The Price of Green: Environmental Regulation and Its Impact on China's Housing Market
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The Price of Green: Environmental Regulation and Its Impact on China's Housing Market

Yizhou Fang 1*
1 The High School Affiliated to Renmin University
*Corresponding author: fyznina@126.com
Published on 9 September 2025
Journal Cover
AEMPS Vol.214
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-353-6
ISBN (Online): 978-1-80590-354-3
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Abstract

This study investigates the impact of environmental regulation on housing prices in China from 1999 to 2023. Using the empirical method, we find that stricter environmental regulations can lead to a significant rise in real estate prices, and this positive correlation is significant at 1% level for several specifications of the regression model. Theoretically, green policies appear to influence the housing market by improving property quality, while simultaneously reducing the local labor supply and raising construction costs, thereby altering market demand and supply. Regionally, the higher-priced housing markets in eastern China are less sensitive to these regulatory costs, whereas the lower-priced markets in the west exhibit a stronger positive price response. These findings offer a more thorough assessment of environmental legislation and important insights for policymakers aiming to balance sustainable development with housing affordability. Furthermore, the paper proposes differentiated regulations that can be adopted in response to local housing market conditions.

Keywords:

environmental regulation, real estate price, sustainable development, housing market

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Fang,Y. (2025). The Price of Green: Environmental Regulation and Its Impact on China's Housing Market. Advances in Economics, Management and Political Sciences,214,22-28.

References

[1]. McManus, Phil. “Environmental Regulation.” ScienceDirect, edited by Audrey Kobayashi, Elsevier, 1 Jan. 2020, pp. 241–46.

[2]. Agarwal, Sumit, et al. “Environmental Regulation as a Double-Edged Sword for Housing Markets: Evidence from the NOx Budget Trading Program.” SSRN Electronic Journal, vol. 96, 2017.

[3]. Jim, C. Y., and Wendy Y. Chen. “Impacts of Urban Environmental Elements on Residential Housing Prices in Guangzhou (China).” Landscape and Urban Planning, vol. 78, no. 4, Nov. 2006, pp. 422–34.

[4]. Wu, Jiansheng, et al. “Impact of Urban Green Space on Residential Housing Prices: Case Study in Shenzhen.” Journal of Urban Planning and Development, vol. 141, no. 4, Dec. 2015, p. 05014023.

[5]. Zhang, R. Y. “Environmental regulation, agglomeration of producer services, and urban housing prices: An empirical study of 278 Chinese cities.” Financial Management Research, no. 1, 2023, pp. 174-195.

[6]. Braconi, Frank. “Environmental Regulation and Housing Affordability.” Cityscape: A Journal of Policy Development and Research, vol. 2, no. 3, 1996.

[7]. Nelson, Arthur C., et al. Environmental regulations and housing costs. Island Press, 2012.

[8]. Chen, S. Y., & Chen, D. K. “Smog pollution, government governance, and high-quality economic development.” Economic Research, vol. 53, no.2, 2018, pp. 15.

[9]. Li, Na, et al. “Factors Affect the Housing Prices in China: A Systematic Review of Papers Indexed in Chinese Science Citation Database.” Property Management, Apr. 2022.

[10]. Yang, Zhenshan, and Yinghao Pan. “Human Capital, Housing Prices, and Regional Economic Development: Will 'Vying for Talent’ through Policy Succeed?” Cities, vol. 98, Mar. 2020, p. 102577.

References

[1]. McManus, Phil. “Environmental Regulation.” ScienceDirect, edited by Audrey Kobayashi, Elsevier, 1 Jan. 2020, pp. 241–46.

[2]. Agarwal, Sumit, et al. “Environmental Regulation as a Double-Edged Sword for Housing Markets: Evidence from the NOx Budget Trading Program.” SSRN Electronic Journal, vol. 96, 2017.

[3]. Jim, C. Y., and Wendy Y. Chen. “Impacts of Urban Environmental Elements on Residential Housing Prices in Guangzhou (China).” Landscape and Urban Planning, vol. 78, no. 4, Nov. 2006, pp. 422–34.

[4]. Wu, Jiansheng, et al. “Impact of Urban Green Space on Residential Housing Prices: Case Study in Shenzhen.” Journal of Urban Planning and Development, vol. 141, no. 4, Dec. 2015, p. 05014023.

[5]. Zhang, R. Y. “Environmental regulation, agglomeration of producer services, and urban housing prices: An empirical study of 278 Chinese cities.” Financial Management Research, no. 1, 2023, pp. 174-195.

[6]. Braconi, Frank. “Environmental Regulation and Housing Affordability.” Cityscape: A Journal of Policy Development and Research, vol. 2, no. 3, 1996.

[7]. Nelson, Arthur C., et al. Environmental regulations and housing costs. Island Press, 2012.

[8]. Chen, S. Y., & Chen, D. K. “Smog pollution, government governance, and high-quality economic development.” Economic Research, vol. 53, no.2, 2018, pp. 15.

[9]. Li, Na, et al. “Factors Affect the Housing Prices in China: A Systematic Review of Papers Indexed in Chinese Science Citation Database.” Property Management, Apr. 2022.

[10]. Yang, Zhenshan, and Yinghao Pan. “Human Capital, Housing Prices, and Regional Economic Development: Will 'Vying for Talent’ through Policy Succeed?” Cities, vol. 98, Mar. 2020, p. 102577.

Cite this article

Fang,Y. (2025). The Price of Green: Environmental Regulation and Its Impact on China's Housing Market. Advances in Economics, Management and Political Sciences,214,22-28.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of ICEMGD 2025 Symposium: Resilient Business Strategies in Global Markets

ISBN: 978-1-80590-353-6(Print) / 978-1-80590-354-3(Online)
Editor: Florian Marcel Nuţă Nuţă, Li Chai
Conference website: https://2025.icemgd.org/CAU.html
Conference date: 20 September 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.214
ISSN: 2754-1169(Print) / 2754-1177(Online)

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