Tianjin resident Zhang Xiulin recently received 70,000 yuan (about HK$65,156) in compensation for her dilapidated 161-square-foot house which will be demolished as part of a government housing reconstruction programme. Ms Zhang, 42, used the funds and her bank savings to buy a 538 sq ft flat, Xinhua news agency reported. 'We would still be living in the same old house our family has lived in for generations without the programme,' Ms Zhang said. Hundreds of thousands of residents in Tianjin, a northern port city with a population of more than nine million, for decades have lived in rundown single-storey houses lacking toilet facilities. The city government began a six-year programme in 1994 to alter dramatically the situation by demolishing dilapidated housing with a total floor space of more than 75.3 million sq ft and replacing it with new housing. Families living in dwellings scheduled for demolition receive what the government considers fair compensation so they are able to purchase new homes on the open market. Under the scheme, the city already has built apartment buildings with a floor space of about 138 million sq ft on 59.4 million sq ft of land formerly occupied by old structures. The programme had benefited 150,000 displaced families, accounting for about 60 per cent of new-home buyers in the city, Xinhua said. The city's per capita living space had jumped from about 106 sq ft in 1993 to 132.2 sq ft last year. Chen Zhifeng, an official with the city's construction committee, said the project not only would improve living conditions for low-income earners, but also would lead to a resurgence in the real estate market. Tianjin completed 19.37 million sq ft of housing in the first half of this year - a year-on-year increase of about 6.02 million sq ft. Housing sales for the period grew 70 per cent to 13.2 million sq ft. The city resembles a vast construction site, with cranes in every direction and noises associated with huge projects reverberating throughout the district. Residents inevitably complain about air and noise pollution caused by construction, but the surge in availability of housing and the quality of properties is seen as balancing the inconvenience. The city's preferential policies for housing developers have led to an accelerated influx of investment, with housing funds for the first half hitting 2.85 billion yuan, up 44.6 per cent on an annual basis. Hong Kong financing represents a key source of investment, with the total invested so far approaching US$3 billion. About 230 new real estate companies were established in the city in the first five months of this year, bringing the total number of related ventures to 1,355. There are about 340 intermediate organisations and 1,200 agents in the city's real estate sector. Authorities expect the real estate sector, which has contributed more than 20 per cent of the city's economic growth over the past four years, will provide yet another large economic boost this year.