The recent trend to develop rural land in western China has resulted in the large-scale relocation of villagers. It has also given rise to self-help development of housing. By examining long-established research on both formal urban development and informal village settlements, this study examines self-built housing, collective-endorsed housing and urban relocation housing in one western Chinese village. Their coexistence was made possible by ambiguities in property rights. The state–collective divide and the urban–rural dichotomy in property rights were restructured in land development, and villagers were able to use various means to take advantage of transitional, favourable deals to gain short- or long-term returns. Specifically, self-developed housing met market demands and traditional lifestyles, but witnessed a gap between de jure and de facto property rights and could not be easily formalised, whereas officially sanctioned relocation provided long-term homeownership but with ambiguous de jure property rights and failed to fully integrate villagers into urban neighbourhoods. To a lesser extent, collective endorsement added to the legitimacy of self-help development.