Revisiting Institutional Credibility of Small Property Rights Housing in Shenzhen: for Dwelling Function or Exclusion Function?

The credibility thesis premises that an institution’s endogenous credibility and function, rather than its form, ensures its persistence. Small property rights housing (SPRH), an informal housing institution in China, was suggested to serve as a dwelling for low-income residents in previous research on institutional credibility. This research on two distinct SPRH cases in Shenzhen aims to re-examine the credibility thesis, moving the emphasis away from institutional functions toward the interaction between function and dysfunction, and their substitutability. It reveals that the informal housing institution’s credibility rationale has shifted in Shenzhen. Instead of serving a dwelling function, SPRH is becoming an investment tool for profit-making, contributing to the flourishing of informal housing in and exacerbates the exclusion of the disadvantaged groups from urban areas. SPRH’s institutional credibility is contingent upon not just the endogenous institutional function, but also on the interplay of the function and dysfunction of its institutional environment.