Over the past three decades, China’s cities have undergone massive spatial restructuring in the wake of market reforms and economic growth. One consequence has been a rapid migration of urban residents to the periphery. Some movers have been forced out either by rising urban rents or government reclamation of their residences. Others have relocated willingly to modernized housing or for other lifestyle reasons. This article examines the effects of relocation to the urban edge on household well‐being. It explores the factors underlying changes in housing and transportation costs as households move to the periphery. The research also examines whether those who moved involuntarily are affected differently from those who moved by choice. Results show that, relative to those who moved by choice, involuntary movers are disproportionately and adversely affected in terms of job accessibility, commute time, housing consumption and disposable income. The findings also show that, compared with higher‐income households, lower‐income groups are disproportionately affected in relation to housing costs, accessibility losses, disposable income and household worker composition. These results indicate that relocation compensation for involuntarily relocated households should be expanded to include more than just housing value: it should encompass urban location changes, household needs and relocation costs.