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Relocation today is better than yesterday

October 9, 2012

High Value Real Estate makes Relocated Households into Millionaires, those relocated some years ago now seek a second compensation payment

Source: Wangyi Caijing

As real estate prices climb ever upward, a certain number of people who have their homes demolished, dream of becoming suddenly rich.

At the beginning of this year, in Beijing Chaoyang District, in Laiguangying town, three natural villages were completely demolished and the residents relocated. A thousand or more residents became millionaires, even some worth tens of millions. Those nearby who were relocated in 2003 for much less money lost their mental balance,  and demanded a second compensation payment.

Zhang Shifu originally was from Laiguangying town(Chaoyang District, Beijing), Hongjunying village. In 2003 his home was demolished, and he relocated to a better residence. However, at that time every household received several 100,000 yuan in compensation. After buying a new residence there was not much left over. Then, at the beginning of this year, three nearby villages were razed, and the villagers bought new houses, cars, and every  one became a millionaire.

Zhang Shifu said these three villages were Baifen,  Beiyuan, and Xiaoliu, all located in Laiguangying town. On the eve of the Spring Festival these three villages were razed, Compensation was in accord with the rise in land prices and high real estate values in the area.  Zhang Shifu said, taking a one story house of 250 square meters as an example, compared to 2003, the compensation was 1,800,000 yuan more. Those residents were still able to buy replacement housing at a price of 4500 yuan per square meter, which they owned with “lesser property rights” (ownership recognized by the town government but not the state).

Of these thousand residents, the majority received 2 to 3 million yuan. Some more wealthy and influential families got as much as 10 million. Even the poorest had 1 million yuan left over after buying a new house and a car. A number of villagers confirmed to Wangyi Caijing news net that in Beiyuan village a certain household named Liu of 5 members, bought altogether three replacement residential units, and still had 5 million yuan left over. In Xiaoliu village one household, the Liangs, received 8 million yuan, and another household named Li received 10 million.

In 2003, the standard  value of commercial housing was 6000 yuan per square meter. in 2010, it had already reached 21,000 yuan per square meter. Beijing villagers, who had been sitting on their land and waiting for the highest offer, suddenly felt themselves to be “land kings.”  This was not the first “fairy tale” of becoming wealthy through demolition and relocation. At the beginning of 2010, in the big rush to redo old villages in Shenzhen, ten households received 100 million and 400 households received 10 million.

With such a big difference in the amounts of compensation, those who received relatively lower amounts on compensation in 2003 lost their mental balance, and like ” a crying child seeking the breast” they went to the relevant authorities to give them a second compensation.

On 3-24 at 4 in the afternoon, at the entrance to Chaolai Luse Jiayuan (Morning Comes Green Homeland) Residential Community [new housing development of multi-story buildings in a greenbelt], some ten or more illegal taxis are lined up. The drivers have an abundance of free time, and sit at a table by the side of the road playing cards.  These drivers are all residents of the Community. They are all former villagers relocated here in 2003 from Hongjunying and other villages in Laiguangying town. One 73 year old driver, Mr Yan said for his household of four people, each person received 135,0000 yuan. Adding up all of everyone’s compensation payments, it came to less than one million yuan. With this money they had to buy two apartments in a building in this development, where real estate is valued at 3000 yuan per square meter. After that, they had about 400,000 yuan left over. Now, he lives in one apartment, and his son’s household lives in the other. Since the move a grandson was born, and he worries where his grandson will live in the future.

Zhang Shifu, also relocated in 2003, told this reporter that at that time three villages consisting of 3000 households were relocated, more than 10,000 people altogether.  What is difficult to accept is that at the time his village accepted the government’s appeal to relocate, but those villages that were unwilling and resisted ended up getting more the longer they held out. In 2008, when Beihuqu village in this town was demolished, compensation policy had become much more liberal. Instead of being based on the number of people, it was now calculated by the total area of the residence. For every square meter the household received 6000 yuan, and bought replacement housing at 5950 yuan per square meter. A Mr Liu of Beihuqu village said, their village in 2006 was about to be demolished, but the villagers united and held out, but in  the end they could not prevail and the village was demolished in 2008.  But compared to the three villages relocated recently, they still took a big loss.

As for the demand of those relocated in the past, the town government could perhaps give some a cash payment,or perhaps  treat the petitioners as though they had been relocated recently, and allow them to purchase a residence for 4500 yuan per square meter [as “lesser property rights]. On some of these properties the market price is now 15,000 yuan per square meter.

A Laiguangying town official explained, the reason for the disparity in compensation amounts was because the demolition and relocation process in these two cases was of a different character. In 2003, the villagers were relocated as part of the creation of a greenbelt, whereas in the more recent case, the villages were affected as part of a policy to set aside land for development. Because the character was different, the policy determining compensation amounts was different.

When this analysis was told to Mr Yan, who relocated in 2003, he said, even though the area they were relocated out of is supposed to be a greenbelt, at present it is now actually covered over with one of the most high priced housing developments in Laiguangying town, the “40 degrees Latitude” project. The other large open space remaining there has already been earmarked for development.

The Laiguangying town government said that in regard to the requests for a second compensation, they will respond with a settlement plan in the near future.

A certain person in the real estate industry said, it is the dream of many Beijing residents to own their own home. But, amid the torrent of fanciful stories about becoming wealthy through relocation, peoples’ hopes only get bigger. Those without home ownership envy those who have it; those who have a home envy those more wealthy. As land prices steadily climb, those in the midst of the demolition and relocation process strive to become wealthy overnight –this is the dream of many people.

Reporter Ren  Guanjin

40 degrees latitude housing development

40 degree latitude rendering

朝阳区来广营乡 Chaoyang District, Laiguangying town

红军营村 Hongjunying village

白坟 Baifen

北苑 Beiyuan

小刘  Xiaoliu

北湖渠村 Beihuqu village

朝来绿色家园 Chaolai Luse Jiayuan

北纬40度 40 degrees Latitude


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