Social Groups andHousingDifferentiationin China’s Urban Villages: AnInstitutional Interpretation
SHENJING HE*, YUTING LIU**, FULONG WU† & CHRIS WEBSTER†
*Sun Yat-Sen University, Urban and Regional Planning, Guangzhou, China, **South China University of
Technology, School of Architecture, Guangzhou, China, †Cardiff University, City and Regional Planning,
Cardiff, UK
(Received March 2009; revised November 2009)
ABSTRACT Possessing different land rights and distinct landscapes, and separated from the rest ofthe city by invisible institutional boundaries, China’s urban villages are unusual enclaves forlandless farmers, rural migrants and other urban hukou (citizenship rights) holders in a period ofrapid urbanization. Although urban villages are well known for their disorder and unruliness, theyprovide temporary livelihood for indigenous villagers and inexpensive shelter for migrants and otherurban residents. Urban villages are typically perceived as homogeneous low-income neighbour-hoods characterized by low quality and high density housing. In fact, housing differentiation hasemerged in urban villages among residents who possess different quantities and types of capital,rights/entitlements, skills and other assets. This paper aims to understand the social groups and thehousing differentiation among them in the Chinese urban villages from an institutional perspective.It is based on a large-scale household survey in 11 urban villages in six Chinese cities. Empiricaldata show evidence of significant housing differentiation within these enclaves: indigenous villagershave become a petty rentier class; rural migrants pay the highest rents while enduring the lowesthousing conditions; and housing conditions for urban hukou holders lie between those of the othertwo groups. Regression analysis suggests that urban villages share similar dynamics of housingdifferentiation as wider urban spaces, i.e. the combination of strong institutional constraints andemerging market influences leads to housing differentiation and inequality. Residents in urbanvillages are also highly mobile. The inflows and outflows of population form an important part of theurban socio-spatial restructuring process.
KEY WORDS: Social groups, housing differentiation, China, urban villages, institution
Introduction
During China’s socialist period, housing was part of the social welfare package offered by
employers to their employees. Housing tenure and housing conditions were generally
homogeneous, despite the fact that housing inequality did, in fact, exist between people
ISSN 0267-3037 Print/1466-1810 Online/10/050671–21 q 2010 Taylor & Francis
DOI: 10.1080/02673037.2010.483585
Correspondence Address: Yuting Liu, South China University of Technology, School of Architecture, State Key
Laboratory of Subtropical Building Science, Guangzhou, 510641 China. Email: [email protected]
Housing Studies,Vol. 25, No. 5, 671–691, September 2010
from different hierarchical positions in the political system. In the post-reform era,
housing tenure security has been threatened in various ways by the commodification of
land and property. These insecurities have grown with the scarcity of land. As the state has
pursued rapid urban-centred economic growth, citizens’ housing security has been
endangered by various forms of urban (re)development activities and land expropriation,
as well as by invisible institutional barriers. In the waves of (re)urbanization, several social
groups are particularly vulnerable (Westendorff, 2007). Laid-off workers have become
vulnerable to housing poverty due to the collapse of state-owned-enterprises and lack of
capital; rural migrants cannot obtain secure and adequate urban housing due to multiple
disadvantages including lack of capital, institutional discrimination and unstable
employment; landless farmers suffer uncertainties about their rights to dwell and derive
income from former village land due to incomplete and insecure property rights over semi-
legal housing they have built on that land (He et al., 2009; Tian, 2008); and those low
income urban residents who live in public rental housing owned and managed by local
housing authorities are threatened by urban redevelopment of the old urban
neighbourhoods in which they live.
Adding to the problem of housing tenure security is the emergence of socio-spatial
differentiation, particularly housing inequality. Studies of China’s housing markets and
residential areas suggest that visible socio-spatial differentiation and housing inequality
have started to emerge in a big way in large cities such as Beijing, Shanghai and Shenzhen,
as a result of growing diversity in all aspects of housing provision and consumption
following economic reforms (e.g. Gu et al., 2005; Li & Wu, 2006, 2008; Lu & Cai, 2006;
Xu, 2007). One important step in China’s wave of housing reforms happened in the late
1990s with the launch of the housing monetarization policy and the housing provident
fund system. Since then, urban homeownership has increased dramatically; urban housing
conditions have improved; and certain historical housing inequalities associated with
the work unit housing provision system have been slightly ameliorated. However, the
country’s housing reforms have not primarily been aimed at eradicating housing
inequalities. They have in fact led to wider housing consumption gaps, greater social
polarization and an embedded pattern of spatial segregation (Lee & Zhu, 2006; Lee, 2000;
Yu, 2006).
Among the driving process, the privatization of public-owned housing and the wave of
rural-urban migration have together imposed a profound influence on housing inequality
and housing poverty (Sato, 2006). Research on migrant housing demonstrates a large
disparity in housing conditions between urban and migrant households, and highlights a
new type of emergent housing poverty (Sato, 2006; Wu W. P., 2002, 2004, 2008). More
generally, socio-spatial differentiation in the Chinese city is the result of the confluence of
historical legacies of inequalities that existed prior to the socialist city; the inequalities
forged under socialism; the fragmentation of public housing provision system; the new
urban development market; globalization and economic restructuring; and rural-urban
migration (Chen & Sun, 2007; Wu F. L., 2002, 2005). Studies from different perspectives
point to a general finding: socio-spatial inequalities rooted in the centrally planned
economy remain and are even strengthened by the institutional changes post-reform, while
market forces have yet to show much influence in redressing these inequalities (Huang,
2003; Li & Huang, 2006; Li & Siu, 2001; Logan et al., 1999; Zhou & Logan, 1996).
The emergence of urban villages is a manifestation of socio-spatial differentiation
unique to China. Being one of the three main types of poor urban neighbourhood
672 S. He et al.
(Liu & Wu, 2006), urban villages provide temporary shelter for several marginal groups
central to the rapid urban-centred wealth accumulation process. Specifically, these groups
include landless farmers whose farmland was forcibly expropriated by the city
government; rural migrants who provide cheap labour to the city while suffering from
institutional discrimination; and employees of small street-run state-owned enterprises
(SOEs) or collective-owned enterprises (COEs). The latter were a marginal group both in
the earlier industrialization period and the post-SOEs/COEs reform period.
Having identified these three groups as being particularly vulnerable to urban poverty,
including housing poverty, their socio-economic and housing conditions are not
homogenous within urban villages. In fact, these three groups display quite different
patterns of access to socio-economic endowments and resources, and their social status
and housing conditions vary substantially as a result. Within urban villages, institutional
ambiguity and informality under market transition have provided these marginal groups
the spaces to live and opportunities to make a living. This paper, therefore, deals with an
important research question: how these groups make use of their own endowments and
resources to develop their own survival strategies, and to create a complex mosaic of social
and physical spaces. As the products of hasty urban expansion and problematic
institutional arrangements (He et al., 2009), urban villages have become both a safety
valve for urban-led economic growth (as the only source of informal-sector low income
housing in the Chinese city), and a source of emergent social problems. They therefore
provide an intriguing case for studying social stratification and housing differentiation at
the neighbourhood scale in urban China.
