IDEAS home Printed from https://ideas.repec.org/a/gam/jlands/v14y2025i8p1508-d1707024.html
   My bibliography  Save this article

The Limits of a Success Story: Rethinking the Shenzhen Metro “Rail Plus Property” Model for Planning Sustainable Urban Transit in China

Author

Listed:
  • Congcong Li

    (Research Unit Géographie-Cités, Université Paris 1 Panthéon-Sorbonne, Campus Condorcet, 5 Cours des Humanités, 93300 Aubervilliers, France)

  • Natacha Aveline-Dubach

    (CNRS, Research Unit Géographie-Cités, Université Paris 1 Panthéon-Sorbonne, Campus Condorcet, 5 Cours des Humanités, 93300 Aubervilliers, France)

Abstract

Land Value Capture (LVC) is increasingly being emphasized as a key mechanism for financing mass transit systems, promoted as a sustainability-oriented policy tool amid tightening public budgets. China has adopted a development-led approach to value capture through the “Rail plus Property (R + P)” model, drawing inspiration from the Hong Kong experience. The Shenzhen Metro’s “R + P” strategy has been widely acclaimed as the key to its reputation as “the only profitable transit company in mainland China without subsidies.” This paper questions this assumption and argues that the Shenzhen model is neither sustainable nor replicable, as its past performance depended on two exceptional conditions: an ascending phase of a real-estate cycle and unique institutional concessions from the central state. To substantiate this argument, we contrast Shenzhen’s value capture strategy with that of Nanjing—a provincial capital operating under routine institutional conditions, with governance and spatial structures broadly reflecting the prevailing urban development model in China. Using a comparative framework structured around three key dimensions of LVC—urban governance, risk management, and the transit company’s shift toward real estate—this paper reveals how distinct urban political economies give rise to contrasting value capture approaches: one expansionary, prioritizing short-term profit and rapid scale-up while downplaying risk management (Shenzhen); the other conservative, shaped by institutional constraints and characterized by reactive, incremental adjustments (Nanjing). These findings suggest that while LVC instruments offer valuable potential as a funding source for public transit, their long-term viability depends on early institutional embedding that aligns spatial, fiscal, and political interests, alongside well-developed project planning and capacity support in real estate expertise.

