Reflections on a Wandering Life.....

Wednesday, May 13, 2009

Nail Houses 

Fascinating article in the Global Times about the "nail houses" of China. These are the houses of families who refuse to sell out to developers, usually because they are holding out for a better offer. The original nail house of Chongqing, which brought the issue to national and international attention back in 2007, was isolated by developers, who excavated around the house, cutting off plumbing and electricity. The attention generated by this case (in spite of government gag orders to news outlets), ensured that the owners of this house were given a very good settlement. The Global Times article is particularly interesting, because it indicates that in many cases, the developers are actually the victims. I have a bit of a hard time accepting this, but there does seem to be some confusion about this issue, both on the part of the public, and on the part of (some) sincere government officials who are really trying to do what is right, and as a result, allow stubborn people to block development in cases where the government does have a legitimate right to employ eminent domain. So conscientious officials are going to elaborate lengths to make sure that expropriatations of property are done in a way that is not perceived as coercive, and corrupt officials in large numbers are taking advantage of powerless people to make money on their property. The post 1949 regime does not have a long history of private property. It goes back to the time of Deng Xiaoping, but in terms of real estate, it is actually more recent than that. Because of this, I think, there is perhaps some confusion about when it is or is not appropriate for governments to take property from private citizens even if those citizens do not want to give it up. This really needs to be clarified in today's China. If there is a public works project, such as a highway, that is planned to go through a residential area, then there should be hearings to give the public a chance to voice any concerns. But once the decision has been made, then owners of affected residential properties should be compensated according to fair market value. They should be given the high end, not the low end. Compensated in such a way that they clearly benefit from the project. Beyond that, though, they should not be allowed to hold up the project. If the project is a shopping mall, or some such private business, then it is up to the developers to negotiate with property owners. In such a case, property owners are not obligated to sell out. It is their choice. Obviously, this would mean that commercial projects would be more troublesome--that developers would not have eminent domain. Public works projects would have an unfair advantage. But that is the way it should be. With public works projects, individuals are not profiting at the expense of individual property owners. The beneficiary is the public. What must not be allowed is for private property to be taken by force from one individual, and given to another individual for their profit. This is injustice. But taking property for public use through eminent domain is not injustice. It is a necessary part of life in the city in any modern society.

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