This paper aims to better understand the dynamics and characteristics of social and
housing stratification in urban villages using institutional reasoning and empirical data
analysis. Specifically, this research analyses the institutional settings and changes which
contribute to social and housing stratification in urban villages, presents empirical
evidence of housing stratification, and examines the factors contributing to housing
stratification using empirical data. The remainder of the paper is organized as follows: the
next section analyses the institutions underlying the formation of urban villages; the
following section scrutinizes the social structures within urban villages; the next section is
an empirical study based on data from a large-scale household survey; and the final section
concludes.
The Institutions Underlying the Formation of Urban Villages
Urban villages are the unusual products of rapid urbanization through land expropriation.
When urban expansion encroaches into rural land, the city government needs to acquire
land rights from the rural collective to convert rural land into urban land. In many cases,
to avoid the costly compensation to relocate villagers, the city government only
expropriates the farmland of the village, and the housing land remains in the hands of the
collective. Over time, the village settlement is surrounded by urban built-up area, creating
the so-called urban village. Some scholars prefer the term ‘urbanized villages’ or ‘villages
in the city’, or the Chinese term ‘chengzhongcun’, in order to avoid the confusion with the
Western planning concept ‘urban village’. Indeed, urban villages in China and urban
villages in the Western planning concept differ in many ways. However, when the
two concepts are scrutinized, some similarities can be found. An urban village in the
West refers to an urban form typically characterized by medium density development,
Social Groups and Housing Differentiation in China’s Urban Villages 673
mixed-use zoning, the provision of good public transit, an emphasis on urban design,
particularly pedestrianization and public space. The idea is to reduce car reliance and to
promote cycling, walking and transit use, to provide a high level of self-containment
(people working, recreating and living in the same area), to help facilitate strong
community institutions and interaction (Aldous, 2003; Gratz, 2001). In a sense, urban
villages in China have some of these characteristics, possibly more so than some so-called
urban villages in the West. These include pedestrianization, accessibility, self-containment,
mixed land use and a high degree of intra-neighbourhood interaction. They also have a
quality that urban village designers in the West would dearly like to see in their creations:
spontaneity, surprise and informality. These latter qualities are a result of their unplanned
development and come at a cost of very poor physical environment, including poor
quality housing.
The notion of the urban village in China has been clearly defined in other scholars’
works (Tian 2008; Zhang et al., 2003). This does not need to be reiterated, but the
institutional context that gives birth to this unusual type of urban settlement should be
emphasized. The formation of urban villages is related to particular institutional
conditions. This study mainly focuses on the institutions of (1) land; (2) hukou; (3) housing
provision; (4) village governance, and how these institutions resulted in social and housing
stratification, and contests between different groups. As will be elaborated in the following
sections, the unique institutional settings in urban villages make them distinct from the rest
of the city, not only in terms of physical appearance, but also in terms of the stratified and
fragmented social structure, which resulted in housing differentiation and a different form
of governance.
The Institution of Land: Dual Land System
First, it is the result of the redistribution of property rights under the dual land system.
The village collective is the legal owner of rural land, while the city government is the
legal owner of urban land. By law, collective land has to be transformed into urban land
through land expropriation before it can be circulated in the land market. This rule is
currently under intense scrutiny and subject to review.1 For now, however, it is still a
fundamental foundation of Chinese land law and no national policy yet exists that allows
village collectives to directly engage in land conveyance without first converting their
rural land to urban land (tudi liuzhuan in Chinese). The practice of rural land conveyance
directly from the collective to firms for the purpose of housing development is still
prohibited. However, the practice of transferring land use rights from the collective
directly to an enterprise is not uncommon. Allowing direct rural land conveyance
is considered to be the ‘fourth land revolution’ in China. But the adaptation of this
law is still at an early stage and national policy has not yet been published to regulate
the practices. What type of change it would bring to China’s land development is
still uncertain.
During the last two decades, city governments have made huge fortunes by capturing
the price difference between rural and urbanized land. The cost of land to governments
is determined by administrative rules relating to compensation. However, the price is
determined by the leasehold market. It is local governments who pocket the difference.
Until very recently, villagers had not been thought of as having any rights to the profits
generated by the urbanization of rural land (He et al., 2009).
674 S. He et al.
Compared to the landless farmers who have lost both their farmland and housing land,
farmers in urban villages are fortunate. Since the housing land remains in the hands of the
collective, every indigenous village household is entitled to unlimited use rights of their
housing land under the framework of collective ownership (Zhang et al., 2003). After
losing their major source of livelihood and typically remaining outside the mainstream
urban labour market (because of an absence of urban labour skills), villagers develop a
survival strategy through building houses on their land and starting small rental
businesses. In well-located villages in the coastal cities, the village collectives sometimes
also rent out consolidated land to industrial enterprises, but this requires a higher degree of
organization, access to capital and negotiating skills. Most villagers enter the residential
development and rental market, which has proved to be surprisingly easy for these
ex-agriculturalists. In many cases, the village collectives also establish stock
share-holding companies to manage their rental businesses. Indigenous villagers are
entitled to share the dividend of the collective economy.
In cases where farmers have lost both their farmland and housing land through land
expropriation, the dual land system results in a catastrophic decline in villagers’
entitlement and pushes them into the trap of impoverishment. However, in urban villages,
farmers have turned the dual land system into an advantage. From the collectively owned
land left after farmland expropriation, they generate considerable earnings from renting to
rural migrants.
The Institution of hukou and Housing Provision: Migrant Worker Housing Scarcity
Second, the formation and densification of urban villages is directly attributable to the
absence of other viable housing provision for migrants. Until the recent slight drop in
economic growth rate and the reported return-migration, there were more than 200 million
rural migrants in China’s towns and cities. Housing deficiency is the biggest issue for
migrants. They do not have any access to public housing and they cannot generally afford
the housing in the formal rental market. Studies by W. P. Wu (2002, 2004, 2008) and Shen
(2002) show that urban villages have provided extensive and inexpensive shelter for rural
migrants. Zhang et al. (2003) suggest that urban villages provide a source of self-help
housing for rural migrants and other low-income residents. In a sense, urban villages have
absorbed part of the potential social instability caused by rapid urbanization and the city’s
immense demand for cheap labour from the countryside.
The enormous demand for affordable urban village housing by rural migrants results
from institutional deficiency and discrimination. This makes possible the widespread
rent-seeking behaviour practised by indigenous villagers and the formation of a highly
responsive and sometimes lucrative informal housing market within urban villages. This is
driven by market forces (demand from rural migrants, supply by villagers) but is
fundamentally rooted in market transition, in which institutional deficiency is a deliberate
design to feed the rapid urban-based economic growth with cheap labour. Affordable
housing for rural migrants supplied by urban villages has become one of the important
elements of China’s urban growth. If urban villages were not there, something would have
to replace them. Given the state’s strong control over land in China, this would inevitably
mean subsidized low-cost housing and higher cost urban growth. The state, therefore,
tolerates the emergence and development of urban villages to maintain the low-cost
growth pattern.
