Land supply for public housing, commercial housing prices and migrants’ intention to stay

This study investigates the nexus among land allocation for public housing, commercial housing prices and the intention of migrants to reside in their host cities. The literature highlights two contrasting effects of land supply for public housing on commercial housing prices: a positive crowding-out effect and a negative substitution effect. This study contributes to the literature by proposing a theoretical framework that considers the dynamics of land allocation for public housing within the context of urban development. We hypothesise an inverse U-shaped relationship between land supply for public housing and commercial housing prices and suggest that when the land supply for public housing is insufficient, the positive crowding-out effect will dominate, but when the land supply for public housing is sufficient, the negative substitution effect will dominate. We extend our analysis to the intention of migrants to reside in urban areas and hypothesise a U-shaped relationship between such intentions and land supply for public housing. We support our hypotheses by conducting empirical analysis with multisource data from China.