The Second Home Phenomenon in Haikou, China by Xiaoxiao Wang A thesis presented to the University of Waterloo in fulfillment of the thesis requirement for the degree of Master of Arts in Planning Waterloo, Ontario, Canada, 2006 ©Xiaoxiao Wang 2006 I hereby declare that I am the sole author of this thesis. This is a true copy of the thesis, including any required final revisions, as accepted by my examiners. I understand that my thesis may be made electronically available to the public. ii Abstract Second home ownership is a new and booming phenomenon in China. Although it has been widely discussed in newspaper, radio and other mass media, it has not raised much academic concern. This study is a preliminary research in this field. In western counties, second home growth has caused a series of socio-economic impacts to the host community, including housing price inflation, displacement of local people, disruption of local service, etc. These effects identified by western literatures are examined in the context of Haikou, China. Through applications of interview, on-site observation and secondary research, this study generally confirms the impacts addressed by other second home research. Similar to the western experience, the growth of second homes in Haikou has both positive and negative impacts. On the positive side, the increase of second home purchase contributes to the boom of property-related industry. On the negative side, it causes inflation pressure on housing price and affects the affordability of the housing for local people. The seasonality of second home occupation also leads to a “ghost community” problem. However, as the development of second homes in Haikou is at an early stage, both their positive and negative impacts are not significant. Some effects such as the displacement of locals, the effects on local retail outlets and services are not detectable. Remarkably, this study addresses two problems that can only be found in China: “college entrance exam immigration” and “illegal sale of hukou”. Based on the major findings, policy recommendations for local government are provided. Implications for conducting research in China, and for future research opportunities are also suggested. iii Acknowledgements This thesis could not have been finished without the help and support of many people. I would like to thank my supervisor, Professor Geoff Wall, and my committee member Professor Mark Seasons for their intellectual comments and advices throughout the process of my research and writing of the thesis, and for the time they devoted to reading the drafts of this document. Thanks also to other Ecoplan China colleagues, Dr. Kai Gu, Yang Wang, Wei Li, Nancy Fan, Jia Wu, Yiming Wang, etc. I appreciate the education and friendships I gained in University of Waterloo. I would like to express my gratitude to the individuals in the case community who agreed to be interviewed as part of this research. I am truly thankful for their interests and participations in my study, especially for providing valuable information about their communities. Thanks also to those who facilitated my access to information during my field trip. These include Ms. Chen in Hainan Business Association, Mr. Jinlin Wu in Hainan Department of Land, Environment and Resources, Mr. Qinggui Li, Mr. Guowen Wu and Miss Ming Jian in Environmental Science Academy of Hainan Province. I wish to extend my sincere gratitude to Professor Jian Lin and Professor Xiaochen Meng, as well as a group of master students in Peking University, Chongming Bi, Jixiang Zu and Jing Zhao, etc. Thanks also to the PhD students in Zhongshan University, Xiang Huang and Wenxiong Xu. I am very grateful for the help and advices I received from them. Finally, a special thank goes to my family. Thanks to my grandparents, who brought me up and always encouraged me to pursue education. Thanks my parents for their encouragement and endless support. And thank to my boyfriend Adam Yao, who shared all the frustrations and successes with me, for always being understanding and supportive. iv Tables of Contents Abstract............................................................................................................................. iii Acknowledgements .......................................................................................................... iv Tables of Contents............................................................................................................. v List of Figures................................................................................................................. viii List of Tables..................................................................................................................... ix Chapter 1 Introduction.....................................................................................................1 1.1 Background............................................................................................................. 1 1.2 Statement of research questions.............................................................................. 5 1.3 Thesis framework.................................................................................................... 6 Chapter 2 Literature Review ...........................................................................................7 2.1 Research foci of previous studies ........................................................................... 7 2.2 Definition and measurement..................................................................................11 2.2.1 Understanding second homes .......................................................................11 2.2.2 Second home owners and second home users ............................................. 13 2.2.3 The relationship between primary and second home................................... 14 2.3 The origins, spread and status of second homes ................................................... 15 2.3.1 Origin of second homes ............................................................................... 15 2.3.2 Spread of second homes............................................................................... 16 2.3.3 Status of second homes................................................................................ 18 2.4 Socio-economic impacts of second homes ........................................................... 19 2.4.1 Understanding socio-economic impact analysis.......................................... 19 2.4.2 Economic Impacts of second homes............................................................ 22 2.4.3 Social impacts of second homes .................................................................. 25 2.4.4 Density and types of second homes and associated impacts ....................... 27 v 2.5 Research in China ................................................................................................. 30 2.6 Summary............................................................................................................... 31 Chapter 3 Analytical Framework and Methodology...................................................33 3.1 Research Design.................................................................................................... 33 3.1.1 Selection of study area................................................................................. 33 3.1.2 Research Process.......................................................................................... 35 3.2 Research Framework ............................................................................................ 38 3.3 Methodology......................................................................................................... 41 3.3.1 Case Study Approach................................................................................... 41 3.3.2 Qualitative Research .................................................................................... 41 3.3.3 Research Methods........................................................................................ 42 3.4 Data Source........................................................................................................... 48 3.5 Limitation and Challenges .................................................................................... 49 3.6 Summary............................................................................................................... 50 Chapter 4 The case of second homes in Haikou, China ..............................................52 4.1 Introduction to the study area ............................................................................... 52 4.2 Historical context：Housing market and policies ................................................ 55 4.2.1 Early stage of the housing market: before 1988 .......................................... 55 4.2.2 Expansion period and housing bubble: 1988-April 1993 ............................ 56 4.2.3 Bubble burst and decline period: April 1993-1995...................................... 59 4.2.4 Stagnancy period: 1996-June 1999.............................................................. 61 4.2.5 Recovery period and the emergence of second homes: July 1999-present.. 63 4.3 The emergence of second homes .......................................................................... 68 4.4 Current Status of second home development in Haikou....................................... 71 4.4.1 Estimated number .......................................................................................