When cities grow informally: New research sheds light on urban villages governance in China

When cities grow informally: New research sheds light on urban villages governance in China

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Written by:

Yihao Wu

First Published:

31 Jan 2025, 12:13 pm

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When cities grow informally: New research sheds light on urban villages governance in China

In the shadows of Shenzhen’s gleaming skyscrapers lies a different kind of urban landscape – one that challenges our traditional understanding of how cities grow and evolve. These are the “urban villages,” informal settlements that house millions of migrant workers who power China’s economic miracle. Now, new research from Harvard University reveals how these unique informal settlements operate outside urban economic models while playing a vital role in providing affordable housing in one of China’s most youthful cities.

The study introduces a novel framework for understanding these informal settlements, which have long puzzled urban planners and economists. Standard Alonso-Muth-Mills (AMM) models suggest that housing density and prices should decrease as you move away from city centres. However, urban villages break these rules, displaying what is call “anomaly hyper-density” – extremely dense populations despite relatively low housing prices. These urban villages challenge everything we thought we knew about the growth and dynamics of cities. They’re like cities within cities, operating by their own informal economic logic.

The research tracks the evolution of Shenzhen’s urban villages across four decades, revealing how they transformed from rural communities into vital informal settlements. Today, these villages provide homes for over 60% of Shenzhen’s migrant population, offering affordable alternatives in a city known for its sky-high real estate prices. Perhaps the most significant finding is how these villages create what economists call “price discrepancies.” While conventional urban theory suggests that prime locations command premium prices, urban villages maintain lower housing costs even in central areas. This phenomenon helps bridge the housing affordability gap but also makes these areas vulnerable to redevelopment pressures.

It bears to note that the driving factors behind the proliferation of the informality stemmed from the lack of sufficient affordable housing programs, inadequate public investments in promoting equity in labour market, and the realities of informal arrangements are profitable for many small businesses. “Simply demolishing these villages isn’t the answer,” the author suggests. “They serve a crucial function in providing affordable housing and supporting social mobility and cohesion. The challenge is finding ways to improve them while preserving their affordability and inclusiveness.”

The study introduces a pioneering “trade-off triangular matrix” – a new tool for city planners to evaluate these informal settlements based on three key factors: location value, accessibility, and environmental quality. It helps city managers make more informed decisions about urban village redevelopment, balancing economic interests with variant social needs.

We call for more sophisticated urban policies that recognise the value of these informal spaces while working to improve their conditions. Understanding and working with, rather than against, informal urban development may be key to creating more equitable urban futures. As cities continue to grow and evolve, the lessons learned from Shenzhen’s urban villages could help shape more inclusive approaches to urban development worldwide.


Read the full article on Urban Studies OnlineFirst here.