A residential community in Shanghai has resisted the government's and developer's demands that they leave for 16 years. In today's China, the issue of such "nail houses" has been unsolved for years.

A run-down area is surrounded by high-rises in Guangfuli, near the center of Shanghai. Photo: IC

While the high-class condos that loom over them are gleaming and modern, the homes of the long-time residents of Guangfuli in Shanghai are crumbling. Their community is only a wall apart from another world.

The surrounding condos cost an average of 78,000 yuan ($11,926) per square meter, and each apartment costs more than 10 million yuan, but the old-timers live in squalor.

Developers and the Shanghai government have been trying to move them for 16 years. But some of the people who have lived in this area for generations have been refusing to move as they don't feel they've been offered a fair compensation deal.

This kind of situation isn't unusual. In fact, it has happened so often that there is a name for the homes that remain after all their neighbors have left - "nail houses." Often residents are being asked to move because of new developments, be they commercial housing, airports or highways.

Even though there are many laws that apply to this situation, lack of legal knowledge or even out-and-out lawbreaking can cause stalemates, conflict, forced demolitions and sometimes even tragedies.

Nail house resistance 

One old resident lives in a three-story apartment building in Guangfuli with his brother and both their families. He inherited the house from his mother, but the group developing the area, Xinhuzhongbao company, refused to pay him 4.2 million yuan - how much he claims his house is worth on the market today.

Guangfuli residents told Tencent News the developer promised to give them new houses in the city's Jiading district, but they argue that this area is too far away from Guangfuli and moving would cost them a significant sum of money. Guangfuli is near Shanghai's city center, while Jiading district lies 30 kilometers to the north and is actually closer to Kunshan, a city in adjacent Jiangsu Province.

They argue that the relocation stipend given to them by the developer is not enough to cover their costs. Many of the residents here are blue-collar workers and cannot afford to pay much for housing.

Right now many of the area's old houses have been rented to migrant workers. There is nobody in charge of managing the community and it has become dilapidated. The houses are separated by narrow alleys, only wide enough for one person at a time. "Do not defecate here" is written on one alleyway's wall. The electric wires are like a tangled mess of jungle vines.

Residents grow vegetables in plastic boxes between shattered bricks and garbage. Many buildings don't have windows and the walls are discolored.

Their resistance has come at a time in which Shanghai's property prices are skyrocketing. By March, the city's average rent had increased by 25 percent compared to the beginning of the year, according to media reports.

Move or be demolished

Guangfuli is far from the only nail house community in China. In fact, the media have reported on dozens of nail house incidents. In most cases, such incidents end either in compromise or forced demolitions.

A famous case came to light in 2009, when a post circulated on the Internet, titled "the most powerful nail house in history." The post had one picture on it, a two-story house standing in the middle of the foundations for a skyscraper in Chongqing, in Southwest China. A 10-meter-deep hole had been dug around the house, making it look like a canoe drifting at sea.

When a Yangtze Evening News reporter visited the scene in March 2009, the occupants, Yang Wu and his wife Wu Ping flew the Chinese flag over the house and moved more furniture and living necessities inside the house, such as bottled water, food and a wok.

The area was in Jiulongpo district, Chongqing Municipality and the district people's court had demanded they move out by March 22, 2007. But the couple decided to defend their house.

"It's unlawful for the court to give that order," they told the Yangtze Evening News.

On the other side, the local land bureau claimed that the residents had no legal proof of their ownership or that the house was legally constructed and that it posed a danger to the neighborhood even before demolition started.

But eventually, in April, the couple gave up their fight and signed the developer's contract.

In other cases, stalemates have turned into violence and forced demolition.

A recent example took place in Zhengzhou, Central China's Henan Province. According to Caixin magazine, parts of Xuegang village near the city have been demolished and there have been several clashes between the authorities and residents unsatisfied with the compensation on offer. As a result, the village's power and water have been cut off for days. A villager said the compensation differed from village to village and Xuegang village received the lowest offer.

On May 10, a Xuegang resident named Fan Huapei decided he couldn't tolerate this any longer. He mistook the driver of a truck parked near his house for a demolition worker and killed him. He then went to a local government office and murdered its deputy director Chen Shan. On his way home he attacked two air conditioner recyclers, killing one of them. He was then fatally shot by police.

But afterwards, he was hailed as a hero in his village. Thousands of people came to his home to pay their respects and lay flowers. More than 100 people gave money to his family, with a total of over 25,000 yuan eventually donated.

Media have often reported on local governments and developers using violence to force people from their homes, from intimidating people with thugs to simply beginning to bulldoze their homes with them still inside.

Complicated issue 

In China, the Constitution and the Real Right Law dictate that no land is private and that the central government owns all land.

However, people that are registered rural residents are often given the right to use a piece of land for farming and housing. This land is not usually transferrable and can only be sold under certain circumstances. It must stay in one family.

Zhao Jian, a lawyer at Beijing Jingping law firm who specializes in demolition-related issues, told sina.com that residents who are getting their houses torn down should first find out who is on the other end.

If the demolition is part of a government program and it is being done in the public interest, such as building roads, then the demolition has some degree of executive force and usually cannot be resisted, so the residents should ask for appropriate compensation. If the demolition is a commercial act, then residents have a lot of say in this and can refuse.

But in China, city dwellers only have property rights, with control of land solely in the hand of the local government. Therefore, in practice, most demolitions are government-led.

There are two forms of acceptable compensation laid out in the law, either money or a new house. If the compensation is money, then the compensation must match the market price of the demolished property.

When the Beijing government was demolishing  hutong, a common complaint was that the compensation fee given to the residents wasn't enough for them to start over in the same area. Many had to move outside the fifth ring road in order to find shelter.

The compensation aspect is further complicated by the absence of documents in many cases. If the resident cannot provide ownership documents, then they cannot be compensated at the market rate. In the case of Guangfuli, some residents have inherited housing from their parents and have no official documents.

When a situation reaches a stalemate, the law dictates that if no contract is signed between the two parties or no agreement has been reached, the demolishing party can file the case with a court and the court can mandate a forced demolition. But if the demolished party files administrative litigation within the time limit, forced demolition can be avoided.

However, there are many parties that do things illegally. Lawyers suggest residents who are involved in such matters should learn the law and seek help if needed.

"It's okay to not sign a contract if you think the compensation is not reasonable, but if you don't seek legal help and only wait, the only result would be forced demolition," he told sina.com. "The legal-minded would go through legal process for forced demolition, but some choose a more violent way."

Agencies