Access to housing of sufficient space and quality has been a central elemen
t in social stratification in urban China. We examine the sources of housin
g inequality in 1993 in Shanghai and Tianjin, when a market reform process
had been underway in the national economy for nearly fifteen years. The Chi
nese housing allocation system favors people with political position and co
nnections, those of higher socio-economic background, and those whose work
units have greater organizational authority. There is only slight evidence
that market reform has undermined this stratification order. To the contrar
y, there are reasons to believe that in some respects inequalities rooted i
n socialism are strengthened by institutional changes. These conclusions ar
e reinforced by comparison to results of analyses of income inequality in t
he same cities.