A massive redevelopment project that would tear down old tenement blocks next door to Shenzhen’s science park may spawn more than 1,800 millionaires with net worth of 100 million yuan (US$14 million), as owners will get exceedingly generous compensation from the city’s government for old homes set to be demolished.
Chinese news portal Sina reported earlier this week that a resident living in Baishizhou (白石洲 or ‘White stone’), one of Shenzhen’s largest shantytowns or urban villages, just a stone’s throw from Shenzhen Bay and the city’s new CBD, got the equivalent of 15 140-square-meter condos in compensation for his 1,200 sqm townhouse, which would be expropriated for the redevelopment. It said the total value of the 15 new apartments he got would be close to 200 million yuan.
There are a total of 1,878 indigenous households in Baishizhou and members of these families may become millionaires overnight when wrecking balls start to knock down buildings there and the government doles out large sums.
Shenzhen has a masterplan for phased redevelopment of Baishizhou to quench the tech boomtown’s thirst for land, with 459,000 sqm of dilapidated, low-density buildings to be bulldozed to make room for high-rises to provide a staggering total of nearly 3.6 million sqm of offices and flats to house tech start-ups and their employees.
The government’s standard compensation is that for every one square meter of space affected, an owner can get 1.35 sqm of space at a new home, or cash equivalent.
An owner can then sell his or her new homes at a fat mark-up. To put that in perspective, the average unit price near Baishizhou is around 75,000 yuan, but condos in the neighboring upmarket Overseas Chinese Town fetch up to 150,000 yuan, according to lianjia.com, a popular real-estate brokerage website.
But while Baishizhou’s indigenous people will get on the gravy train, many tenants and shopowners are migrant workers that hail from the central and western provinces. And they are being forced to relocate with far less compensation.
To Shenzhen cadres, the sea of rundown blocks and makeshift tin houses in Baishizhou flanked by modern skyscrapers must be wiped out to produce new land and lift the city’s image.
Located in the city center, the 0.6-square-kilometer of land in Baishizhou has 2,527 buildings with more than 50,000 rental rooms. The local community has long been embedded in the high dense urban fabric of the city with homeowners stacking extra floors on to rent more rooms to graduates and job-starters, as well as to get more compensation when their land gets redeveloped.