The nationalization of elite private middle schools and urban housing market restructuring in Hangzhou, China

This study examines how education equalization policies reshape urban housing markets. We exploit Hangzhou's private-school nationalization policy, which converted elite private middle schools into tuition-free public schools while retaining district-wide lottery admission. Using resale and rental listings, transaction records with buyer demographics, and school-quality and catchment area data, we estimate difference-in-differences and triple-difference models. The policy reduced the education premium of elite public-school catchment housing by approximately 0.6%, with buyer-composition changes consistent with financially constrained, education-oriented households shifting toward the newly affordable alternatives. Rents near nationalized private middle schools increased by approximately 0.7%, with spatial and temporal patterns consistent with post-admission demand for residential convenience. Both effects were attenuated where enrollment quotas were reduced. These findings show that education equalization can reconfigure, rather than simply weaken, the capitalization of school access by shifting educational value from an ownership-based access premium toward a rental-based convenience premium, with the magnitude of this restructuring conditioned by effective enrollment capacity.