Informal land development has become a key issue in relation to land use planning in many countries. A new type of informal development, the informal gate community, has emerged and has become a new form of suburbanization in China's cities. Empirical studies about this new form remain scarce, as discussions on the slum-styled urban village still dominate the existing literature about informal development in China. The paper aims to explore the facts and factors in the new type of informal development. Looking at Beijing as a case study, analysis shows that informal gated communities have a high quality of life and good services, with public facilities and public transit. The existing institutional discrimination against migrants is a major reason why people choose informal housing, although the soaring price of formal housing is an important factor. The village-owned enterprise plays the role of business manager for the village's informal development. Its collaborations with government intuitions and state-owned enterprises blur its informal development activities and give buyers more confidence in buying informal housing. Conflicting responses to the informal development from state and local governments results in ambiguous and loose controls of informal development. As a result, local governments, villages, and residents have formed a strong informal development coalition. This coalition has created an invisible institutional barrier, making it more difficult for the state to prevent informal development. In addition, the ongoing political decentralization, economic liberalization, and market-oriented reforms seem to be bringing new challenges to the control of informal land development. For future policy, a more just and inclusive governance system is imperative for managing the suburbanization process in China's cities.