A review of small house policy

Abstract

Small House Policy is long regarded as the special privilege enjoyed by the indigenous villagers. However, current studies mostly focus on the problems created under the policy like the planning and housing issues. This study fills the research gap by exploring how the villager’s custom evolved into a policy. It found that the development of the policy could be predicted under the institutional change theory where the villagers’ perception on the housing tradition and the compensation from the government, together with the poorly designed Small House Policy, eventually develop the conception of special privilege. And the government could not modify the policy to prevent continuing abuse. Later in the study investigated current Small House development process and found that the complicated application procedures and the restriction on sale exhibited high transaction cost. The high cost encouraged the creation of extra-legal alternative development process and result in inefficient property right.