Social Groups and Housing Differentiation in China’s Urban Villages 675
The Institution of Village Governance: Vacuum of State Regulation
Third, there is a vacuum of state regulations in urban villages. Since villager-controlled
collective land is not considered an official part of the city, the formal urban institutions,
such as infrastructure provision, social welfare provision and urban planning are not
applicable in the villages. In the view of city government, the villages are illegal
constructions rather than an integrated part of the city. They are considered an urban
pathology that is incompatible to the modern city image. This sets up a paradox that is not
easily accommodated in political and professional narratives and policy: urban villages are
pathological and need to be redeveloped to achieve healthy and efficient modern cities but
they are needed to house rural migrants. Fundamentally, the dichotomy of urban and
collective land ownership results in a deep division between urban villages and the rest of
the city. Where villagers retain their rural hukou, the division between urban villages and
other parts of the city is even deeper. Although in many cities urban village committees
have been converted into ‘residents’ committees’, the membership of these committees
often remains unchanged. The name change does not really alter the way the villages are
managed and governed. Village society remains, although physically it has become part of
the city. The village economy also continues, often in the form of economic union ( jingji
lianshe in Chinese) or share-holding companies engaging in land and housing rental
businesses (Tian, 2008). Even in the cases when the city government has assigned new
members to the newly formed ‘residents’ committee’, the economic union or the share-
holding company still remains the major governing agent in the village.
To a large extent, urban villages are disassociated from formal urban institutions and
have emerged as self-organized micro-territories, managed by village collectives and by
individual villagers themselves. However, this is not a stable state of affairs. Further waves
of land expropriation and urban redevelopment can result in the dissolution of an urban
village. Many city governments have shown a high degree of tolerance so far, partly
because of the high cost of compensation and partly, no doubt, because of a degree of
acceptance that villages are needed to house a city’s low cost migrant labour. This
temporary tolerance has given rise to the excessive construction of high density low
quality housing and the thriving informal housing market inside urban villages.
These unusual institutional conditions set the scene for the contesting of space within
and surrounding urban villages. Conflict, negotiation and compromise characterize the
relationships between the different interest groups that include the city government,
neighbouring urban areas, village collectives, individual villagers, rural migrants, other
urban hukou holders renting from villagers. These interests are constantly competing for
space, including space for housing and space for livelihood. Within urban villages, the
ambiguous land rights put indigenous villagers in an advantageous position to negotiate
with the other interest groups. As a result, the vast majority of indigenous villagers have
become a small rentier class extracting high margins from their rental businesses.
With regard to conflict and negotiation between villages and other parts of the city,
village collectives needs to actively confront the city government and nearby urban
neighbourhoods in order to protect their properties from demolition and redevelopment or
from neighbouring redevelopment that would affect their livelihood. If the municipal
governments of China tend to behave like revenue maximizing firms, making money out
of land conversion, then urban villages act like mini-firms seeking to protect their own
landed interests from the predatory governments whose jurisdiction surrounds them.
676 S. He et al.
Although temporarily remaining as the legal landowner, the village collective is not
always the winner in these conflicts. The city government can very quickly take away the
collective’s land rights through another round of land expropriation. The tolerance that has
been noted means that there are many urban villages existing and emerging in most
Chinese cities, especially large cities. In some cities, however, policy has been enacted
that effectively serves notice on its village collectives. Wuhan, for example, has expressed
the determination to remove most of its urban villages in the name of urban redevelopment
and city beautification.
The remainder of this paper focuses on the interaction and stratification among different
social groups within urban villages. The aim is to understand the dynamics of social and
housing differentiation inside the villages by examining the emerging informal housing
rental market fostered by the unusual institutional arrangements that have given rise to the
urban village phenomenon.
Social Groups in Urban Villages
Housing conditions for different social groups in urban villages are not uniform, but
stratified. As mentioned previously, there are three major social groups in urban villages:
indigenous villagers, rural migrants and other urban hukou holders, including those with
local urban hukou and urban hukou from other cities.
For indigenous villagers, i.e. the landless farmers, urban villages not only provide space
for living, but a new form of temporary livelihood. For rural migrants, urban villages
provide inexpensive and convenient housing. There are also many employment
opportunities within urban villages, mostly in the informal service sector. Some have
managed to start their own small businesses, responding to the large demand for services
in urban villages. Urban hukou holders are mainly employees who used to work in those
small-scale and mostly street-run SOEs or COEs that were built on land that used to belong
to the village collective. Some of these SOEs and COEs rented a piece of land from a
village collective and built small-scale danwei (work unit) housing for their employees.
However, most of them were too small to be able to provide housing and their
employees had to rent in urban villages nearby and received financial subsidies in lieu of
direct housing subsidy. Some employees managed to build their own housing on the land
rented to their employers by the village collective. This group also includes a small
number of migrants with urban hukou from other cities, who are relatively better off
compared to rural migrants. Many of them were among the first wave of migrants to the
city and found cheap accommodation in the urban villages. They have often become
established in the micro-economy of the urban village, running grocery stores,
barbershops, small restaurants and so on.
These three social groups possess different endowments and resources, notably, capital,
skills, land rights and social entitlements. Indigenous villagers are obviously the most
advantageous group, possessing the use rights to the housing land in the village. They have
therefore become a privileged class in the village. Due to the constraints of educational
attainments and skills, they have generally failed to find more conventional jobs in the city.
Building and renting houses has therefore become the easiest way for them to make a
living with relatively high short-term returns.
In many urban villages, especially those in south coastal cities, share-holding
companies have been established to manage collective rental businesses. These companies
Social Groups and Housing Differentiation in China’s Urban Villages 677
develop various strategies to expand their rental businesses and maximize their margins.
Since the 1990s, village share-holding companies have collected money from indigenous
villagers and built factory workplaces, warehouses and apartments for rent and even for
sale, with profits shared among the villagers. Taking advantage of the ambiguous property
rights and the vacuum of state regulation, indigenous villagers are at the top of the social
ladder in urban villages. They are the housing providers and rentier class in urban villages.
Those urban hukou holders who have access to danwei housing or self-built housing in
urban villages are also comparatively privileged. However, they only have rights to the
housing for their own use rather than to the housing land itself, which means they are
unlikely to engage in renting business. Those urban hukou holders who rent from
indigenous villagers are less privileged still. Their housing conditions and housing rent are
determined by the informal housing market and the market broadly balances housing
supply and demand. In urban villages where the location is good and offers more job
opportunities, the rent is relatively higher and housing tends to be overcrowded. In urban
villages located on the city’s periphery, implying higher costs of commuting, the rent tends
to be cheaper while the infrastructure and housing facilities are less developed. Compared
to the rural migrants who rent alongside them, urban hukou holders are in a better position,
since they generally possess better quality and quantity of capital and skills, particularly
commanding higher incomes and having higher educational attainment. Compared to
indigenous villagers, this group is in a less advantageous position, not only because of lack
of rights to land but because they lack the closely organized social networks and
village institutional arrangements. With regard to conflicts between these two groups, the
indigenous villagers tend to have the upper hand. Urban hukou holders are therefore on
the second from top rung of the social ladder within urban villages.
