Research on the Urban Village Renewal Mechanism Based on Rent Gap Theory: A Case Study in Xi’an, China

Jiaxi Xiao () and Fan Dong
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Jiaxi Xiao: School of Government, Beijing Normal University, Beijing 100875, China
Fan Dong: School of Government, Beijing Normal University, Beijing 100875, China

Land, 2025, vol. 14, issue 1, 1-21

Abstract: Urban renewal is a critical approach to address issues such as the scarcity of urban spatial resources and infrastructure aging in the later stages of urbanization. Urban village renewal is one of the typical practices of urban renewal. Based on China’s unique dual urban–rural land system and urbanization process, this study localizes the rent gap theory. It applies the modified rent gap theory to conduct a case study on Wangjiapeng Village in Xi’an using the process-tracing method. It explores the internal mechanisms of urban village renewal and the key factors influencing the progress of renewal projects. The findings reveal that the size of the rent gap directly determines the attractiveness and timing of urban village renewal. However, issues such as interest conflicts, administrative redundancy, and government supervision during the renewal process significantly increase transaction costs, raising the rent gap threshold and thereby affecting the progress and outcomes of the renewal. This paper proposes a rent gap theory that is more suited to China’s context and further expands its applicability through case study research. The practical experience of Wangjiapeng Village provides important policy implications for other major cities in China and cities currently in the late stages of urbanization.

Keywords: urban village renewal; rent gap theory; dual urban–rural land system; process-tracing method; China (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2025
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