Strategic land allocation in China’s urban renewal: the role of non-market mechanisms

Abstract Despite the 2004 land marketization reform, nearly 60% of market housing land transactions in China still involve non-market mechanisms. This study discusses three primary reasons. First, non-market allocation significantly reduces land costs for market housing, attracting more stakeholders to participate in urban renewal projects. Second, non-market allocation allows local governments to select experienced and capable developers, ensuring the success of urban renewal projects. Third, non-market allocation facilitates better negotiation of compensation and resettlement for relocated residents, reducing social tensions and maintaining stability. Non-market allocation emerges as a strategic tool for managing the complexities and risks of urban renewal in China.