Hold-up Problem in Urban Regeneration and Implication for Urban Planning: A Case Study from Pearl River Delta Region

It has been seven years since the initiation of redevelopment of the collectively-owned built-up land in Guangdong Province. Existing literature has found that competition for land rent appreciation among stakeholders is determinant for the smooth progress and outcomes of redevelopment. Weakness of planning control, excessively high land redevelopment intensity, and insufficient supply of commonweal facilities are prominent phenomena in reality. However, there is not much literature explaining the phenomena from the institution perspective and micro level. Besides, existing literature often highlights government’s rent seeking or coalition between governments and developers as the main causes. Roles of landholders in shaping the redevelopment outcomes are rarely explored. This paper examines the impacts of institutional transition, and changes in the power relationships and competition among stakeholders on redevelopment, combining the theories of new institutional economics and in-depth empirical investigation in a non-agricultural village. It has been found that redevelopment policy strengthens land rights of rural collectives, but profit-sharing among interests has not been clearly specified. In such an uncertain institutional circumstance, governments still invest in advance to keep villages’ existing collective incomes unchanged in the redevelopment process, thus the later can bargain with a good position and thus hold-up the former to maximize its own profits. In order to promote redevelopment, the government has to compromise in ensuring public profits, which reflects in its surrendering of much benefit to the villages, increase in Floor Area Ratio and insufficient supply in public facilities and open spaces. In order to advance inclusive development, coordination of government, and perfection in the institutions of profit-sharing and planning execution should be ensured. 关键词: 三旧改造;土地产权制度;非农化村庄;把持问题;可持续发展