The Marginalized Status of Dislocated Migrant Groups in Beijing

During the pre-reform period from the 1950s to 1979, private ownership had been mostly eliminated through expropriation or nationalization and public rental housing had become the key supplier of housing in cities, as part of a redistributive economy for the egalitarian allocation of state-owned resources. The central government played the role of an economic administrator and financial supporter of all urban housing, whereas municipalities and public institutions (including state-owned enterprises) were the main state agencies in charge of housing construction and distribution at the local level.¹

Prior underinvestment in the housing sector and backlog have resulted in the government having plenty of work to catch up with in terms of meeting demands after the reforms. From 1949 to 1980, the Beijing government’s investment on housing construction represented only 11.4 % of the total investment on fixed assets since financial resources were mostly allotted for industrial and military investments (Kuang 2003). In the ‘low-wage and high-subsidies’ system, housing consumption in urban household expenditure was less than 1 %, as nominal rent was set at a low level irrespective of tenants’ rank and wage (Cheng 2007). According to a housing survey in Beijing in 1985, housing maintenance and management cost 0.54 Yuan/m². per month, while the monthly rental of public housing cost only 0.124 Yuan/m² (Sohu 2007).

The limited investment and nominal rental charges were neither sufficient for reinvesting in new housing construction and maintenance, nor adequate to meet the housing needs of the rapidly increasing population in Beijing which rose from less than two million in 1949 to nearly nine million in 1980. The average floor space per capita was only 5 m². in Beijing before the reform. Both the sitting tenants and those waiting in queue suffered from small living spaces and poor housing quality. The housing reforms which followed the advent of the economic reform since 1980 were carried out with several objectives:

The privatization of state-owned housing and its conversion into a marketable asset have resulted in losses among some employees of state-owned enterprises in the mid-1990s. Homeownership in Beijing was confined to registered permanent residents, especially for families whose household heads were employed in public sectors. Table 6.1 shows urban households who were mainly public housing tenants before 1998. Since then, public housing commodification has increased in pace and resulted in a major increase in homeownership in Beijing, hence illustrating the success of Beijing’s housing privatization (see Table 6.1). Besides the privatized public housing for danwei employees, commercial housing built and sold in the open market has been the other major source of homeownership growth in Beijing: a leap from less than 5 % in 2004 to almost 40 % in the late 2000s.

In Beijing’s shift from state rental housing to homeownership, three stages of reform can be identified: the pilot experimental stage (1980s), the double track stage (1992–1997) and the full marketization stage (1998 onwards) (Li and Yi 2007). The ‘double track’, a discriminating policy for insiders and outsiders, is a distinctive pattern in China’s gradual and trial-and-error style of reform (Clapham 1995; Walder and Oi 1999; Chen 2004). In the ‘double track’ system, housing privatization and subsidies were mainly available for the regular employees in danwei as ‘insiders’, but inaccessible to those outside the public sector, who are considered as ‘outsiders’.

Table 6.2 shows the three segmented housing markets in China that are produced by the multi-level and double-track housing provision system. The migrants only have access to private housing markets. Affected by the drastic social reshuffling and years of inflation and the resulting housing bubble, the question of who has the right to obtain governmental housing assistance has become an issue of great contention. The allocation of housing assistance (e.g. selling Economic Housing at a subsidized price and allowing the houses to be tradable after a five year residence, the Housing Provident Fund and cash subsidies for commercial housing purchases) continues to present day and is often seen to be biased towards favoured interest groups (Tomba 2004; Huang and Jiang 2009; Wang 2003).

As early as 1991 in Beijing, the Regulations for the Implementation of Urban Housing Demolition stated that the owners and users of buildings were entitled to compensation, but individual users were restricted to the local hukou holders (Beijing Municipal Government 1991). As stated in the 2001 revised version of this stipulation, property owners and tenants in public and private buildings should be the recipients of compensation following home demolitions, if their tenure is legal and formal (Beijing Municipal Government 2001). By and large, there exists a restriction of compensation eligibility for local hukou holders and those in the legal rented market. The migrant tenants are the most disadvantaged in this process and hence, most negatively affected.

Low-income migrant workers are ineligible for housing aid, if they are tenants of illegal or non-tradable constructions. However, for the same reason, the local population confronting unwilling dislocation can mobilize their social resources, through appeals to higher courts and media exposure, as well as seek support from sympathetic leaders (O’Brien and Li 2005; Johnson 2004), whereas the migrant tenants have little means of expressing their voices.

