Abstract: The implementation of innovation-driven strategy is an important support for China′s economic transformation. To clarify the influence mechanism and eliminate the obstacles of urban innovation is the main ideas to improve Chinese urban innovation level. From the perspective of urban housing price management, this paper analyzes the linkage mechanism, effect evaluation and policy choice between house prices and urban innovation, and results show that the present house prices rise hinders urban innovation overall, especially in the first-tier and second-tier cities; the influence mechanism includes the following three ways: knowledge employee mobility, enterprise R&D intensity and the proportion of science and education expenditure in government finance, and the mediating effect shows a declining situation in turn. The local government should position the house price management as an important tool to promote urban innovation: the first-tier cities with excessive rise in house prices should strengthen the control of house prices, the second-tier cities with slight rise should actively promote the return of house prices to normal levels, and the third tier cities should maintain the house price within the existing reasonable range; as to the specific measures, the first and second tier cities should focus on promoting the industrial upgrading of the city, relying on the development of middle and high-level industries to digest the rising pressure of house prices, third tier cities can accept the industrial transfer of the first and second tier cities, relying on low house prices to increase the introduction of talent to provide the necessary talent reserves for urban innovation.

Key words: house price rise, city innovation, restraining effect