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China Property

Has urban resettlement in China become more peaceful?

Better compensations in some resettlement projects in major Chinese cities amid sky high property prices have reduced head-on and violent confrontations

PUBLISHED : Tuesday, 30 May, 2017, 3:47pm
UPDATED : Tuesday, 30 May, 2017, 7:59pm

Are violent clashes that were once inevitable consequences of any resettlement exercise in China diminishing in the bigger cities?

Perhaps, argued some as compensations have become better. A case in point of the apparent shift in dynamics can be found in Wangtan(望壇), a massive ramshackle area outside the southern second ring road of Beijing.

Home to 5,700 families, or more than 20,000 underprivileged Beijing natives, it is the last major scar in the city’s Dongcheng district that needed to be demolished to give way to urban high rises, public parks and shopping centres.

Beijing city’s master plan for 2016-2035 has designated Dongcheng and Xicheng districts to be the “core areas” as political and international exchange centres.

Zhang Limei, a 55-year-old woman, is one of the 20,000 to be relocated. She and her parents are crammed into a 30 square metre shack where they cooked besides the bed and share bathroom and lavatory with residents in the alleyway.

Zhang has three compensation options: cash, a flat in a nearby building, or a larger flat in the new Tuanhe development area 20 kilometres south of downtown Beijing.

While no resident opted for cash, Zhang and her neighbours had balked between the choice of a unit nearby and one that is remotely located.

She eventually picked the remote location as her current Wangtan home would warrant her a three-bedroom flat – 114 sq m, and a one-bedroom unit – 60 sq m. If she chose a nearby home, she would only be entitled to a three-bedroom unit that would not be available till 2021.

“My parents are too old to move to the suburbs and to a high floor unit. They have lived on the ground floor for the past nearly 60 years,” Zhang said, outside her gated bungalow, against a wall plastered by a government banner touting the benefits of moving to the suburbs.

Zhang plans to rent a nearby ground floor apartment for her parents, and live in the suburban one-bedroom unit. She would lease or sell the larger one.

The compensation changes her fortune of being a retiree with a few thousand yuan to her name, to an asset owner with some 8 million yuan in assets.

She will move to the Tuanhe development by Capital Urbanization, a subsidiary of developer Beijing Capital Group.

Prices of nearby commercial properties have shot up to 50,000 yuan per sq m, dwarfing the 17,100 yuan per sq m for compensation homes.

Zhang was the rare few who chose to move to Tuanhe. Most of the inhabitants on the alleyway opted to relocate nearby.

Hao Yan, a mother of a three-year old toddler, was one.

The new 68 sq m unit that she will move into is still five times the size of her current 13.3 sq m home where she lives with her child, husband and parents. She wants her son to attend a school in the downtown area, which would save on her and her husband’s commute time.

For Capital Urbanization, the biggest task is to allay residents’ fears that the compensation homes are built in the middle of nowhere.

It has assured residents repeatedly that Tuanhe will be near an intersection station of two critical subway lines, though there is currently none. The Dongcheng district government has also promised to build several branches of the downtown schools and hospitals in Tuanhe, transforming the barren land into a prosperous community with ample amenities.

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Capital Urbanization was picked by the Beijing government to develop the 33-hectare Tuanhe site which it owned.

In 2015, the Beijing government gave its approval to the company and seven other Beijing SOEs to use the land they owned to build compensation homes. Although home prices are government-set and lower than commercial homes, it helped monetise the idle land that had not generated profits.

Liu Qianjin, general manager of Capital Urbanization’s Tuanhe resettlement housing project, said the project was the first to adhere to the quality standards of commercial homes, contrary to public perception that resettlement housing was of ill-designed and low quality.

The flats will have wooden floors and tiled bathrooms, on a decoration fee of 1,000 yuan per sq m.

When completed, 29 blocks will house 4,000 units, of which 3,214 will be reserved for Wangtan residents. The earliest homes could be available by the end of 2018.

The relatively smooth resettlement exercise for Wangtan residents may paint a brighter picture of China’s urban resettlement challenge, but it does not represent the broader norm.

Across the mainland, ugly confrontations continue to be waged between disgruntled residents and authorities and developers, as rapid urbanisation charges ahead.

Even when developers are able to resettle affected residents with minimal hitches, conflicts can be beyond the residents’ level.

The tight residential land supply in tier 1 cities such as Beijing is a sore point for private developers, and increasingly so as the authorities pledged to allocate more land for compensation and public rental housing sectors which they have no access to.

As mainland continues to tighten its grip on the housing market, developers shift focus to Hong Kong

Take Beijing’s residential land supply plan for the five years to 2021. The city government pledged to provide 6,000 hectares that could build 1.5 million homes. Out of which, 1,230 hectares will be allocated for compensation homes. Public rental housing will take 1,300 hectares of the total 6,000 hectares.

Beijing residential land supply cut by half this year

“To be inclusive, Beijing should open public housing, especially rental homes, to all people in the city,” said Zhang Gengtian, research director with a think tank, Urban China Initiative.

“This means the authorities should substantially boost residential land supply. Private developers should also get a foothold in the public housing sector, which would rack up competition and reduce cost.” he said.

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