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Love lives of Chinese men suffer from housing boom

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So, the urban economists have a simple solution to this matter of the heart. China needs an "escape valve". In the United States, hundreds of millions of people have sought out new cheap housing in "new cities" and have been happy to settle in such places as Tampa, Dallas, Las Vegas and Phoenix. These folks can travel to the "Superstar Cities" on the coasts or merely watch Kobe and Jerry Seinfeld on TV. They have been free to choose to locate in a less expensive city and thus to be able to afford more housing.

Yes, Shanghai and Beijing are tremendously costly but within a system of cities with easy cross-city migration --- why won't new cities arise that are analogous to Houston or Las Vegas? One answer is that the powerful state may slow down this migration (either intentionally or unintentionally). In a free market capitalist economy, firms follow people and people follow jobs. If both firms and people want cheap land then they can co-ordinate and locate in a Las Vegas.

In the case of China, is the powerful state guiding economic activity to specific locations (either through handouts or subsidies) or is it allowing free market forces to playout? I predict that the dudes' problem will go away if the free market is allowed to operate in China. China's population will spread out into new cheaper cities and romantic bliss will ensue.

In understanding the causes of high urban prices, we can't ignore the supply side and the ability of developers to build new housing and the incentives of those holding inventories of existing apartments to sell them. On the developer side, researchers such as Ed Glaeser and Joe Gyourko have argued that high home prices in the United States is associated with land use regulation. Albert Saiz has documented that steeply sloped land is hard to build on.

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