Housing informality has emerged across developing and developed societies amid the global housing crisis. This article presents an intra-national comparative analysis of informal housing interventions in Hong Kong and Guangzhou, two major Chinese cities, to investigate the policies and discourses of urban housing informality and the factors shaping different governance regimes. A critical policy discourse analysis was conducted on official documents addressing subdivided units in Hong Kong and urban villages in Guangzhou between 2010 and 2023. The analysis focuses on policy goals, interventive measures and state-market-society relations, revealing that despite similarities between subdivided units and urban villages, government interventions differ significantly. The Hong Kong government has adopted a regulatory-welfare-mix model, whereas the Guangzhou government has pursued a developmental approach to address the phenomenon. This article contributes to policy studies by comparing informal housing intervention approaches and analysing the within-country divergence of normative goals and policy levers under different sociopolitical contexts.