Formalizing ambiguous property rights as a panacea? Informal urban regeneration in Shanghai

Abstract

Urban informality is predominantly viewed negatively in international development discourse, with ambiguous property rights frequently blamed for various problems associated with urban informality in urban studies. To address these issues caused by ambiguity and informality, developing countries seek to establish clearly defined property rights as a legal and formal institutions. However, China offers new insights for critically evaluating the perceived necessity of formalizing ambiguous property rights in urban settings. In China, informal urban regeneration, a new type of urban informality, is thriving on allocated industrial land. This approach maintains existing land ownership while repurposing industrial buildings for new uses. This study selects three types of informal industrial land regeneration in Shanghai, revealing the nature of ambiguous property rights concerning the de jure and de facto rights of use, income generation, and transfer of land use rights. It explores how ambiguous property rights function in the redevelopment process. The Shanghai story shows that ambiguous property rights serve as a key mechanism in the operation of informal urban regeneration. The findings emphasize that radically formalizing urban informality by redefining ambiguous property rights is not necessarily a panacea. Instead, informal urban regeneration under deliberate institutional ambiguity maintained by urban governments offers an alternative.