Abstract: Guided by the concept of 'people-centered' in the new era, the protection and construction of traditional villages places greater emphasis on the value of people's livelihood and focuses more on the impact of the 'human' element in practice, putting forward new requirements for governance practices. By introducing the Institutional Analysis and Development (IAD) framework, this paper deeply analyzes the action patterns and interaction mechanisms of multiple stakeholders in the governance process of traditional villages housing construction, and proposes strategies for governance optimization. Taking Mentougou District in Beijing as an example, this paper combs through exogenous variables such as the village serving as a mosaic of residential units, a community within the local social network, and adhering to actual operational rules. It analyzes the action patterns of key actors in the governance of traditional villages housing construction, including local governments, village self-governance organizations, and villagers. In response to governance pain points such as difficulty in securing resources, coordinating management, motivating stakeholders, operating communities, and guiding decision-making, specific measures are proposed to improve the overall coordination mechanism of local governments, optimize village community operations, and adjust the costs and benefits for villagers. This paper explores strategies for governance optimization, providing references for rural governance and the construction of traditional villages housing in China's new era.