Compensation, housing situation and residents' satisfaction with the outcome of forced relocation: Evidence from urban China

Abstract Since China's housing reform in 1998, urban redevelopment and expansion driven by various stakeholders and the urbanization process have led to the forced relocation of urban residents on a massive scale. Forced relocation in China and other countries is generally associated with negative residential outcomes, although in some situations residents may be able to employ certain strategies to cushion its effects. However, few empirical studies have unraveled the nature of forced relocation from the perspective of compensation, particularly in the context of urban China. Using data from the 2013 China Household Finance Survey (CHFS), this study examined to what extent and in what ways compensation can influence relocatees' housing situations and their satisfaction with the outcome of their forced relocation. The results indicate that the current housing situations of relocatees are not necessarily worse than those of people who have not undergone forced relocation, especially when the forced relocation occurred more than three years previously. Meanwhile, substantial amounts of compensation can increase relocatees' level of satisfaction. The results also indicate that housing situations (including the housing floor area and self-estimated commercial value) are important pathways through which compensation can have positive effects on residential satisfaction. Our findings reveal the multifaceted nature of “forced” relocation: It is not necessarily negative, depending on residents' bargaining power for compensation and their housing strategies after relocation, and its influence should be understood as a dynamic process with a time sequence.