Parking Propels Real Estate Bubble in Beijing

What's causing underground parking spaces to go for $160,000 in Beijing? Quartz reports that demand, narrow roads, resident disenfranchisement and old zoning law give developers the upper-hand.

Gwynn Guilford writes of $100,000 parking spaces commonly found in Beijing. Underground parking contributes to China’s real estate speculation, led by “greedy property developers” and growing demand for automobiles. The article stresses that two variables account for why Beijing has some of the world’s most expensive parking spaces: growing car ownership and lack of proper legal knowledge and enforcement means residents pay exorbitant rates—perhaps on parcels they already own.

Thee real backstory here, according to Guilford, is that: “Zoning plans haven’t kept up with Beijing’s embrace of car culture; many slightly older developments were designed without allotting ample parking spaces," and on-street parking is rarely permitted.

The issue is more nuanced: “Beijing has among the lowest ratio of roads per overall land area of any major metropolis in the world…“ and with a population of 7.5 million cars—or a car for every 2.5 residents—private parking is prioritized. While the government vows to reduce a million cars by toying with the license plate lottery, that impending policy has created a "car buying surge" and with it, a "parking spot bubble" in real estate. Values even 30 miles from Beijing’s core cost more than the car itself.

Guilford details further Chinese property laws and elaborates on why residents are willing to pay inflated rents. This, she writes, is due to lack of knowledge about property law or the legal channels to enforce the law, meaning that developers contribute to the scarcity and exact skyrocketing prices “…for a parking space that [residents] legally own.”

Full Story: Parking in some areas of Beijing now costs more than $160,000

Comments

Prepare for the AICP Exam

Join the thousands of students who have utilized the Planetizen AICP* Exam Preparation Class to prepare for the American Planning Association's AICP* exam.
Starting at $199
Planetizen Courses image ad

Planetizen Courses

Advance your career with subscription-based online courses tailored to the urban planning professional.
Starting at $14.95 a month
DVD Cover of The Story of Sprawl

The Story of Sprawl

See how America changed shape in this collection of historic films that visually document how sprawl evolved.
$29.99 for 2-DVD SET

Stay thirsty, urbanists

These sturdy water bottles are eco-friendly and perfect for urbanists on the go.
$19.00