Rural migrants have limited capital and skills and have access neither to subsidized
housing nor housing land in urban villages. They face double institutional discrimination,
in terms of housing and employment. Rural migrants are therefore the most disadvantaged
group within urban villages. As with urban hukou holders, the rent they pay and the
housing conditions offered by the villager landlords are adjusted by the supply-demand
relationship in the informal housing market. Market rent and housing conditions are
determined by the negotiation between indigenous villagers and rural migrants. In most
cases, rural migrants are in a very weak position to negotiate. However, in villages where
migrants from the same place of origin live together and are closely bonded by social
networks or kinship, it is noticeable that they can achieve more bargaining power over
conditions and rent. In this paper, the approach is not to investigate in great detail the
internal power structure of villages or the conflicts and negotiations between different
groups. Rather, an attempt is made to examine the influence of various indicators of
capital, skills, property rights and social entitlements to explain the dynamics of housing
differentiation. This is done using regression models. In particular, social networks are
included as an indicator of social capital to understand how it helps individuals, especially
those less advantaged rural migrants, to negotiate for better housing conditions in
urban villages.
Housing Differentiation in Urban Villages
To understand the patterns of housing stratification, empirical data are analysed that
were collected from a large-scale household survey in six Chinese cities. This survey
678 S. He et al.
is part of a bigger research project examining patterns of urban poverty and their
institutional causes and also looking for evidence of institutional innovations that have
emerged as individuals and organizations seek to negotiate more secure access to vital
civic goods and services.
Considering the complexity of the issue and the size of the Chinese urban population,
the surveyed cities were distributed in the coastal, central and western regions respectively
and included Xi’an, Guangzhou, Nanjing, Wuhan, Harbin and Kunming. Beijing and
Shanghai were not selected, because urban villages do not exist in the central city due to
strict land use control by the local authorities. In addition, it is necessary to look beyond
the experience of Beijing and Shanghai, two cities most familiar to the Western readers, to
portray a real picture of the Chinese city.
Xi’an is an industrial city in the north-western region and the capital city of a
comparatively underdeveloped hinterland. Guangzhou represents south coast cities that
have experienced a high level of marketization and openness. It is one of most developed
cities in China and has attracted a large number of migrants both from rural areas and other
cities. Nanjing represents a developed east coast city, also a provincial capital with a
strong industrial base. Fed by a comparatively developed hinterland, Nanjing enjoys a high
level of economic prosperity. Wuhan is a city in the central region with heavy industry.
It suffers from economic restructuring but is relatively better positioned in the process.
Partly due to its strategic location, Wuhan has developed a vibrant market economy,
attracting many migrants. Harbin is a city with severe de-industrialization problems. It is a
typical post-industrial city located in a less developed region and struggling to survive the
collapse of SOEs/COEs and high unemployment rates. Kunming is in the underdeveloped
south-western region and lacks industrialization. It suffers less from the economic
restructuring, and also has a smaller share of the economic dividends. According to local
statistics, by the end of 2008, there were around 72 urban villages in Xi’an; 139 in
Guangzhou; 71 in Nanjing; 147 in Wuhan; 43 in Harbin; 288 in Kunming.
In each city, two urban villages were selected, one from the inner city, the other one
from the urban fringe. In Harbin, where the progress of urbanization is comparatively
slow, only one urban village was selected, given the relatively small number of urban
villages in the city. In each village, households were selected based on their addresses,
using a fixed interval approach. Questionnaires were distributed to household heads.
Questions included socio-economic information pertaining to heads and their households,
e.g. hukou status, income and expenditure, education, employment, housing status,
commuting and relocation experiences. On average, 75 questionnaires were distributed in
each urban village, yielding 796 effective questionnaires from the 11 selected urban
villages. This is a survey of a purposive sample of urban villages in six representative
cities. The paper does not attempt to compare differences between these six cities, but
makes comparisons between different social groups located in similar physical and
institutional settings.
In addition to a general comparison of social groups in urban villages in the previous
section, Table 1 provides more details of the three groups. Among the three groups,
indigenous villagers have the largest household size and lowest schooling years.
Surprisingly, their reported monthly income per capita is relatively low. This is mainly
because most indigenous villagers are very cautious about disclosing their real income.
They therefore tend to under-report their rental income. In addition, indigenous villagers
have a larger household size, particularly a larger number of dependent children than the
Social Groups and Housing Differentiation in China’s Urban Villages 679
other two groups, which lowers the monthly income per capita. Nevertheless, 9.9 per cent
of indigenous villagers, the highest percentage among the three groups, reported that they
have more than 50 000 RMB household saving. This suggests that indigenous villagers
have actually accumulated a considerable amount of wealth, contrasting to their under-
reported monthly income. In all three groups more than half the respondents reported that
they have friends and relatives living in the same neighbourhood. Naturally, indigenous
villagers have the largest number of acquaintances, while the two groups have much
smaller numbers. In terms of household head’s occupation, urban hukou holders have a
higher profile than the other groups. Approximately one-third of urban hukou holders are
managers, professionals and technicians, while more than half of indigenous villagers are
engaged in the informal sector or are unemployed. For rural migrants, the most common
occupations are being self-employed and manual workers. Judging from the statistics from
the household survey, indigenous villagers do not have a higher socio-economic profile
than the other two groups, in terms of household structure, education attainment and
occupation. In a way, this suggests that the differentiation between the three groups mainly
lies in the entitlement to and the institution of land rights, as depicted in the previous
section.
Table 2 compares housing tenure between the three groups. It can be seen that the ratio
between the number of households in the first group and the other two is approximately
1:2.5 and 1:3.5 respectively. After subtracting the number of households living in non-
private-rental housing, on average one indigenous villager household provides rental
housing for one urban household and 3.2 migrant households. Contrary to the prevailing
perception, there is a variety of housing tenure in urban villages. Private rental and self-
built housing are two major types of housing tenure, which take up 60.7 per cent and 23.9
per cent of the total respectively. The remaining 15.4 per cent are public rental housing,
privatized public housing and subsidized/welfare housing. These houses mainly belong to
the type of small SOEs and COEs that have already been mentioned, which occupy land
that used to belong to the village collectives. These enterprises built small-scale housing
Table 1. Comparison of three social groups
Indigenousvillagers
Urban hukouholders
Ruralmigrants Total
No. of households 112 272 412 796Household size 4.08 3.77 4.05 3.96Schooling years 8.10 10.07 8.26 8.86Average monthly income/capita 584.21 836.94 582.93 665.80Household saving above 50 000 (%) 9.9 9.2 4.9 7.1Friends/relatives living in the sameneighbourhood (%)
76.8 50 52.9 55.7
No. of acquaintances 238.55 58 43.8 76.24HH occupation (%)Manager 1.8 8.5 5.3 5.9Professional 7.1 10.3 8.0 8.7Technician 2.7 10.7 7.5 7.9Self-employed 17.9 19.5 38.6 29.1Manual worker 17.9 19.9 29.6 24.6informal job/ unemployed 52.7 31.3 10.9 23.7
680 S. He et al.
complexes and either assigned or sold them to their employees. These enterprise-owned
houses only represent a very small proportion of housing units in the villages. Most
employees of these small-scale enterprises have had to rely on private rental housing or
self-built housing. Out of 796 respondents, only 12 households live in commodity housing,
which are in fact resale privatized public housing.
