Disputes over compensation
Disputes over compensation
Disputes between developers and residents often arise over low rates of compensation and poor resettlement options. Once they learn that their home will be demolished, residents generally have little option to prevent it, and instead attempt to negotiate with the development company over the amount of compensation. According to the national demolition regulations, developers must pay evictees compensation equal to the full market value of their properties,29 with an added (although unspecified) amount of compensation for business loss in the case of non-residential properties.30 Reporters have noted that in some cases developers pay compensation to the local authorities instead of to evictees.31 Some residents have alleged that municipal demolition and eviction management departments have embezzled compensations funds: in one case, a banker alleged that the developer put 8 million yuan into a demolition and eviction compensation fund managed by the municipal department. According to this allegation, the management office unilaterally lowered the amount of compensation paid to residents, and kept the remaining 960,000 yuan (about U.S.$116,000) for the departments’ own use, later investing this money in a commercial real estate project.32
Regardless of the regulations, Chinese experts also report that the amount of compensation may in some instances be unilaterally decided by the developers or the demolition companies. It may be set far below market value, with little or no account taken for loss of income in the case of properties used for family businesses.33
Sometimes the promised compensation is only partly paid or not paid at all.34 Kong, the son of a Beijing couple who were forcibly evicted, reported to Human Rights Watch that developers had been approaching his parents about demolishing their home for a year, but had been unable to convince them to sign a compensation agreement. Then, suddenly,
the demolition and eviction management department came to say they had only two days to move before forced demolition. The government department did not approach them and offer an agreement…. [My parents] didn’t get anything [as compensation], and they had no help with resettlement.35
Chinese government-run media reports have also raised concerns that, as property values rise in downtown areas and evicted residents receive compensation below market value, evictees may be unable to afford property in the area where they had been living, and may be forced to resettle in the developing suburbs where employment is difficult to find.36
[29] “The sum of the compensation money will be determined based on the location, use, construction area and other factors, and by using the appraised real estate market price of the demolished home.” Chengshi fangwu chaiqian guanli tiaoli,art. 24.
[30] “In cases where demolition and eviction of non-residential property results in a cessation of production or business, the evictor should give suitable compensation.” “Regulations for the management of urban residential demolition and eviction,” art. 33.
[31] “Jidian pingxi: Ying jiaqiang zhengdi buchangde zhengci yanjiu [Analysis: Compensation by requisitioning locations should undergo stronger policy study],” Nongmin ribao [Peasants’ Daily], September 15, 2003.
[32] Wang Xiaoxia, “Chaiqian buchangkuan bei qintun nei mu [Demolition and eviction compensation funds embezzled behind the scenes],” China Economic Times, September 24, 2003.
[33] Wang Xiaoxia, “ Chaiqian cheng raomin gongcheng, Zhuanjia jianyi tigao buchang biaozhun ” [Chaiqian has become the harassment to people, Experts suggest raising the compensation standard], China Economic Times, November 12,2003.
[34] Song Zhenyuan, Zhou Guohong, Cui Lijin, “Chaiqian zhi tong, tong che minxin [The pain of demolition and eviction severely hurts the people],” New China News Agency, November 13, 2003.
[35] Human Rights Watch telephone interview with Kong [pseudonym], December 10, 2003.
[36] A typical evictee in Nanjing complained that she couldn’t find work in the desolate resettlement area and could not afford to travel into town to work (Song Zhenyuan et. al., “The pain of demolition and eviction severely hurts the people.”).
