*Article* **Alternative Governance Model for Historical Building Conservation in China: From Property Rights Perspective**

**Nan Guo , Edwin Hon Wan Chan \* and Esther Hiu Kwan Yung**

Department of Building and Real Estate, and Research Institute for Sustainable Urban Development, The Hong Kong Polytechnic University, Hong Kong 999077, China; nannan.guo@connect.polyu.hk (N.G.); esther.yung@polyu.edu.hk (E.H.K.Y.)

**\*** Correspondence: edwin.chan@polyu.edu.hk; Tel.: +852-2766-5800

**Abstract:** With the rapid advancement of urbanisation, the adaptive reuse of heritage plays a key role in achieving sustainable development, which is widely recognised by UNESCO and International Council on Monuments and Sites (ICOMOS). In the process of urban renewal, unclear property rights have seriously hindered the relocation of old houses, compensation and the adaptive reuse of historical buildings, even causing a series of social contradictions, such as violence. Moreover, forced evictions and controversy in dealing with the rights of residents, particularly the so-called 'nail households' have attracted public attention. However, few studies have analysed the problems and countermeasures from the perspective of unclear property rights. This study focuses on analysing the unclear property rights of historical buildings to propose an Alternative Governance Model for Historical Building Conservation in China. Founded on the Coase Theorem of externalities and property rights to examine the existing complex property ownership and rights patterns of 63 historical buildings in the famous Pingjiang Historic Block in Suzhou, China, the model provides reasonable and feasible reconstruction schemes for each situation. The operation model can also provide a symbiosis of new and old building solutions for urban renewal in developing countries, which may encounter a similar challenge of urbanisation.

**Keywords:** sustainable urban development; governance; urban renewal; historical buildings protection; property rights
