Buying a house without a formal title: A property rights perspective for understanding informal housing ownership in Shenzhen, China

Abstract

Informal housing accommodates a large number of populations in the worldwide and has received considerable attention. However, there is still a lack of understanding on the diversified informal settlers and their housing incentives, constraints, and risks they face. Based on existing research on property rights and informal settlements, this study presents a conceptual framework that includes four dimensions of property rights (the right of possession, the right of use, the right to earn rental income and the right of transfer) to explore the de facto property rights of Small Property Rights Housing (SPRH) owners for a better understanding on informal housing ownership and its relationship with formal and informal institutional arrangements in China. In-depth interviews with SPRH owners were conducted to explore the de facto property rights of SPRH ownership. Findings reveal that the “small” property rights shaped by formal and informal institutional arrangements have resulted in unique housing values of SPRH. Such housing values have met a wide range of housing needs and motivated heterogeneous social groups to obtain SPRH ownership in urbanizing China. Constructive attempts to clarify the “small” property rights of SPRH should consider the different social groups of informal housing owners and their diversified housing needs.