Policy Options For Houses With Limited Property Rights

Recently, with the fast development of real estate market, there is a boom in houses with limited property rights, which aroused wide attention. Houses with limited property rights are those built on collective land in rural areas, with no property right certificate issued by national housing authority, and sold to people who are not members of the rural collective economic organizations. Here, rural collective land includes farmland, construction land and unused land. This paper focuses on those houses with limited property rights built on construction land, which are most complicated and controversial.The paper can be divided into six parts. Part one reviewed different views on the legitimacy and rationality of limited property rights houses, and concluded that:(1) the resolution of this problem relies on the improvement of institutions in the long term, and can't be realized in the short time; (2) the existence of limited property rights houses is reasonable, which shouldn't be banned unilaterally. Part two introduces the concepts of limited property rights houses and collective construction land, and indicates the importance of land confirmation according to Property Theory and the China's reality. Part three explains the reasons why limited property rights houses exist from the perspective of market, government and land institutions. Part four introduces the typical modes of rural construction land transfer in China and their implications. Based on part four, part five points out that dilemma of limited property rights houses are because of that the land property is not clear and the relative institutions of rural construction land transfer are missing. The paper gives concrete suggestions both in the long and short term. Part six is the conclusion and outlook for the whole paper.