For instance, as shown in Fig. 6.2, the residents and developers try to negotiate and reach an agreement on the compensation issues; if no agreement is reached, they would then refer to the governmental arbitration; if the residents decline to accept this arbitration decision, they can take the case to the people’s courts (see Beijing Municipal Government 2001; Shin 2008). This negotiation process occurs mainly among the local people and developers with few cases of migrant tenants’ appeals against demolition or for a fair compensation.

Between 1991 and 1999, the introduction and implementation of market-oriented redevelopment led to a massive off-site relocation from inner cities to suburban estates. Since 2000, more and more subsidized housing instead of commercial housing has been provided in the redevelopment schemes for resettlement purposes, in order to make it more affordable for dislocated residents to get re-housed. This resulted in a larger gap between local and non-local residents in terms of compensation eligibility, as subsidized housing schemes are an inaccessible welfare for migrants.

From as early as 1993, Beijing has planned to be ‘a modern global city’ in its city plan. Local practices have been undertaken to ‘curb the disorderly and over-growth of population’, and to attain the optimal population size, structure and density with an orderly mobility (Beijing’s 12th Five-Year Plan). As shown in Table 6.3, the new management paradigm in Beijing involves the following parts:

In the pre-reform era, urban public housing was distributed based on the occupational title and status of the head of the household, not according to income level, in the context of a low-salary and egalitarian society. This rationale of distribution was used when the government privatized public housing units, giving privileges to senior cadres. The low-ranking employees in state agencies were normally sold smaller property units with lesser rebates, and the waiting time for them was also longer than for senior staff. In Beijing, public sector employees were entitled to a discount of 0.5 % of the sale price, after one year and then after each year, up until 40 years of service, which meant they were entitled up to a maximum of a 20 % discount (Wang 2001). These preferential rights of manual workers differed from managers, technicians and professionals in the state-owned enterprises (Wang et al. 2005).

Manual workers had more difficulties in obtaining homeownership from the sales of public housing, when their danwei housing became the assets of private companies, following the property restructuring reforms. Factory workers’ living quarters, owned by state-owned enterprises, were mostly built in the 1950s (between the 2nd and 3rd Ring Road) and the 1980s (between the 3rd and 4th Ring Road; and for the Capital Iron & Steel Corporation, to the immediate west of the 5th Ring Road). The construction of housing for factory workers declined in the 1990s and ceased completely after 2000 (Wang et al. 2005). Workers’ quarters within the 4th Ring Road and suburban industrial estates (Shijingshan and Fengtai Districts) had then become badly run down, which is reflected by the poor quality low-rise housing in the area.

Economic reforms had led to bankruptcy, mergers and the relocation of many state enterprises, bringing hardship to workers’ livelihoods in the old industrial regions. Over 300 factories, including one heavily polluting iron and steel plant, Capital Iron & Steel Corporation, were affected, including 60,000 employees of the latter (Ness 2002; Yang 2005).

Low-ranking employees also lost out when the salary scale of state agencies was increased in order to strengthen the organization’s purchasing power, as pay rises favoured senior cadres. Housing inequality between the new and old employees in public sectors widened when public housing privatization ended soon after 1998. As shown in Table 6.4, in the 1990s, the ‘group buying’ by danwei of property for their employees was eligible for the following groups (see Kuang 2003: 127):

The scale of ‘group buying’ of commercial housing in the national capital of Beijing was obviously higher than that in Shanghai. Such buying began to relax after 2000; only resourceful danweis with self-owned land could continue to build new houses for their personnel, as a form of living allowance. The most noted landowners included:

By setting up ‘housing service centres’, the central government departments (or units) undertook measures in order to upgrade or rehabilitate old housing units and build new apartments within inner-city areas for sale to their employees. For example, Hepingli Neighbourhood (north 2nd Ring Road), Baiwanzhuang, Zhenwumiao and Xibianmen Neighbourhoods (west 2nd Ring Road) were new housing units built after 2000. Guangquan (east 2nd Ring Road) and Guangyuan Neighbourhoods (east 2nd Ring Road) were two other neighbourhoods both sold in 2006–2008 to state employees, at prices ranging from almost one tenth to half of that of the surrounding commercial housing of comparable standards (News.Dichan.Sina 2011). Moreover, employees of these resourceful danwei and monopolistic state-owned enterprises enjoyed the privilege of being able to apply for Economic Housing built by government agencies.

