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This study finds that the land-deprived households who have migrated from rural to urban areas (the land-deprived urban households) in all regions of China are not well integrated into urban society, which is reflected by their lower quality of living and inferior social welfare compared to normal urban households. However, we find an anomaly that land-deprived urban households, compared to the normal urban households, have lower quality of living and lower participation rate in urban social security, but have similar level of self-evaluated happiness. This anomaly can be explained by the fact that the land-deprived urban households self-select into inferior communities with neighbors of similar living and social conditions, and their happiness and social utility depend more on their status relative to their neighbors than on their status relative to the whole urban society. In addition, this study finds that land acquisition raises the quality of living and social welfare of the land-deprived households, migrating into urban areas does not improve their quality of living or social welfare, but better education and younger age facilitate their integration into urban society.