All indigenous villagers are homeowners, of which 89.3 per cent own self-built
housing that they rent out as well as live in and 10.7 per cent own inherited housing.
The latter group for various reasons have not managed to build new houses for renting.
Of the urban hukou holders, 40.8 per cent of households live in private rental housing.
34.2 per cent of them live in self-built housing and inherited housing, which suggests that
these people have been living in urban villages for a long time before the land value
increased. A total of 9.2 per cent of the urban hukou holders possess privatized pubic
housing and 7.4 per cent of them live in subsidized/welfare housing. These are the people
who used to work in small-scale SOEs and COEs. After housing reform, they purchased
the houses they rented from their employers at a heavily discounted rate. Since there are
not many SOEs and COEs in urban villages, only a limited amount of housing is in the
privatized public housing or subsidized/welfare housing categories.
The majority of rural migrants live in private rental houses. Only 3.4 per cent rent
danwei housing from small SOEs or COEs employees, and 6.3 per cent live in self-built
housing. Self-built housing for migrants only happened in urban villages where the land
value is comparatively low, and the contests over land rights are less acute. In addition, the
land rented to migrants by the village collective is usually fragmented and inaccessible,
which would otherwise have been turned into high density rental developments by
indigenous villagers. The so-called self-built housing for rural migrants are usually very
crude houses built as temporary shelters on the vacant land. When the land rent increases
or the village collective decides to clarify land rights, it is quite predictable that these rural
migrants will be driven away.
Table 3 compares housing conditions and housing expenditure among the three groups.
This table shows clear signs of housing stratification between indigenous villagers, urban
hukou holders and rural migrants, in terms of average housing floor area, housing quality
and satisfaction with housing conditions. Indigenous villagers are at the top of the
housing ladder with respect to various measurements of housing condition, rural migrants
are at the bottom, and urban hukou holders are in between. The ratio of average housing
floor area between urban hukou holders and villagers is 1:1.7 and 1:3 between migrants
Table 2. Comparison of housing tenure
Indigenousvillagers
Urban hukouholders
Ruralmigrants Total
No. of case 112 272 412 796Private rental (%) 0.0 40.8 90.3 60.7Danwei rental (%) 0.0 4.0 3.4 3.1Self-built (%) 89.3 23.5 6.3 23.9Inherited (%) 10.7 10.7 0.0 5.2Privatized public housing (%) 0.0 9.2 0.0 3.1Subsidized/welfare housing (%) 0.0 7.4 0.0 2.5Commodity housing (%) 0.0 4.4 0.0 1.5
Social Groups and Housing Differentiation in China’s Urban Villages 681
and villagers. Indigenous villagers and urban hukou holders also enjoy much better
housing quality than rural migrants, and they are more satisfied with their housing
conditions. However, rural migrants spend much more on housing than the other two
groups. Comparing the housing expenditure ratio (the ratio of housing expenditure to
total household expenditure) between the groups, indigenous villagers and urban hukou
holders spend a relatively small proportion of their household expenditure on housing
(5.04 per cent and 9.13 per cent respectively), whereas rural migrants spend 16.86 per
cent of total household expenditure on housing. Urban hukou holders have the advantage
of either owning their homes, having purchased them at a discounted price, or live in
subsidized housing. Villagers have the advantage of owning their homes and also owning
rental accommodation. Migrants have no such advantage and have to spend a
considerable proportion of their household expenditure on renting housing.
Table 4 compares housing mobility and changing housing conditions in the last 10
years. First, the number house moves are compared between the three groups. The rather
low values in the Table do not seem to reflect an accurate picture of housing mobility,
which intuitively should be higher. These responses show a different pattern of housing
Table 3. Comparison of housing conditions and expenditure
Indigenousvillagers
Urban hukouholders
Ruralmigrants Total
Average housing area per capita 43.58 26.27 14.56 22.61Housing quality indexa 0.58 0.49 0.32 0.41Satisfaction indexb 0.60 0.55 0.51 0.54Housing expenditure (yuan/month) 167.06 156.73 272.88 218.30Housing expenditure ratio 5.04 9.13 16.86 12.56Average income per capita(yuan/month)
512.60 817.85 607.07 665.80
Note: a Housing quality index ¼ SXi/6. It is a composite of six qualitative aspects of housing, each givena binary value {1,0}: private kitchen; private bathroom; electric shower; liquefied or piped gas; airconditioning; and Internet.b Satisfaction index ¼ SXi/50. It compounds interviewee’s satisfaction with their current housingsituation for 10 dimensions: housing area; housing quality; community services; schools and nurseries;markets and commercial services; transportation conditions; public security; hygiene; green space; overallsatisfaction. A single scale (0 ¼ not applicable, 1 ¼ very dissatisfied, 2 ¼ dissatisfied, 3 ¼ neutral, 4 ¼satisfied, 5 ¼ very satisfied) is used to calculate the index.
Table 4. Comparison of housing mobility and changing housing conditions in last decade
Indigenousvillagers
Urban hukouholders
Ruralmigrants Total
Number of moves 0.35 0.68 1.44 1.01Significantly improved (%) 0.0 4.5 4.0 3.6Slightly improved (%) 1.9 8.7 16.0 11.6No change (%) 50.9 50.0 47.7 48.9Slightly deteriorated (%) 21.3 20.1 27.4 24.1Significantly deteriorated (%) 25.9 16.7 4.9 11.8
Total (%) 100 100 100 100
682 S. He et al.
mobility in each of the three groups. Rural migrants not surprisingly have the highest
housing mobility, while urban hukou holders are less mobile and indigenous villagers are
the most stable. Surprisingly, in the light of extensive village building, there are quite a
few indigenous villagers who reported deteriorated housing conditions. This is the result
of villagers making a trade-off between rental income and personal housing consumption.
To make as much money as possible, villagers have invested in taller and bigger structures
on their fixed land supply. Over time, the villages have become overcrowded and the built
environment in the village inevitably deteriorates. Urban hukou holders in the village also
appear to suffer from the overcrowded and worsening built environment. Among the rural
migrant group, a greater proportion of respondents reported improved housing conditions.
This is mainly due to their comparatively low expectations on housing in the city. There
are some who have managed to move up the housing ladder after living in the city for a
while. Some have also moved down the housing ladder, and this is likely to be either in
order to save money for other household expenditures or because of having to take a lower
paid job.
Table 5 shows the results of three linear regression models, on average floor area,
housing quality index and housing expenditure ratio, respectively. The purpose is to
examine how housing conditions in urban villages are affected by various predictors.
