Urban Spatial Development in the Land Policy Reform Era: Evidence from Beijing

Abstract

This paper examines the characteristics of urban spatial development in Beijing and identifies the extent to which these characteristics can be attributed to the emerging land market in Beijing as well as the impact of land policy reform. Based on the observations of land use rights granted from 1993 to the first half of 2000 in the built-up area of Beijing, empirical analyses illustrate that both land prices and land development density decrease with distance to the city core. It further provides evidence that the slope of the land rent curve also depends on land use types. This leads to the conclusion that the land market influences land development decisions and urban form. Finally, it shows that the slope of the land rent curve and the elasticity of land-capital substitution change over time. The former declines, as expected. This is because Beijing's massive investments in transport have reduced transport costs, which in turn has shifted the land rent curve. The latter rises, implying the price effect on land development density. Both changes—in land rent function and the elasticity of land-capital substitution-point to the maturing of the Beijing land market. It should be mentioned that there are enormous land developments outside the land market (land development on administratively allocated land). These developments can significantly distort urban land use patterns portrayed through this study.