They stand as eyesores to most passers-by and potential public health risks to authorities, decaying buildings wrapped in tangles of exposed wire, studded with protruding leaky plastic pipes, vegetation billowing from cracks and terraces where particulates from polluted air have accumulated over time.
With skyscrapers and ultramodern developments on every side, some of these “nail houses” are also sitting on land worth millions of dollars in Shenzhen’s inferno of a property market, where new-unit and second-hand home prices rival London.
In battles over land and development, the nail house phenomenon has become widespread throughout China over the past two decades, with owners of the structures refusing to move to make way for new construction projects until they receive what they believe is their rightful compensation.
Sandwiched between two 20-plus-story residential complexes in the heart of Shenzhen’s Louhu District sits one such building that has fallen into disrepair.
The three-story building now essentially has no development value after its owner held out too long. Its most likely fate is to become a parking lot.
“The owner is still asking for about 100 million yuan [US$14.35 million], but now it is nearly worthless. He cannot sell it,” a middle-aged woman who rents in the building said, declining to provide her name.
The megacity of about 18 million people is hoping that a new proposal will rid the city of nail houses for good, and bring to an end land disputes that can sometimes drag on for a decade.
The plan would greenlight projects if 95 percent of the owners agree to relocate. The previous policy required all owners to approve, often leading to a handful of holdouts hoping to secure higher compensation.
The draft policy also sets minimum standards for the payout, which translates into either a home or homes of equivalent size and value elsewhere in Shenzhen, or cash payments based on space and property values.
Qiao Shitong (喬仕彤), an assistant law professor at the University of Hong Kong who has studied the city’s small property system extensively, said that Shenzhen has tried to move forward similar policies in the past, but had too much pushback from property owners and village committees.
“But this one might be successful,” Qiao said by telephone. “People appear to think it is more reasonable to do it this way now.”
“Before it was a conflict between developers and nail house owners, and now under this policy it would be a conflict between you and your neighbor,” he said. “It is becoming more common to use peer pressure to solve these issues.”
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