Developing metro-based accessibility: Three aspects of China’s Rail+Property practice

Abstract

Populous Chinese cities have invested heavily in metro systems and planned proactively for transit-oriented development. Rail plus property (R+P) programs, where metro corporations engage in, and even orchestrate real estate development in or around rail station areas, have been recurrently reported among these cities. However, careful assessment of these programs is still rare in the existing literature. Built upon multiple R+P programs led by Shenzhen Metro Cooperation and/or Hong Kong Mass Transit Railway Cooperation, this article fathoms the rationale for R+P programs in Mainland China, the obstacles for oversea private investors’ participation and the balance between profit making and social goods supply. It finds that R+P programs serve as alternative funding sources for expensive metro projects. It decreases municipal governments’ cash flow contribution to those projects, which is mandated by the central government. In addition, local business environment for R+P projects has disadvantaged private sector participation, especially those private investors from overseas. Furthermore, public subsidy to local metro corporations is likely to persist as R+P programs have not been designed for economic value maximization; rather, they are in place because (1) they reduce the cash flow burden of the municipal government; (2) they are tasked by the municipal government to produce a considerable number of affordable public housing.