Independent variables are grouped into three categories. The first category is capital and
skills, covering household income and saving, a series of indicators of human capital and
social capital, and household head’s occupation. The second category is property rights
and social entitlements, including hukou status, MLSS (Minimum Living Standard
Scheme, which provides social relief or assistance to poor urban households by the local
government) subsidy, and housing tenure. Hukou is considered as an indicator of property
rights and social entitlements, because it is associated with a bundle of citizenship rights,
including access to public education, housing, healthcare and employment to a lesser
extent. The third category includes indicators of household structure, the location of the
urban village, and the city in which urban villages are located.
First, there is a look at the regression model for average floor area. Income and saving
are two of the most important independent variables decisive for housing differentiation.
Surprisingly, ‘schooling years’ is negatively associated with average floor area for the
reference class in the model: non-local rural hukou (rural migrant) informal sector workers
renting privately. This suggests that for this group of respondents, the effect of human
capital has been weakened by land rights and other institutional and life chance factors.
Among other indicators of human capital, only business licence is statistically
correlated with living space. This can be explained by the fact that many families running
small business in the villages, such as grocery shops, barbershops or small restaurants, are
often combining living space and business-operating space. Therefore, their living space
tends to be slightly larger. Household head’s occupation does not show statistical
significance in this regression model. Looking at the indicators of property rights, local
urban hukou shows strong statistical significance. Other household attributes being equal,
rural migrants have a significantly smaller amount of living space than local urban hukou
holders whom they compete against in the urban village rental market. This is probably
due to rural migrants’ greater willingness to forgo comfort in order to save or remit more
or because of higher education and medical costs.
With private rental tenure set as a reference, self-built housing, inherited housing and
commodity housing offer significantly more floor space. Among all predictors in the
Social Groups and Housing Differentiation in China’s Urban Villages 683
Table
5.
Lin
ear
regre
ssio
nm
odel
of
floor
area
,housi
ng
qual
ity
and
housi
ng
expen
dit
ure
rati
o
Av
erag
efl
oo
rar
eap
erca
pit
aH
ou
sin
gq
ual
ity
ind
exH
ou
sin
gex
pen
dit
ure
rati
o
BT
rati
oB
Tra
tio
BT
rati
o
Co
nst
ant
15
.66
21
.82
2*
0.1
08
1.7
15*
25
.67
26
.39
2*
**
Capitalandskills
Inco
me
an
dsa
vin
gH
ou
seh
old
inco
me
0.1
15
3.1
14
**
*0
.16
65
.51
8*
**
0.0
14
0.3
69
Ho
use
ho
ldsa
vin
g0
.09
92
.75
1*
**
0.1
19
4.0
22*
**
20
.04
82
1.3
21
HH
hu
ma
na
nd
soci
al
cap
ita
lS
cho
oli
ng
yea
rs2
0.0
74
21
.85
0*
0.0
49
1.5
13
20
.04
22
1.0
49
Par
tym
emb
ersh
ip2
0.0
21
20
.61
10
.01
50
.54
40
.00
70
.20
8H
ealt
hco
nd
itio
n1
0.0
09
0.2
82
20
.02
22
0.8
36
20
.02
92
0.8
98
Bu
sin
ess
lice
nse
0.0
59
1.6
98
*0
.02
30
.80
30
.13
23
.78
9*
**
Dri
vin
gli
cen
se0
.03
51
.01
40
.05
41
.91
5*
20
.03
62
1.0
56
Tra
inin
g0
.03
10
.85
22
0.0
05
20
.17
92
0.0
25
20
.68
9F
rien
ds/
rela
tiv
esli
vin
gin
the
sam
en
eig
hb
ou
rho
od
0.0
19
0.5
44
0.0
07
0.2
40
20
.02
72
0.7
81
No
.o
fac
qu
ain
tan
ces
0.0
04
0.1
17
0.0
29
1.0
10
0.0
13
0.3
67
HH
occ
up
ati
on
(ref
:in
form
aljo
b)
Man
ager
20
.01
32
0.3
43
0.0
55
1.7
77*
20
.01
42
0.3
56
Pro
fess
ion
al2
0.0
26
20
.64
20
.06
51
.96
6*
20
.05
92
1.4
61
Tec
hn
icia
n2
0.0
35
20
.87
10
.01
60
.49
92
0.0
20
20
.49
8S
elf-
emp
loy
ed2
0.0
07
20
.13
30
.07
81
.92
4*
0.1
12
2.2
47
**
Man
ual
wo
rker
0.0
35
0.7
87
0.0
21
0.5
61
20
.05
72
1.2
58
Property
rights
andentitlem
ents
Hu
kou
(ref
:n
on
-lo
cal
rura
lh
uko
u)
Lo
cal
urb
anh
uko
u0
.10
52
.00
3*
*0
.10
82
.50
8*
*2
0.0
63
21
.20
3L
oca
lru
ral
hu
kou
0.0
02
0.0
41
20
.00
32
0.0
72
20
.07
42
1.5
79
No
n-l
oca
lu
rban
hu
kou
0.0
33
0.9
01
0.0
22
0.7
53
20
.08
22
2.2
75
**
ML
SS
Rec
ipie
nt
20
.04
52
1.3
43
20
.03
52
1.2
95
20
.01
72
0.5
01
Ho
usi
ng
ten
ure
(ref
:p
riv
ate
ren
tal)
Pu
bli
cre
nta
l2
0.0
06
20
.18
70
.06
72
.49
4*
*2
0.0
56
21
.68
4*
Sel
f-b
uil
th
ou
sin
g0
.41
17
.93
9*
**
0.4
13
9.7
48*
**
20
.20
62
3.9
54
**
*In
her
ited
ho
usi
ng
0.1
53
3.9
45
**
*0
.12
33
.86
9*
**
20
.07
92
2.0
40
**
Pri
vat
ised
pu
bli
ch
ou
sin
g0
.03
30
.91
70
.11
94
.03
1*
**
20
.08
02
2.2
21
**
684 S. He et al.
Su
bsi
dis
ed/w
elfa
reh
ou
sin
g0
.04
81
.40
00
.12
74
.51
6*
**
20
.08
52
2.4
68
**
Co
mm
od
ity
ho
usi
ng
0.0
70
2.0
75
**
0.1
42
5.1
58*
**
20
.05
22
1.5
45
Household
structure
andothers
HH
age
20
.02
32
0.5
24
0.0
35
0.9
64
20
.04
92
1.1
04
HH
mar
ital
stat
us2
0.0
94
2.6
59
**
*2
0.1
05
23
.61
4*
**
20
.00
22
0.0
42
Ho
use
ho
ldsi
ze2
0.0
99
22
.85
2*
**
20
.07
42
2.6
00*
*2
0.0
11
20
.30
4N
o.
of
un
emp
loy
ed2
0.0
42
21
.14
82
0.0
05
20
.17
02
0.0
07
20
.17
9N
o.
of
dep
end
ent
chil
dre
n2
0.0
17
20
.49
20
.02
10
.72
52
0.0
10
20
.29
2V
illa
ge
loca
tio
n3
0.0
23
0.6
29
20
.07
42
2.4
68*
*2
0.0
86
22
.33
6*
*C
ity
ref:
Ku
min
gX
i’an
20
.06
82
1.4
97
20
.09
72
2.5
90*
*2
0.1
73
23
.75
7*
**
Gu
ang
zho
u2
0.0
75
21
.77
4*
0.2
11
6.0
57*
**
0.1
62
3.7
89
**
*N
anji
ng
20
.07
32
1.6
93
*2
0.0
64
21
.80
7*
20
.05
42
1.2
40
Wu
han
0.0
24
0.5
51
0.1
76
4.9
97*
**
20
.09
52
2.1
85
**
Har
bin
20
.00
12
0.0
32
20
.01
72
0.4
94
0.0
21
0.5
18
Ad
just
edR
squ
are
0.2
28
29
.99
95
30
.48
1.2
19
23
0.2
19
14
.02
41
33
5S
td.