Suggested Citation

  • Congcong Li & Natacha Aveline-Dubach, 2025. "The Limits of a Success Story: Rethinking the Shenzhen Metro “Rail Plus Property” Model for Planning Sustainable Urban Transit in China," Land, MDPI, vol. 14(8), pages 1-31, July.
    • Handle: RePEc:gam:jlands:v:14:y:2025:i:8:p:1508-:d:1707024
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2073-445X/14/8/1508/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2073-445X/14/8/1508/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mathur, Shishir, 2019. "An evaluative framework for examining the use of land value capture to fund public transportation projects," Land Use Policy, Elsevier, vol. 86(C), pages 357-364.
    2. Newman, Peter & Davies-Slate, Sebastian & Jones, Evan, 2018. "The Entrepreneur Rail Model: Funding urban rail through majority private investment in urban regeneration," Research in Transportation Economics, Elsevier, vol. 67(C), pages 19-28.
    3. Jing Qian & Yunfei Peng & Cheng Luo & Chao Wu & Qingyun Du, 2015. "Urban Land Expansion and Sustainable Land Use Policy in Shenzhen: A Case Study of China’s Rapid Urbanization," Sustainability, MDPI, vol. 8(1), pages 1-16, December.
    4. Natacha Aveline-Dubach & Guillaume Blandeau, 2019. "The political economy of transit value capture: The changing business model of the MTRC in Hong Kong," Urban Studies, Urban Studies Journal Limited, vol. 56(16), pages 3415-3431, December.
    5. Dunning, Richard J. & Lord, Alex, 2020. "Viewpoint: Preparing for the climate crisis: What role should land value capture play?," Land Use Policy, Elsevier, vol. 99(C).
    6. Kaiji Chen & Haoyu Gao & Patrick Higgins & Daniel F. Waggoner & Tao Zha, 2023. "Monetary Stimulus amidst the Infrastructure Investment Spree: Evidence from China's Loan‐Level Data," Journal of Finance, American Finance Association, vol. 78(2), pages 1147-1204, April.
    7. Félix Adisson & Francesca Artioli, 2020. "Four types of urban austerity: Public land privatisations in French and Italian cities," Urban Studies, Urban Studies Journal Limited, vol. 57(1), pages 75-92, January.
    8. Wang, Jinshuo & Samsura, D. Ary A. & van der Krabben, Erwin, 2019. "Institutional barriers to financing transit-oriented development in China: Analyzing informal land value capture strategies," Transport Policy, Elsevier, vol. 82(C), pages 1-10.
    9. Natacha Aveline-Dubach & Guillaume Blandeau, 2019. "The political economy of transit value capture: The changing business model of the MTRC in Hong Kong [L'économie politique de la captation de valeur foncière (Land value capture): le nouveau modèle," Post-Print halshs-02100616, HAL.
    10. Mathur, Shishir & Smith, Adam, 2013. "Land value capture to fund public transportation infrastructure: Examination of joint development projects' revenue yield and stability," Transport Policy, Elsevier, vol. 30(C), pages 327-335.
    11. Dunning, Richard J. & Moore, Tom & Watkins, Craig, 2021. "The use of public land for house building in England: Understanding the challenges and policy implications," Land Use Policy, Elsevier, vol. 105(C).
    12. Crook, Tony & Whitehead, Christine M E, 2019. "Capturing development value, principles and practice: why is it so difficult?," LSE Research Online Documents on Economics 101263, London School of Economics and Political Science, LSE Library.
    13. Hiroaki Suzuki & Jin Murakami & Yu-Hung Hong & Beth Tamayose, 2015. "Financing Transit-Oriented Development with Land Values : Adapting Land Value Capture in Developing Countries," World Bank Publications - Books, The World Bank Group, number 21286.
    14. Smith, Mark C. & Cuevas, Juan Carlos & Guelton, Sonia & Lord, Alex & Dunning, Richard J., 2025. "The changing tracks of land value capture in constrained policy contexts; A comparison of London’s Crossrail and Grand Paris Express," Land Use Policy, Elsevier, vol. 157(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Weihang Gong & Jing (Victor) Li & Mee Kam Ng, 2021. "Deciphering Property Development around High-Speed Railway Stations through Land Value Capture: Case Studies in Shenzhen and Hong Kong," Sustainability, MDPI, vol. 13(22), pages 1-16, November.
    2. Li, Xinjian & Love, Peter E.D. & Luo, Hanbin & Fang, Weili, 2022. "A systemic model for implementing land value capture to support urban rail transit infrastructure projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 156(C), pages 90-112.
    3. Mouton, Morgan & Deraëve, Sophie & Guelton, Sonia & Poinsot, Philippe, 2023. "Negotiated windfalls: Mapping how public actors pursue and share land-value capture in Nanterre-la-Folie, France," Land Use Policy, Elsevier, vol. 131(C).
    4. Canelas, Patricia & Noring, Luise, 2022. "Governmentalities of land value capture in urban redevelopment," Land Use Policy, Elsevier, vol. 122(C).
    5. Abdi, Mohammad Hamed, 2021. "What the newcomers to transit-oriented development are confronted with? Evidence from Iranian policy and planning," Journal of Transport Geography, Elsevier, vol. 92(C).
    6. Nikos Karadimitriou & Sonia Guelton & Athanasios Pagonis & Silvia Sousa, 2022. "Public Value Capture, Climate Change, and the ‘Infrastructure Gap’ in Coastal Development: Examining Evidence from France and Greece," Sustainability, MDPI, vol. 14(12), pages 1-17, June.
    7. Du, Yao & Sun, Guibo & Heinen, Eva, 2024. "Does subjective wellbeing modify travel behaviour changes among older people in response to a new metro line?," Journal of Transport Geography, Elsevier, vol. 117(C).
    8. Murray, Cameron & Gordon, Josh, 2021. "Land as airspace: How rezoning privatizes public space (and why governments should not give it away for free)," OSF Preprints v89fg, Center for Open Science.
    9. Natacha Aveline-Dubach & Guillaume Blandeau, 2019. "The political economy of transit value capture: The changing business model of the MTRC in Hong Kong," Urban Studies, Urban Studies Journal Limited, vol. 56(16), pages 3415-3431, December.
    10. Chan, Ho Yin & Tse, Wai-Yi & Chen, Anthony, 2025. "Unlocking the gates: Pedestrian route choice in transforming metro station paid areas into mobile public spaces," Journal of Transport Geography, Elsevier, vol. 123(C).
    11. Hayati Sari Hasibuan & Mari Mulyani, 2022. "Transit-Oriented Development: Towards Achieving Sustainable Transport and Urban Development in Jakarta Metropolitan, Indonesia," Sustainability, MDPI, vol. 14(9), pages 1-17, April.
    12. Artioli, Francesca, 2021. "Sale of public land as a financing instrument. The unspoken political choices and distributional effects of land-based solutions," Land Use Policy, Elsevier, vol. 104(C).
    13. Nir Mualam & Andreas Hendricks & Vida Maliene & Eyal Salinger, 2021. "Value Capture and Vertical Allocations of Public Amenities," Sustainability, MDPI, vol. 13(7), pages 1-21, April.
    14. Natacha Aveline-Dubach & Guillaume Blandeau, 2019. "The political economy of transit value capture: The changing business model of the MTRC in Hong Kong [L'économie politique de la captation de valeur foncière (Land value capture): le nouveau modèle," Post-Print halshs-02100616, HAL.
    15. Nikos Karadimitriou & Sonia Guelton & Athanasios Pagonis & Silvia Sousa, 2022. "Public Value Capture, Climate Change, and the 'Infrastructure Gap' in Coastal Development: Examining Evidence from France and Greece [Captation de valeur foncière, changement climatique et le "," Post-Print halshs-03690708, HAL.
    16. Yung Yau & Tin Choi Cheung, 2021. "Revisiting the Concept of the Property State: Private Landowners and Suburban Development in Hong Kong," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(2), pages 427-464, March.
    17. Sun, Guibo & Du, Yao, 2023. "New metro and subjective wellbeing among older people: A natural experiment in Hong Kong," Transportation Research Part A: Policy and Practice, Elsevier, vol. 169(C).
    18. Shengxiao Li & Luoye Chen & Pengjun Zhao, 2019. "The impact of metro services on housing prices: a case study from Beijing," Transportation, Springer, vol. 46(4), pages 1291-1317, August.
    19. Sharma, Rohit & Newman, Peter, 2018. "Can land value capture make PPP's competitive in fares? A Mumbai case study," Transport Policy, Elsevier, vol. 64(C), pages 123-131.
    20. Hengstermann, Andreas & McElduff, Linda & Ritchie, Heather, 2025. "Capturing or compensating? Comparing legitimacies, legitimations and rationales of added value capture instruments," Land Use Policy, Elsevier, vol. 150(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jlands:v:14:y:2025:i:8:p:1508-:d:1707024. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.