MegaCities: Where Human Being Should LIVE to Be More Productive – University of Pennsylvania Law School

Introduction

Human beings should live in places where they are most productive, and megacities,3 where information, innovation and opportunities congregate, would be the optimal choice.4 Yet, megacities in both China and the U.S. are excluding people by limiting housing supply. In the U.S., New York City has lost a net of 529,000 domestic migrants from 2010 to 2015, in large part due to its high housing costs.5 In San Francisco, housing production has long failed to match the city’s economic growth, with only 11,000 units added to its housing stock from 2009 to 2015, a period in which the city added over 123,000 new jobs.6In China both city governments in Beijing and Shanghai have reduced the supply of residential land to control population, resulting in reduced speed of population growth in Beijing and population outflow in Shanghai since 2016.7 Why, despite their many differences, is the same type of exclusion happening in these

two countries? The two countries are fundamentally different in land ownership regimes, land use regulations, and urban governance—governments in Chinese megacities monopolize land supply, manipulate land use controls, and centralize decision-making processes to promote growth. Governments in U.S. megacities, by contrast, have been taken over by decentralized local communities dominated by homeowners.

Our comparative study of the homeowner-dominated megacities of the U.S.11 and growth-dominated megacities of China12demonstrates that relying on business and political elites to provide affordable housing is a false hope. Homeowers do not generally look favorably on newcomers to a city who demand housing and public services but do not have sufficiently deep pockets to purchase an apartment. Neither do growth-oriented city governments that control resources and have the capacity to make and implement whatever policies they deem to be pro- growth. This article argues that the growth machine vs. homevoter debate shares the same incomplete framework of urban governance that gives no voice to city residents who own no property or businesses, and calls for citizen-based urban goverance to replace property-based urban governance. The article also furthers that debate by comparing land use controls and development processes in the U.S. and China.

China presents a very different picture of land use control. There, land use regulations are administratively driven.15 The general public has only nominal rights to participate in the zoning process. Land use power is concentrated at the city administration level under the command of a strong city leader. As a result, city governments can make zoning amendments quickly with little input from the public.16 However, the Chinese central government, urban planning officials, professionals, and scholars have exposed significant problems within this “efficient” system, and argued that the lack of public participation is endangering the legitimacy of zoning in China and contributing to an inefficient housing market.17 The Chinese real estate market exhibits a combination of skyrocketing prices in the country’s megacities, which results in the exclusion of middle- and low-income populations (as well as the denial of employment and social opportunities), and housing oversupply in its smaller cities, as symbolized by the numerous “ghost cities” dotting the landscape.18 In this article, we focus on housing shortages in Chinese and American megacities.