing socio-economic characteristics have particular preferences for housing locations, housing sizes, dwelling costs, commuting distances, and residential amenities ^[25]^[26]^[27]. For instance, older talent prefers quiet neighbourhoods in suburbs ^[26]^[28]. The metropolitan core is preferred by young talent for cultural and sports activities and by self-employed professionals, who tend to be workaholics ^[29]. Talent in the Randstad region of the Netherland was found to most value a residential environment with high levels of natural amenities ^[25]. The effects of regional characteristics on attracting talent have also been well-discussed, such as employment opportunities, housing affordability, regional amenities, accessibility, diversity, and equity ^[30]^[31].

The importance of lifestyle factors in affecting the residential choices of talent (e.g., housing location, building type, and housing size) have been highlighted. Lifestyle factors include life-cycle stage, work-role, and leisure activities ^[31]. Highly skilled talent with work-oriented lifestyles would prefer suburban large detached houses ^[32]. Constrained by lower incomes, younger talent tend to rent small- or medium-sized apartments rather than purchasing large dwelling units. Talent with children exhibits strong preferences for homeownership and large dwellings in suburbs due to housing affordability and accessibility to the natural environment ^[31]^[33].

4. Urban Settlement Intentions of Talent

4.1. Effects of Socio-Economic and Demographic Characteristics on Urban Settlement Intention

Urban settlement intention is the willingness of a person to settle down in a cities permanently ^[34]. Current studies have largely focused on the urban settlement intentions of migrants. The determinants and motivation of settlement intentions, especially demographic characteristics, institutional factors, economic incentives, and attachment to the locality, have been extensively investigated ^[35]^[36]. With regard to demographic characteristics, young migrants who lived with spouses were found to have stronger tendencies to settle in cities ^[37]. The cohort effect was a key factor affecting the settlement intentions of migrants. The younger generation (born after the 1980s) usually shows a stronger desire for urban settlement than does the older generation. They are more influenced by desires and the features of destination cities ^[38]. Female migrants were found to have stronger settlement intentions than male migrants ^[39]. Moreover, children were decisive in migrants’ permanent settlement intentions through the utility derived from children’s educations and family unification in urban areas ^[40].

The household registration system (hukou) has been considered as the key barrier to migrants’ settlement intentions in host cities. Migrants suffer exclusion from equal access to basic public services in localities, such as education, social security, and public housing ^[37]^[41]. However, rural migrants usually hesitate to obtain urban hukou in host cities at the cost of losing farmland and homesteads in their hometowns ^[42]. Rural land is considered to be social security for rural migrants to combat unexpected risks in urban areas ^[43]. However, another strand of literature considers that other factors, such as housing, have been playing an increasingly pivotal role in boosting/hindering the urban settlement of migrants ^[44].

Economic incentives include human capital and labour-market status. Migrants usually make settlement decisions depending on whether they can maximise their value of human capital and the economic prospects in the locality ^[45]^[46]. Highly educated migrants are likely to be permanent settlers ^[32]. The longer migrants reside in a locality, the more human capital they may continuously accumulate over time. The accumulation of human capital may further strengthen the migrants’ capability to integrate economically into the locality. Furthermore, stable employment, higher income, and richer working experience are factors motivating migrants to permanently settle down in cities ^[47]. Self-employed migrants are more determined to have permanent urban settlement ^[48]. They are more integrated into urban areas and more capable of utilising economic and social paths to co-reside with family members in cities ^[49].

The effects of social and cultural attachment to the locality on the urban settlement intentions of migrants have been emphasised ^[44]^[50]^[51]. Such an attachment is usually derived from a well-developed network of social ties. Supportive social ties in the locality, such as family members and children, and frequent interactions with local people could largely facilitate migrants’ desires to stay home and reduce their intentions to return to hometowns ^[52]^[53]. Newly-formed ties with non-kin residents have been positively linked to the permanent settlement intentions of migrants ^[44]^[50].

4.2. Effects of Housing on Urban Settlement Intention

The effect of housing on the behaviour of urban settlement is believed to be no weaker than that of hukou ^[54]^[55]. Homeownership is not only the strongest predictor of migrants’ place attachment, but it is also a form of assimilation into the host city ^[34]. The access to formal housing, such as commodity housing and public housing, is positively correlated with the strong settlement intentions of migrants ^[44]. Formal housing might enable migrants to be integrated into a locality by expanding the social network of local ties. Among migrants living in formal housing, those living in public rental housing have expressed stronger willingness to settle down in the locality, compared with those living in private rental housing ^[34]. Moreover, housing attributes (e.g., quality, location, and size) also have significant effects on the migrants’ settlement intention ^[34]^[41]^[56]. Rural migrants living in larger and better-quality housing are more determined to settle down in cities ^[34].

However, the effect of housing on the settlement intentions of migrants is argued as being more related to the sorting process of particular migrants than due to the enabling effect of formal housing ^[44]. That is, migrants who are inclined to settle in a locality would exert more effort toward obtaining access to formal housing. For instance, migrants with no plan to return to hometowns are most likely to live in commodity housing ^[41]. Hence, investigating the residential plans of migrants is significant in revealing the effect of housing on their settlement intentions.

Moreover, housing prices in host cities are negatively correlated with the urban settlement intentions of migrants ^[56]. The expected wealth accumulation by urban integration cannot compensate for the decrease in the utility of migrants due to rising housing prices ^[57]. Migrants (especially skilled ones) are more likely to settle down in larger cities due to better opportunities and public services ^[58]. To this end, conducting further research on the settlement intentions of skilled migrants in the public housing of large cities is important.

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