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Research report on rural-urban migrants’ housing security and housing conditions

This Research Report on Rural-Urban Migrants’ Housing Security and Housing Conditions was completed by the New Urban Migrants’ Housing Security Research Team in the Hong Kong University Department of Sociology. The research team carried out field research in five cities (Shenzhen, Guangzhou, Shanghai, Wuhan, and Suzhou) from 2017 through 2018, investigating the current housing security systems in these five cities as well as the current housing conditions of low-income migrant workers. During the past few years, the central government has issued a series of relevant policies, including promotion of new-type urbanization, the implementation of plans for the reconstruction of urban slums, and reforms to rental market policies. With these policy changes as its backdrop, this report emphasizes the structural factors at the root of rural-urban migrants’ housing difficulties, details the changes to migrants’ housing situation brought on by Tier 1 cities’ rental policy reforms, and proposes feasible methods to address the housing problems faced by rural-urban migrants.

Gaps in urban housing security policies force migrant workers to live in informal housing.

In the five cities where this research was carried out, rural migrant workers make up a significant part of the long-term urban population and are an important part of the urban labor force. Nevertheless, urban governments – driven by population targets and industrial upgrading goals – tend to view the task of providing public housing as an important tool in the struggle to attract talent, rather than a tool to aid migrant workers. Meanwhile, affordable housing measures for low-income workers are directed at the population holding local hukou. Despite having lived and worked in cities for years, the migrant population who have been unable to obtain local hukou are not welcomed by this logic of urban population management, and as a result, urban housing security systems admit extremely small numbers of rural migrants. The corresponding provision of housing insurance and other public services are clearly insufficient to meet migrants’ needs.

Current housing security policies tend to view the “employing unit” (yonggong danwei) as the entity charged with improving migrant workers’ living conditions. As a result, cities encourage employers to fulfill social responsibilities by funding and providing rural-urban migrants with living spaces that meet basic safety requirements. However, dormitories tend to bring living spaces and work spaces together, extending control over rural migrants’ lives from the workplace into everyday life. For migrant workers, dormitories only provide a place to sleep, and rarely offer private living spaces for individuals or families. As a result, dormitories can be seen as a hidden means of expropriation of the possibility of social and family life for migrant workers. In the current context of industrial upgrading and dispersed, flexible hiring in which the size of employing firms is decreasing, the amount of stable housing provided by dormitories is gradually shrinking. From 2011 to 2016, the percentage of migrant workers whose employers provided free dormitory housing decreased from 49.9% to 13.4% nationwide.

Urban villages and “group rental” become key temporary living spaces

Currently, the great majority of migrant workers must rent rooms or other housing on their own.  Data from the National Statistical Bureau published in 2016 demonstrate that 62.4% of rural-urban migrant workers rent housing on the open housing market. During the past five years, rents in market-rate housing in the five cities included in this study rose extremely rapidly. Under economic conditions in which average salaries remain low and see only gradual increases, migrant workers often face severe housing pressure. Migrant workers are unable to support the cost of formal market-priced housing, and as a result are forced to live in informal housing[1] in which property rights are unclear and residents’ rights are not protected. Among these forms of urban housing, rental housing in “urban villages” and “group rental” arrangements are the most widespread.

“Urban villages” (chengzhongcun) are a relatively good housing niche for low-income rural-urban migrants who lack dormitory housing, as well as those who bring their families to the city with them, or those who desire a level of separation from the control they experience in the workplace. Although rents in urban villages are relatively low, their locations are often quite convenient to urban transport options, and the surrounding urban area provides all of the necessities for life at affordable costs. Despite these and other desirable qualities, urban villages fail to secure rights for long-term renters, and may hide safety hazards and other issues. During the past few years of rapid urbanization, the unchecked spread of renovation and sub-leasing arrangements has led to steep increases in rent prices in urban villages. This has resulted in difficult housing situations for a great number of low-waged workers in industries where salary increases are relatively slow, including the service industry.

