CLS International Newsletter

On 13 April 2009 the first batch of “Homeownership Scheme” apartments triggered a riot because of their serious quality problems. As many as 1,000 city residents laid siege to the Taoyuan Village police sub-station and clashed with riot police, leaving 10 people injured. The Taoyuan Village police substation confirmed the incident. More unrest among the 6,000 residents of the third-phase project of Taoyuan Village was expected.

Shenzhen City, immediately to the north of Hong Kong, has for the first time constructed 2,760 units of homes with a total floor area of 320,000 square metres under the third-phase project of Taoyuan Village, using Hong Kong’s “homeownership” policy as the model. The prices of the Shenzhen “Homeownership Scheme” apartments built for low-income residents were only about 38% of commercial housing prices in the surrounding area. About 6,000 people in 1,600 households started to move into the apartments in January 2009 but very quickly discovered that this batch of “Homeownership Scheme” apartments were a jerry-built project where the construction had not been carried out wholly as per the design. The shoddy work done and the inferior materials used resulted in water leakages at the toilets and at the feet of the walls in every apartment. What is more, the residents are worried that the buildings are structurally hazardous. Recently the Shenzhen City Government finally acknowledged major quality problems with the “Homeownership Scheme” apartments and said it would accept returns by the owners, or ‘change the basis of the occupancy from ownership to tenancy’. Nevertheless, a series of issues cropped up, such as the lack of compensation for home improvements carried out on returned homes at their own expense by many of the 1,600 households that had already moved in. Recently several government officials were injured when personnel from a working group of the Shenzhen City Government clashed with the owners.

The Taoyuan Village police substation took into custody two of the owners who had clashed with the government officials. As a result, on the evening of 13 April as many as 1,000 residents of the third-phase project of Taoyuan Village laid siege to the Taoyuan Village police substation. The owners clashed with riot police in the process of storming the police substation, demanding the release of the two people taken into custody. 10 city residents were injured. The residents did not disperse until after 11 o’clock at night. The Taoyuan Village police substation confirmed the incident and indicated that the people taken into custody were no longer being held at the substation.

It has been a matter of much conjecture as to whether or not “Homeownership Scheme” apartments modelled on those of Hong Kong could be expected to succeed in the mainland. The failure of the first batch of “Homeownership Scheme” apartments introduced may bring an end to the “homeownership” policy. Since the first batch of “Homeownership Scheme” apartments which went wrong involves up to 10,000 people, it is expected that more trouble will follow as a result of any failure to resolve the various issues.