List of under-occupied developments in China

This is a list of property developments in China which remain mostly unoccupied, sometimes referred to as "ghost cities." They are also frequently referred to in the media as "ghost towns", but this usually refers to abandoned places rather than new ones which have failed to attract a population.

The way property values are structured in China plays a role in the creation of "ghost cities", according to author Wade Shepard, who has traveled widely to research the phenomenon of China's underoccupied cities. "Economically affordable housing" must be lived in by the owner, and can not be bought and sold as an investment. The developer is only permitted to sell "economically affordable housing" at 5% over the cost of construction. By contrast, "commodity housing" can be bought and sold as an investment. Because housing is a physical object, and China's large population guarantees an ongoing demand for housing, commodity housing is considered a more secure way of storing money. "Commodity housing" purchased as an investment generally sells, with the exception of some Tier 3 and Tier 4 cities which have different government regulations.

Construction of "commodity housing" is driven by the disparity between urban and rural land prices. Rural land, which must be collectively owned, is redesignated by a municipality as urban construction land, which can then be resold by the municipality at as much as forty times the price. He explains that municipalities must pass on about 40% percent of their tax revenues to Beijing, and are responsible for about 80% of their expenses. Hence there is an incentive to seek non-tax income streams. According to Shepard, as of 2015, "40% of the revenue that local governments in China make is from land sales." The Party further incentivizes construction on this newly urban land by using local GDP growth as one of the indicators that makes a local government look good within the Party.

In 2012, these type of development created $438 billion (394 billion euros) for China's local governments.

Developers acquire new plots of land from local governments, they are mandated to construct something more or less immediately. Developers can't sit idly on vacant land and wait for the surrounding area to develop until its economically viable. This creates the quick buck mentality in developers to rapidly build up the buildings in the new area without the necessary demand for housing, new industries essential for employment to sustain the housing and new community.

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Wikipedia