Abstract: "Shifting village to residential area" has become the path to achieve common prosperity in urban and rural fringe areas, and common prosperity is the fundamental goal of "shifting village to residential area". This study takes the Shigezhuang Street in Beijing, which is in the late stage of the "shifting village to residential area" policy, as the research object. Based on the theory of institutional change, a theoretical analysis framework is established. Through field research, data and information are obtained, the practical needs, model formation, and phased results of the "shifting village to residential area" policy are analyzed, and countermeasures and suggestions are proposed. The research indicates that Shigezhuang's "shifting village to residential area" is necessary for three reasons: exploring a "new rich path" to replace the "tile economy", eliminating the income gaps between villagers and between villages, and supporting the common prosperity of the region where the villages are located. "Shifting village to residential area" adopts the model of "mandatory institutional change + induced institutional change", in which the demolition of "old villages" followed existing policies and carried out institutional innovation in such aspects as the new collective economic development model, making the government and villagers collaborate and form a joint force. "Shifting village to residential area" has achieved phased results, such as, building governance guarantees for common prosperity, consolidating the economic base, and establishing a distribution mechanism to reduce the income gap between villages. The study puts forward recommendations as such: to improve the modern property rights system, establish supervision and incentive mechanisms, and innovate the development format of the collective economy, for an efficient development of the collective industry. When referring to the model of "shifting village to residential area" at Shigezhuang for reference, attention should be paid to the mechanism in the exploration and formation of the model.