Farewell to Shantytowns

　　Better living conditions are within reach for more low-income urban residents

　　Although aging， Huo Qingguo is very content with her life， which was dramatically changed by a shantytown renovation project launched by the Beijing Municipal Government.

　　Not long ago， Huo moved into a new apartment in Shimenying Residential Community in Mentougou District， Beijing‘s western suburb. Her new home is four times the size of the old bungalow in which Huo’s family had lived for more than two decades. In addition， the community has many public facilities close by， including a supermarket， a kindergarten and a primary school. Residents have also formed groups that meet regularly to engage in singing， dancing， fashion shows and other forms of entertainment and socializing.

　　“I don‘t want anything more than this. I just want to cherish life，” Huo said.

　　Mentougou was once one of the five largest hard coal production areas in China. The district had many coal and limestone mines ranging from small to large. Since 2004， the district government has shut down 270 coal mines and many other polluting enterprises such as cement production plants in the region.

　　After the mines were closed up， many dilapidated houses built in the 1950s and 60s still stood there， among which was Huo’s tiny bungalow of only 20 square meters. About 85，000 miners and farmers from 31，000 households were living in an area of waste from coal mining spanning 7 square km in Mentougou.

　　Due to land subsidence， the area was hazardous and not suitable for living. Pang Chengzhu， a retired coalminer， used to reside there. He said that walls in his room cracked because of slow sinking land there， which was caused by abandoned coalmines. Pang‘s family worried about their safety constantly.

　　The renovation project was started in Mentougou during 2009 and aimed to build apartment buildings with a total area of 2 million square meters within three years. Shantytown residents would be moved away from the wasteland around abandoned mines and into new residential quarters. By the end of 2012， 8，500 apartments had been given to relocated families.

　　Huo’s bungalow was torn down. As compensation， her family was offered an apartment of about 60 square meters and 90，000 yuan ($14，754). Huo chose to decline the cash compensation for an additional 20 square meters of living space.

　　Huge benefits

　　Shantytown renovation projects have boosted the confidence of low-income residents， and enabled them to live a more dignified life， said Qi Ji， Vice Minister of Housing and Urban-Rural Development.

　　Previously， shantytown resident conversations with one another were often about negative topics， such as leaks in the roof， but nowadays—after moving into new homes—they are so happy that they are inviting all their friends to visit， Qi added.

　　Shantytown renovation pertains to both people‘s livelihood and development， said Premier Li Keqiang during a tour of Beiliang shantytown area in Baotou City， north China’s Inner Mongolia Autonomous Region， in February.

　　Li said that shantytown renovation is able to significantly boost domestic demand while shrinking the income gap. Cities should not have high-rise apartment complexes on one side and shantytowns on the other. “If this disparity is not eliminated， the quality of urbanization will be compromised，” he added.

　　In addition， shantytown renovation can also have an environmental benefit. Premier Li said that the effort is effective in lowering coal consumption and in turn reduce pollution， as shantytown residents often burn coal for cooking and heating.

　　In recent years， shantytown renovation projects have fundamentally changed living conditions among tens of thousands of people from more than 12 million households all over the country. Li called on local governments to launch additional shantytown renovation projects.

　　At an executive meeting of the State Council， China‘s cabinet， on June 26， it was decided that more shantytowns on industrial， mining， forest and land reclamation sites across the country should be renovated within the next five years， and these plans are expected to benefit 10 million households.

　　In the next five years， Beijing is to invest 500 billion yuan ($81.49 billion) in renovating 527 shantytowns in downtown areas， according to the Beijing Municipal Committee of Housing and Urban-Rural Development. This is expected to benefit 700，000 residents in 230，000 households.

　　Renovation of about 90 of these shantytowns will start this year， said Ye Xiangzhong， an official with the Beijing Housing Guaranteeing Office.

　　Overcoming obstacles

　　Although shantytown renovation is a positive thing， the process is very complicated， Qi said. Renovation projects involve the relocation and compensation of shantytown residents. The process also tends to see disputes between real estate developers and local residents.

　　Some residents are reluctant to move because they do not want to be relocated to somewhere faraway or because they are not satisfied with the compensation. Some even demand additional benefits unrelated to housing.

　　Qi said that resident needs should be satisfied so long as they are reasonable. He also pledged that there will be continued efforts to keep the demolition process open and fair， and allow residents to learn about and participate in the entire process.

　　To prevent disputes， the Beijing Municipal Government stipulated that a renovation project will only be launched with the consent of at least 90 percent of involved residents.

　　Vice Mayor Chen Gang said that the city has produced uniform compensation standards and procedures. While the city will patiently explain policies and timely solve disputes， Chen said that for the small number of “nail households，” those that refuse to relocate and ask for exorbitantly high compensation， the authority will expropriate their housing according to law.

　　Chen said that the city will try its best to settle residents in or near their previous communities， while those residents who must be relocated to other areas to reduce population density will be placed in areas with convenient rail transit systems as well as good education and medical facilities.

　　Another key issue facing renovation projects is funding. At the State Council executive meeting on June 26， the Central Government decided to increase financial support for shantytown renovation projects in the next five years， and local governments are required to meet the new standards. Financial institutions were called upon to provide more loans to such projects. Similarly， the government has encouraged private investment in shantytown renovation projects. Eligible companies are allowed to issue corporate debentures or medium-term notes for such projects. Companies that invest in government-initiated shantytown renovation can have the investment deducted from their taxable income.

　　In the next five years， a total of 500 billion ($82 billion) will be invested in renovating shantytowns in Beijing—including government investment， bank loans and funds raised from other sources， according to the Beijing Housing Guarantee Office. It also said that these projects will produce land available for commercial property development， and proceeds from selling such land will be used to finance shanty renovation.

　　With land in Beijing’s center being such a scarce resource， it is getting more and more expensive. On September 4， a plot near Beijing‘s East Third Ring Road was sold for more than 73，000 yuan ($11，928) per square meter of the proposed construction during a land auction.

　　“The future property sale price is estimated at 150，000 yuan (24，510) per square meter，” Zhang Dawei， Director of Centaline Property’s research center， told Xinhua News Agency.

　　Shantytown renovation projects will eventually be financed primarily by land sales， said Beijing-based weekly business publication The Economic Observer， citing an anonymous investment and financing advisor of the Beijing Municipal Government.