Employees from other ordinary danwei had to either wait for long periods for Economic Housing, or use their limited cash subsidies in order to buy property in the commercial market. The laid-off state workers were typically found in this kind of situation (see Wang et al. 2005). Other employees outside public sectors (e.g. contract and temporary workers, workers in informal economies, the unemployed, rural migrant workers) did not qualify for housing welfare benefits, unless they were original residents in the dilapidated public tenement areas, such as Beijing’s traditional courtyard housing. In all instances, access of public sector employees to subsidized public housing depended on the size and performance of the danwei after housing reforms had taken place² (Huang and Jiang 2009).

Table 6.5 compares the differentiated treatments for senior officials compared to lower-ranking employees, in state agencies during the housing reform period. These state employees were still sheltered by a series of subsidy policies and government assistance, including the Economic Housing schemes initiated in 1993, and municipal low-rental public housing projects introduced since 2001. When housing survey of Huilongguan Neighbourhood was conducted, it was found that Beijing’s famous universities and large state-owned enterprises purchased Economic Housing buildings for their staff, and then sold to them at a subsidized price, in addition to awarding them central-heating allowance.

Largely speaking, because of limited supply of property, more privileged officials and cadres were given top priority for housing ownership; low-ranking personnel received cash subsidies, but the amounts were too small to allow purchasing of commercial housing, the prices of which surged strongly after 2004. The non-hukou residents were not entitled to purchase privatized public housing or affordable housing. The governmental subsidized schemes were believed to be helpful to the native low- and middle-income groups, considering the unaffordability of property amidst the atmosphere of rampant speculations in the housing market. In the 2000s, housing price in Beijing rocketed from less than 5,000 Yuan/m². to 20,000 Yuan/m². But the inadequate supply and unequal allocation of housing units to lower-ranking groups have drawn much criticism. One aspect of this is the scale of resettlement which had created a substantial demand for affordable Economic Housing constructed far from their original homes in the city fringe. In Beijing’s largest Economic Housing projects in the Tiantongyuan and Huilongguan neighbourhoods, the middle- and higher-income residents enjoy the suburban green environment, being at a distance from the city centre, and overcome the distance by driving private cars to commute to work, while low-income groups would face problems of adaptation after leaving the traditional hutong areas that used to provide them with employment opportunities as well as support services. Relocated inner-city residents also require more attention and assistance.

With the advent of urban reforms aiming to raise Beijing as a ‘World City’,³ the city plan has designated the city centre to provide residents with better facilities or a larger living space. To do so, wholesale clearance and renewal of substandard residential areas were initiated in the 1990s in the old city or inner suburbs, where the old houses, built 30 years ago, were mostly located.

In some urban renewal projects, almost half of the development funds were used in order to provide new houses for affected local families, delaying the process of inner-city renewals, especially in overcrowded areas. As analysed by Meng (2000), compensation fees for home/land acquisition made up 49.3 % of total investments in inner-city upgrading projects, as against a much lower 16.0 % in the suburban areas. Since 1998, renewal programs proceeded in concert with housing reform, with the introduction of cash subsidies as the main compensation method to abate the resettlement costs and speed up renewals. Despite the higher cost of compensation, dispersing inner-city population to the suburbs was still preferred, as profits gained from the intensified redeveloped areas could well offset expenses (Ye and Gao 2003). For instance, in 2002, when Beijing began the noted renewal of the Nanchizi Area, close to the Forbidden City, 70 % of the 1,000 households were rehoused to Shaoyaoju at the north-western 4th Ring Road whilst the remaining 30 % were resettled in situ (Nan 2003). A survey on Beijing’s Economic Housing showed that the dislocated residents had spent 6 months to 3 years in temporary accommodation, by renting or staying in relative’s homes, before moving to their new apartments.

Table 6.6 depicts Beijing’s home demolition and resident dislocation during the past two decades. The areas and households affected by redevelopment projects during the 2000s were significantly larger than those from 1991 to 2000. The new policies of monetary compensation and resettlement, introduced since 1998, have had some negative impact on the low-income residents.

Firstly, the fast paced wholesale clearance had affected so many residents that the municipal government was unable to resettle all of them. The resettlement policies amended in 1998, 2000 and 2001 were disadvantageous to residents living in one-storey buildings and traditional hutong houses, since cash compensation covered only the building cost, disregarding housing traits or residents’ needs (see Table 3.​2