Basement blitz may evict a million people

PUBLISHED : Sunday, 02 January, 2011, 12:00am
UPDATED : Sunday, 02 January, 2011, 12:00am

Hundreds of business operators are petitioning Beijing's municipal government for compensation amid a citywide crackdown on basement rental services in the Chinese capital that could make a million migrant workers homeless.

In a rare show of desperation, some 500 basement leasing subcontractors protested on a street in front of the south gate of Chaoyang Park on Thursday afternoon, with many fearing the crackdown could cause losses totalling millions of yuan for small business operators.

The basements - usually one to three floors below the ground but attached to a residential building - were designed as wartime shelters and are under the administration of the municipal government agency in charge of civil defence facilities.

They have been put on the leasing market via developers or property management companies since the 90s to be refurbished as hotels or rented houses, mostly for low-income migrant workers. However, basement leasing subcontractors began to receive eviction orders last month. Witnesses said devastated subcontractors knelt down, seeking help, as about 100 police officers looked on, with a dozen police vehicles on standby. One witness said police beat up protesters while trying to disperse the crowd, even though the protest was largely peaceful.

Liu Kai , a basement leasing subcontractor from Chaoyang district, said the protesters gathered to figure out how many of them would be affected and how much their total losses would be in the hope that the government would heed their grievances. He said that at least 133 basement lease subcontractors had come forward and estimated their losses could reach 75.7 million yuan (HK$89.28 million) if the crackdown goes citywide.

Liu said that he had just invested 855,000 yuan in September, including subcontract fees, for a six-year contract until 2015 for a basement rental business in Chaoyang.

He said some operators had just opened their basement rental businesses after spending up to three million yuan, largely borrowed from families and relatives.

'But the message we're getting is that we can't sue the government [for losses] and we could get little or no compensation even if we could take the developers or property management companies to court, because it's an official order that will exempt them from any liability,' Liu said. 'But as recently as October we were ordered to go on a paid training session before we could renew our business licences.'

The crackdown came after a massive building fire in Shanghai that killed 58 people, prompting the authorities to launch a nationwide safety check. However, Liu said the government had never explained the basement rental crackdown.

At several premises, authorities have begun to cut off water and electricity supplies to basement tenants, stoking fears of a broader crackdown on Beijing's migrant population, which the municipal government believes is now unsustainable.

The Beijing News reported that the overall population in Beijing reached 19.7 million in July, including 7.6 million migrants. Liu said it was estimated that more than a million live in basements. The municipal government said in its 12th Five-year Plan for the next five years that it would tighten control of its overall population in three categories: the migrant population, permanent residents, who are not registered as Beijing residents, and Beijing residents.

Liu Jiwang , a basement leasing subcontractor from the Fengtai district, said that most of his tenants were restaurant waiters and waitresses and low-paid office workers that paid him 300 to 400 yuan a month. He said he subcontracted a basement of 60 rooms in March on a five-year contract, which cost him 500,000 yuan and he was devastated by the crackdown because he borrowed most of the cash from relatives. He said district police had ordered him to install an ID reader at the premises in September and as a prerequisite for a licence he also went on a two-day licensee training session in March that cost 360 yuan.

'I just can't comprehend what the changes are all about as we're legal one moment and subject to a crackdown a moment later,' said Liu, a Heilongjiang native who lives in a basement room himself. 'I don't know where I can go if I'm forced out of the basement.'

Basement prices

It is estimated that more than a million people live in Beijing basements

Subcontractors who lease basement space say their closure could cost them, in yuan, as much as: 75.7m yuan