A tract of land with ramshackle houses and rubble surrounded by high-rise buildings in a northern corner of Shanghai is prime property — and home to some of the most stubborn people in China.
It is located along the rapidly developing Suzhou creek corridor, convenient to the subway and shopping malls were floor space is priced at around $12,000 per square metre.
The Guangfuli neighbourhood is a property investor’s dream because a square metre of the undeveloped space could translate into hundreds of thousands of dollars in sales, depending on how high the developer builds.
On the ground, however, it is a developer’s nightmare.
The bitter tenants are dug in and are refusing to move, haggling over the sale price of their derelict property.
Official data showed Shanghai property prices rose 25 percent year-on-year, accelerating from a 20 percent rise in February.
And as prices rise, so do tensions as developers and the local government seek to make the residents move.
Resident Jiang Zhengxiang, 62, is far from happy with the compensation he has been offered.
“Just think of it, how much per square metre for (apartments) in Xinhu Pearl Town? You give me 26,000 yuan (4016 USD) (for one square metre), think of it, are you kidding? Who will agree? Discount? Who will agree to the discount? And how do you calculate the discount? You are kidding the common people. You are lying to people. How 26,000 yuan was decided we have no idea,” said Jiang.
Luo Baocheng, 61, another resident, said instead of offering a payout, the developer wanted to engineer a swap to a distant suburb, requiring the residents to cough up cash.
The property developer refused to pay the 4.2 million yuan ($646,750.85), Luo believes his house is now worth and instead wanted him to pay 1.18 million yuan for two apartments in Jiading district which would rehouse him and his brother’s family.
“We will not leave. I have been living here for more than 60 years. If you ask me to go, you have to take the three floors of my building into account, and give me three floors, that’s enough. If my three floors are taken into account, then I can buy six apartments. I can afford apartments after their (the property developer’s) demolition,” said Luo.
He also had a document issued in January which appeared to be from the Putuo district government warning of “enforcement action” if the residents did not leave. The Putuo district government did not answer questions about the issue when contacted by Reuters.
The developer did not respond to repeated phone calls requesting comment, but an employee at an affiliated company in the group who declined to give her name said the property had already been purchased from the Putuo government.
Chen Jie, executive director of the Institute of Real Estate Research at Shanghai University of Finance and Economics, says the cause of such stalemate is not always easy to identify.
“Some people involved might say the price is unreasonable and compensation is pretty low. However, let’s think of it carefully – when was the price decided? For instance, three to four years ago, the price given was reasonable, and the other people accepted it and moved. But if you think it (the price) is unreasonable, and keep hanging on till the end because you are quite certain that the price will rise rather than go down, and you get more compensation out of this kind of strategic behaviour, actually it is unfair to people who moved in the beginning,” said Chen.
The impasses often result in architectural absurdities, small houses standing in the midst of freeways, pedestrian malls, perched on concrete islands in the middle of pits excavated for underground parking lots. But eventually, the residents are forced to make way, one way or another, for development.
