Urban restructuring along with a transitional institution of land development right
The market called for institutional change to ‘buy out’ the socialist land use right, and the land development right was designed as transitional institution to phase out the former. Drastic urban restructuring ensued, as well as land rent seeking and dissipating. Urban land was virtually free goods. Tenants’ entitlement to land use rights became a unique socialist institution, which was incorporated in the formation of socialist cities. The tenacious socialist land use right was also found in other former socialist Eastern European countries. The Shanghai Municipal Ordinances on Urban Land Management promulgated in 1992 paves the way for land redevelopment in the built-up areas through land leasing by making a clear distribution of revenues from land sales among the parties with vested interests. Prior to 1980, the development of socialist cities was entirely a matter of the state, as the state owned all the means of production.