Legal Limbo Unsettles Urban Dwellers
The Age
Saturday January 12, 2008
THE path to China's suburban dream is littered with the usual grievances. The bus to town is too crowded, the toll road too expensive, developers too dishonest.
But the young families driven by Beijing's sizzling property prices to buy at Grand Jade Garden, on the city's eastern fringe, have met to discuss a more fundamental problem: none have legal title to the homes they thought they owned. "They couldn't bulldoze this place because there are so many of us," says young mother Shi Conglai. But her confidence is laced with doubt. "Where would we all go?" "There is nothing good about living here," says a Beijing professional, Tian Xue, who moved her family here because she could not afford to live in the inner city. "I am very unsatisfied." The rural land on which their houses sit was never authorised for urban development. Their apartments are badly built, promised amenities are unfinished, and they exist in a kind of legal purgatory. Not sufficiently legitimate to support a mortgage but, so far, not so illegal that they must be pulled down. Chinese academics say that between 20 and 30% of all new homes in large cities such as Beijing, Hangzhou and Chongqing occupy a similarly hazy legal space. The issue has become one of the most pressing socio-economic problems in China. "Minor property", as it is known, is now so widespread, and its challenges so hotly debated and intractable, that some local commentators argue that nothing less than a second land revolution can sort it out. Millions of minor property owners had presumed their tenure would evolve into full legal title. Such recognition would give people priced out of most urban housing markets access to cheap housing. But optimistic home owners underestimated the tangle that is China's land property system and the vested interests that depend on the status quo. The massively expanding informal land market excludes local officials from the rent-seeking game, and the powerful developers they work with. One developer, Ren Zhiqiang, says minor property is stealing because it bypasses planning rules and land duties and it all should be torn down. Last June, the Ministry of Construction warned that minor property occupiers would have no legal protection if local governments decided to act. Within months apartment compounds were bulldozed in Shandong, Jinan and other provinces. The resulting uproar took authorities by surprise. Local journalists were ordered to drop the story. Today the debate remains so sensitive that the Chinese name for the Grand Jade compound, Taiyu Yuan, and dozens of others, have been erased from the blogosphere. "This uncertainty is politically very dangerous," said David Kelly, a Sinologist who has been following the debate at the National University of Singapore's East Asia Institute. "A lot of people argue it's simply a matter of social justice to allow minor property to develop."Villagers at places such as Grand Jade Gardens took it on themselves to complete the rural land reforms that were started by peasants and endorsed by Deng Xiaoping nearly 30 years ago. Those reforms restored market incentives by allowing peasants to "contract" individual plots of land, resulting in an unparalleled period of poverty alleviation. But rural land remained collectively owned, so local bureaucrats retain the legal right to appropriate, rezone and develop it however they see fit. Today, peasants are brazenly bypassing bureaucrats and keeping the development profits that local officials would otherwise reserve for themselves. Their cause has received strong backing from policy experts. At the Grand Jade Gardens sales office, peasant-cum-property mogul Li Shiqi explains how his Zhangjiawan village management committee got around China's constitutional prohibition against peasants selling their land. Their village "renewal" project created new apartments for the 2000 residents - and a gated compound with pseudo-Roman facades and 207 multistorey villas and apartments. Mr Li's fellow villagers seem to think they got a good deal. Wang, a retired army officer, traded his share in the collective village land for a new apartment with subsidised hot running water and a monthly pension of nearly 400 yuan ($61). Villagers also get a "grain-growing compensation payment" and many have jobs running the new compound, where once they pedalled bicycle rickshaws. Wang says the village has finally overcome the ubiquitous rural Chinese problem of "too many people, too little land". China's leaders stopped the bulldozers after witnessing the hostile public reaction. But last month they proclaimed that minor property could not be bought or sold. It's now a stand-off, with the Government unable to deprive minor property owners of their homes, yet unwilling to legitimise their ownership.China's much-vaunted property law, which came into force in October, also fails to help. Back at the sales office, Mr Li argues that his buyers are safe to sell or lease their homes. He believes that big minor property developments will survive coming battles. "Nobody has told us that this is illegal," he says. "And this development is too big to bulldoze."
© 2008 The Age