Err
or
of
the
esti
mat
e
No
tes:
*p,
0.1
;*
*p,
0.0
5;
**
*p,
0.0
11
1¼
mo
reth
an3
0d
ays
sick
leav
e/y
ear,
0¼
less
than
30
day
s;2
1¼
sin
gle
,o
rm
arri
edb
ut
do
no
tli
ve
wit
hsp
ou
se,
or
div
orc
ed/w
ido
wed
,0¼
mar
ried
and
liv
eto
get
her
31¼
per
iph
ery
,0¼
cen
tral
.
Social Groups and Housing Differentiation in China’s Urban Villages 685
regression model, self-built housing has the strongest effect in increasing average
floor area. The exertion of a (de facto) right to build one’s own housing at a relatively early
stage of urban village development gave these early rural migrants an advantage in living
conditions. Among household structure variables, only household head’s marital status
and household size show statistical significance. Married rural migrants who live with
their spouses obviously have smaller floor area per person than those who do not have
spouses or do not live with them. Similarly, large household size lowers average floor area.
This shows that rural migrant renters do not have the luxury of increasing housing
consumption in line with household housing space needs. Although the location of the
village does not show statistical significance, the city in which the village is located does
matter. With Kunming as a reference, both Guangzhou and Nanjing are negatively
associated with average floor area, since both cities are heavily populated and have
extremely high densities.
Turning to the regression model of housing quality index, a similar result to the floor
area model is found. Household income and savings are strongly associated with better
quality space. This reveals the existence of a degree of sophistication in this apparently
disorganized housing market. Money (small increments of it) can apparently buy better
quality, which given the overall quality of urban village properties, must come in small
increments. Among the eight indicators of human and social capital, interestingly, only
having a driving licence is significantly associated with housing quality index. Holding
income constant, being able to drive implies better housing quality. This is probably
because people who can drive do favours for landlords, e.g. they are occasionally asked by
landlords to run errands, so that those with a driving licence have access to better quality
housing without paying extra rent.
In terms of household head’s occupation, being a manager, a professional or
self-employed improves housing quality for rural migrant renters. In urban villages,
self-employed status means having the capital to start a small business. These people may
not have more income (income is held constant in the model) but they may have used the
same advantage that led them to start up a business to negotiate a better quality home
rental. This also seems to imply that household heads who are managers, professionals or
are self-employed tend to invest more money to improve their housing quality whereas
they may not invest to improve floor area. This may indicate that the elasticity of supply of
housing quality is greater than that of extra floor space. This makes sense since it is
relatively easier for a landlord to invest in internal space improvements, and a quality-
differentiated market can develop more easily than a size-differentiated housing market.
In the category of property rights and entitlements, again, local urban hukou shows
statistical significance. This suggests that compared with local urban hukou holders, rural
migrants not only have smaller living space, but also suffer from lower housing quality.
Despite the generally low housing quality in urban villages, local urban hukou still makes a
significant difference. With private rental housing set as a reference, all types of housing
tenure are significantly related to better housing quality. Again, among all predictors in the
regression model, self-built housing has the highest standard co-efficient. This suggests
that rural migrants in self-built housing not only have more floor area, but also better
housing quality. The same reasons as already proposed for superior space in this tenure
category probably apply here.
In the final category, household head’s marital status and household size are negatively
related to housing quality. This suggests that although married migrant couples living
686 S. He et al.
together tend to have lower average floor area than migrants living alone, they enjoy better
housing quality, i.e. they are more willing to and/or capable of improving their housing
quality. It is easy to understand that large household size tends to lead to lower housing
quality. The location of the urban village also shows statistical significance in this model.
Inner-city urban villages tend to have better housing quality. This is mainly because urban
villages in the inner city are more developed and have had a longer time to accrue internal
improvements and facilities. With Kuming set as a reference, Xi’an and Nanjing are
negatively associated with housing quality index, while Guangzhou and Wuhan
are positively associated. This suggests that compared with Kunming, rural migrants in
Xi’an and Nanjing suffer from lower housing quality, while rural migrants in Guangzhou
and Wuhan enjoy better housing quality. This complies with the findings here during the
fieldwork: urban villages in Guangzhou and Wuhan are generally newer and more
developed, while urban villages in Xi’an and Nanjing are generally more dilapidated and
less developed.
The third regression model in Table 5 looks at predictors of housing expenditure ratio.
Neither household income nor household saving are significantly related to the ratio. This
suggests that for rural migrants renting in urban villages, the proportion of household
expenditure spent on rent does not increase with income or saving. This might be taken as
an indicator of the tight budget constraints that all rural migrants of these villages
experience. They have to make sure that any increase in housing expenditure does not
compromise the ability to raise the consumption of other necessities and provision for
future expenses.
In the category of household head’s human and social capital, business licence is the
only indicator significantly related to housing expenditure ratio. For the same reason stated
in the floor area regression model, people running a small business in an urban village
normally require more housing space, which thus involves higher housing expenditure.
This also explains why the self-employed category of occupation of household head shows
statistical significance.
In the category of property rights and social entitlements, non-local urban hukou is
significantly related to lower housing expenditure ratio. This confirms the findings in
Table 3, which indicate rural migrants having the highest housing expenditure ratio. This
also suggests that non-local urban hukou holders generally lead a better life than rural
migrants. Since the former expend a smaller proportion of their monthly expenditure on
housing than the latter, they are, therefore, able to spend the money to improve their life
quality. Compared with private rental housing, except for commodity housing, all other
forms of housing tenure are negatively associated with housing expenditure ratio. Once
again, self-help housing has the highest absolute value of standardized coefficient among
all predictors, which means it has the strongest effect in reducing housing expenditure
ratio. Village location is also significant. Rural migrants in villages nearer the urban
periphery have lower housing expenditure ratios than those in villages nearer the inner
city, since housing rents in the centre are much higher than those in the periphery. Finally,
the housing expenditure ratio for rural migrant renters also varies in different cities. Xi’an
and Wuhan tend to have lower housing expenditure ratio than Kunming, while the ratio in
Guangzhou is significantly higher. To some extent, this result is related to different
rental prices in different cities: rental prices in Guangzhou’s urban villages are much
higher than those in Kuming, while rental prices in Xi’an and Wuhan’s urban villages are
comparatively lower.
