Shanty towns are no place to call home

PUBLISHED : Friday, 11 June, 2010, 12:00am
UPDATED : Friday, 11 June, 2010, 12:00am

For 30 years, Wang Chaoqiong, her brother, their two families and their mother have lived in a 30-square-metre shanty in Shibati, a slum in the heart of Chongqing. It is a dark and malodorous place with no windows or toilet. It is the lower half of one of about 7,000 two-storey brick shacks built in Shibati, in the city's Yuzhong district, more than 50 years ago.

'It's peaceful around here during the day, but once it gets dark thieves come out and they don't spare anyone,' Wang said. 'We are poor, but this doesn't stop thieves from forcing their way in and taking away loose change and even leftover food. We've already changed the padlock six times, but it's no use.'

In summer, the temperature can rise to 40 degrees Celsius. 'We can't stand the stink and heat so we stay outdoors until midnight and the house cools,' she said. 'Even the rats and cockroaches come out to take a breath of fresh air.'

Wang and her family are one of an estimated 10 million on the mainland that are deprived of decent housing.

Beijing has pledged to build up to three million housing units for the poor this year, but Wang, 46, has nearly given up hope of seeing an improvement in her family's living conditions any time soon.

For decades, the central government has encouraged rapid urbanisation. But as millions poured into mainland cities, subsidised housing construction did not keep up. Demand far outstripped supply, especially as builders, uninterested in the low profit margins of public housing, focused on the private market. Many migrants could not afford even the low-cost housing and, because of the restrictions of the hukou residence requirements, could not qualify for public housing. As a result, they, like the Wang family, were forced into shanty towns.

Most of Shibati's residents are migrant workers who ended up in the slums as their search for a better life in the city remained elusive.

'About 80 per cent of people who live here are tenants, a large portion of whom are from villages and mountainous areas in different provinces,' Wang said. 'Many of the original homeowners in Shibati have moved out in favour of better areas when they became richer.'

Shibati is a sore on the rapidly beautifying face of Chongqing. A short distance away is Liberation Street - the core business district - with its high-rises, curtain-wall office buildings, luxury hotels and glitzy shopping centres.

Still, Shibati has its charms. With its old architecture and dense neighbourhoods, it has become a tourist attraction, giving people a view of life as it was lived 40 or 50 years ago. The area is filled with small shops. Dumplings are sold in small eateries for as little as 50 fen (57 HK cents), a bowl of noodles goes for three yuan and a cup of tea in a traditional tea house is two yuan. A hair cut costs six yuan.

This year, the residents of Shibati face eviction as the local government launches a massive redevelopment to turn the slum into a mixed tourism and cultural attraction.

Wang, who works as a cleaner in a warehouse, and her husband earn less than 1,500 yuan a month. And she has started to worry about the prospect of losing what she has considered home in the past 30 years. A similar-sized unit outside Shibati would cost about 1,000 yuan a month.

'We can hardly afford it and we have no place to go as rentals keep rocketing up,' Wang said.

She said it would take 21 years to save the 30 per cent down payment for a standard 90-square-metre flat that cost nearly 630,000 yuan (7,000 yuan per square metre) if she just spent half her earnings every month.

Premier Wen Jiabao conceded in his government work report this year that housing was one of the biggest challenges facing the nation. He said the government would spend 63.2 billion yuan, up 14.8 per cent from 2009, to build low-rent and affordable housing this year to accommodate 3.75 million low-income urban families. He also said the government would renovate rundown areas in cities, on reclaimed land and near mines; experiment with renovating ramshackle houses in rural areas and build permanent housing for nomads in ethnic minority areas.

But analysts said the acute shortage of housing for the poor in urban areas is at a scale that is unlikely to be resolved in the foreseeable future, despite the combined efforts of the central and regional governments.

Liao Qun, a senior vice-president and chief economist at Citic Bank International, said about 14 million farmers flood to cities every year in search of jobs. But they are not eligible to apply for subsidised housing, which is only offered for sale to those registered in the local hukou residency system, or who hold a permanent resident's permit.

On June 1, the State Council proposed gradually implementing a system of residence permits nationwide, which would give migrants access to social benefits such as housing, education and health care in cities. Academics say the move was a prelude to the cancellation of the reviled hukou but it would take a long time.

And given the difficulties in finding decent-paying jobs in the cities, millions of villagers in urban centres are left with no choice but to seek out low-rent apartments in urban slums.

'This year, the central government aims to build close to three million units comprising affordable housing and units to be rented out at low rates,' Liao said. 'But even if four million units are built next year and five million in 2012, the total will hardly meet the enormous demand created by rapid urbanisation which the government has promoted.'

He attributed the acute shortage of affordable housing partly to the nation's tax system. Local governments must contribute a 75 per cent sales, consumption and value-added tax to the central government while provincial governments take the lion's share of the rest.

Still, Liao said: 'The latest housing pronouncements from central officials in Beijing will likely speed up the construction of new housing projects. Local officials who miss targets set by the central government may see their promotion prospects potentially adversely affected.'

Regional governments are to set aside 70 per cent of available land for affordable housing and will renovate shanty areas and build mass housing. But a lack of supervision often stymies progress and it is not unusual to see those who initially occupy the low-rent housing sub-lease it after they have accumulated enough wealth to buy better private-sector apartments.

In other cases, affordable housing - which is offered at about 30 per cent below private-sector homes - ends up belonging to wealthier people through fraud, a developer who was once involved in building affordable housing said, asking not to be named. His firm quit the market and now focuses on building private housing for its more attractive profit margins.

Developers' gradual departure from the construction of public housing prompted a sharp fall in supply - even when local governments offered tax incentives and low-interest loans to encourage them to participate in building for the poor.

David Ng, the head of regional property research at Royal Bank of Scotland, said the slow progress in building low-cost housing is also because of the low returns it brings builders. 'People move into low-rent housing but it will take them years, possibly five years, before they can afford to buy those homes out.'

That means it takes longer for local governments to gain from investing in low-rent housing, especially when they can generate millions of yuan in minutes from selling land to developers at auction, he said.

While Wang in Shibati sees her family at a crossroads, unsure whether the government will deliver on its promise of providing low-rent housing for the poor, a Yuzhong official reiterated that it was their duty to provide basic housing to the people.

Liu Qiang, secretary chief of Chongqing's Yuzhong District Committee, said it set out a three-year plan in 2008 to demolish 3.1 million square metres of dilapidated housing, of which 2.11 million square metres were shanty houses. The redevelopment will involve 50,000 families and about 175,000 people.

'We have resettled 32,000 households, or 112,000 people, who lived in dreadful conditions,' he said. 'Most of the houses were built in November 1969 and were deemed dangerous. The building structures were questionable and there were no toilets, no kitchens and no basic facilities.'

Wang was unimpressed. 'This ... will only make owners rich, but not tenants like us. We are just moving from one squatter area to another.'