How planning intervention changes the “price tags” of property rights? Towards a dynamic understanding of China's small property right housing

Abstract

While studies of property rights have long gone beyond the legal-illegal dichotomy, how to quantify the varying degree of property rights remains a challenging task. Focusing on a special type of informal housing—Small Property Right Housing (SPRH) in China, this study examines how planning intervention affects the pricing mechanism of SPRH through the theoretical lens of graded property rights. A previous study has unravelled the pricing mechanism of SPRH by quantifying the impact of informal institutions inherent to the SPRH market that give different “price tags” to varying degree of property rights, while not being able to capture the impact of external interventions. Drawing on two SPRH datasets before and after a Master Plan of urban villages conservation announced in 2019, we employ difference in difference (DID) estimations to examine how planning intervention affects SPRH prices by way of altering the strength of informal property rights. We also develop spatial error models (SEM) to account for spatial autocorrelation. This research extends and enriches the robust conceptualisation of graded degree of informal property rights by capturing the changes caused by external intervention to offer a dynamic and more accurate understanding of SPRH pricing mechanism. It also demonstrates that planning can go beyond sanctioning and redlining to tolerate and steer informal development.