Social Groups and Housing Differentiation in China’s Urban Villages 687
Overall, indicators of property rights and social entitlements overwhelm indicators of
capital and skills in predicting housing conditions in urban villages, i.e. there are more
variables in the former category showing statistical significance than those in the latter
category. A broad set of institutional factors beyond market dynamics still has a strong
effect in deciding housing conditions. For example, hukou still has a very strong impact on
the process of housing differentiation. Non-local rural hukou continues to be a huge
constraint for migrants climbing up the housing ladder in the city, while local rural hukou
holders, i.e. indigenous villagers, and other urban hukou holders are relatively better off.
Compared with private rental housing, most other types of housing tenure are related to
more floor area, better housing quality and lower housing expenditure ratio. Self-built
housing stands out as the predictor with the strongest association for better housing
conditions. This finding clearly shows that access to housing land and the rights to capitalize
housing land is a particularly significant predictor for housing status in urban villages.
The adjusted R square values in the three regression models are quite small. This can partly
be because the complexity of housing conditions in urban villages makes it particularly
difficult to develop a well-specified model. Although regularity has been found in urban
village housing markets, these are very disorderly, immature and impure markets, and as
has been said, are heavily shaped by non-market institutional factors. This means that there
is much unexplained variance in the models.
Conclusion
An institutional analysis of the formation and social stratification of China’s urban villages
shows how the incomplete and capricious institutions under market transition give birth to
the unusual landscape in these unique urban spaces, in physical terms and socio-economic
terms. Specifically, property rights redistribution resulting from the dual land system and
the urban-centred wealth accumulation regime; the absence of housing provision for the
large number of rural migrants; and the regulatory vacuum and temporary tolerance by the
city government, all contribute to the emergence of urban villages. Although often seen as
the quintessential poor neighbourhoods of Chinese cities, urban villages do not have a
homogenous social composition. With different social groups possessing different
quantities and qualities of endowments and resources, a stratified social structure has
emerged in parallel with the villages themselves. Socio-economic stratification is
manifested in various ways, but is seen particularly in the housing differentiation among
the different social groups that have been discussed.
Evidence from 11 urban villages in six Chinese cities shows a great deal of socio-
economic and housing heterogeneity, more so, in fact, than in other types of urban
neighbourhood in Chinese cities. Huge urban redevelopment projects and the emerging
housing market have changed those highly-mixed inner-city neighbourhoods into
gentrified housing estates accommodating relatively homogenous middle to high-income
residents (He, 2007; Li & Wu, 2006). The result is an increasingly stratified socio-spatial
structure in the metropolitan area and an increasingly homogeneous residential
composition within a certain type of neighbourhood, i.e. urban residents are sorting and
regrouped according to their socio-economic status towards differentiated neighbour-
hoods. As a unique urban landscape in the Chinese city, urban villages are yet to be
affected by the waves of urban redevelopment, and the diverse residential composition
688 S. He et al.
temporarily remains. Nevertheless, the dynamics of housing differentiation in urban
villages shares some similarities with that of the city as a whole.
As some scholars’ works have shown, there is a persistent effect of institutional settings
inherited from the socialist period deciding the housing situation in urban China
(Huang, 2003; Li & Siu, 2001; Logan et al., 1999). For example, Logan et al. (1999)
showed the continued importance of remaining institutions and associated political power
in the pre-reform period to produce/reinforce housing inequality. Li & Siu (2001) pointed
out that institutional factors, e.g. danwei and the municipal housing authority, rather than
the market per se remain as the primary driving force for housing mobility in urban China.
Huang (2003) argued that the hukou system continues to influence housing consumption in
post-reform China, i.e. households with rural or temporary hukou are at a disadvantage in
the housing market.
In this study, together with income, institutional factors, especially the institutions
defining property rights and social entitlements, are decisive for housing conditions.
In comparison, the differentiating influence of some market factors (such as the labour
market factor of educational attainment), and other market-delivered endowments such as
occupation and household head’s business licence, do show an expected correlation with
housing status. Overall, non-market institutions (endowments coming from legacy
socialist institutions) have a stronger role than market factors in determining housing
differentiation. This reflects unusual dynamics of social and housing differentiation in the
Chinese city. In particular, landless farmers make use of the ambiguous property rights to
make sufficient margins to become a rentier class. Many urban hukou holders in the
villages have a relatively secure housing tenure and better social entitlements compared
with rural migrants, although they do not possess the use rights to the housing land and
thus are not able to capitalize the rights into rental capacity. As the least advantageous
group in the urban village, many rural migrants suffer from housing poverty and inequality
by paying the highest housing costs while bearing the worst housing conditions.
Social and housing differentiation in urban villages has strong non-market institutional
roots, including institutions that remove land rights from farmers in the peri-urban areas to
expand urban territory; institutional discrimination against rural migrants who face higher
housing costs compared to their urban counterparts; and temporary tolerance to the highly
dense and low quality development in urban villages. The temporary tolerance has allowed
the newly privileged rentier class to gain windfall profits from the distorted housing rental
market. This above anything else has created a stratified social structure and housing class
differentiation in urban villages.
The future of urban villages is uncertain. Their threatened redevelopment (common in
the policies of many cities) endangers housing tenure security for indigenous villagers,
rural migrants and urban hukou holders alike. It also threatens the livelihood of the
indigenous villagers and, ironically, threatens the economies of the city as a whole, which
relies on the low cost labour of the villages’ residents. The threat is rooted in the
ambiguous property rights and ambiguous status of the informal sector that thrives in
urban villages.
In various ways, the population of urban villages is highly mobile. Indigenous villagers
move out of their village by purchasing commodity housing elsewhere; migrants come and
go. Within, there is also mobility as has been shown here—tenants moving to improve
their position and grades of housing emerging and a market to allocate by rental price.
Even after the dissolution of urban villages, as is probably inevitable for many, the housing
Social Groups and Housing Differentiation in China’s Urban Villages 689
differentiation that has been seeded within them, through the mixed influence of legacy
socialist institutions and new market institutions, will continue as their former residents
move elsewhere with the assets and more general housing market power that they have
accrued while they were urban villagers. The housing stratification that is developing in
urban villages forms an important part of the longer-term urban restructuring process in
the Chinese city.
Acknowledgements
We would like to thank the anonymous reviewers for their useful and constructive comments. This research is
supported by two grants awarded by the National Natural Science Foundation of China (Ref: 40801061 and
50808082), one grant awarded by the Economic and Social Research Council (ESRC) (RES-167-25-0005, UK),
and one grant awarded by the German Research Foundation (DFG) (SPP 1233, ref. no. BR 3546/1-2). The usual
disclaimers apply.
Note
1 Source: The New York Times online news: China enacts major land-use reform. Available at http://
www.nytimes.com/2008/10/20/world/asia/20 china.html?_r¼1 (Accessed 10 October 2009).
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