The supply of low-priced housing has been dramatically reduced as a result of the demolition and renewal of slum communities. More and more migrant workers have been forced out of their original housing and into housing that offers minimal space per person; the highly-compressed living spaces of group rental housing have become the migrant population’s only option. Group rental housing can be divided into two types: In the first, renters supply housing to individuals on the private housing market. In the second, group rental spaces are arranged by employers for their staff. In areas with large migrant populations, landlords and private intermediaries see opportunities to partition individual rental spaces into smaller rented rooms, or to install bunk beds and rent out individual bed spaces, increasing profits as a result. These group-rental housing forms are primarily distributed in urban and suburban commercial housing, housing constructed to resettle the owners of previously demolished housing, aging residential buildings, and some urban villages. Research by the Shanghai Fire Department in 2007 demonstrated that group rental housing existed in more than 30% of the residential compounds in four districts where migrant workers are concentrated;[2] in Wuhan and Suzhou, it is extremely common to see resettlement housing remodeled for use as group-rental housing. Besides migrant workers seeking out housing on the group-rental housing market, arrangements in which employers rent housing on the private rental market and then arrange beds and shared housing for their employees is extremely common. In the context of a changing industrial structure and shrinking average employer size, this type of group rental is nearly universal across the service industry, including in foodservice, security, sales, and delivery businesses. Because group rental housing is constructed cheaply inside housing structures that were not originally designed to serve such a dense population, electrical services and fire escape facilities are insufficient, resulting in safety hazards.

The elimination of informal housing causes the forced movement of migrant workers: Effects of the demolition of urban villages and the “Combat Group Rental” policy

Under central government’s broad directive to demolish and rebuild slum areas, all manner of “slum communities,” including urban villages, dangerously aging urban residential buildings, and architectural complexes that do not conform to code are all undergoing large-scale demolition and reconstruction. The process of reconstruction in urban villages involves several interest groups: During the consultation process prior to demolition, conflicts between the local state, developers, and original residents often center on compensation, resettlement, and other issues. However, the dense population of migrant renters in urban villages – the “silent fourth party” in the renovation of urban villages – are stripped of their rights as residents, and are unable to obtain any type of compensation or renters’ insurance.[3] As the speed of urban renewal increases, the scope of the remaining “urban villages” diminishes and the cost of living in urban areas increases, aggravating the difficulties migrant workers face in obtaining affordable housing.

During the past few years, a campaign against group rentals and the illegal renovation of rental properties has been launched in multiple Tier 1 cities, justified by the fight against latent fire hazards. Repeated problems with public order, fire prevention, and taxation have led to a high level of public interest in the phenomenon of group renting, and have led Shanghai to adopt strict enforcement measures against group rentals. In Beijing, the municipal government’s recent campaign of demolition and renovation aimed at suburban areas which house many migrant workers has caused widespread controversy, as a large quantity of low-income migrant workers were forced to immediately vacate their homes or even leave the city. More recently, Suzhou launched its “3-3-1” campaign, which focuses on code enforcement in three types of safety hazards: “three-in-one” buildings,[4] rental housing (especially group rentals), and the charging of electric scooters. It is worth noting that under the current legal framework, residents’ rights are still based on property ownership, putting migrant workers who rent housing in urban areas at a significant disadvantage. Consequently, the great number of migrants who are forced to move house as a result of slum renewal or administrative decisions based on “fire risk” or “environmental cleanup” have no ability to obtain any kind of resettlement insurance, as a result of their lack of property rights.

The “normalization” of informal housing creates population displacement.

Under comprehensive central government policies intended to accelerate the development of housing rental markets, cities have responded one after another by issuing rental policy regulations, attempting to promote standardization and scale up the development of the housing rental industry. Branded apartments and other agency-managed rental systems have received strong governmental support and promotion. Nevertheless, the vast majority of the branded apartment supply in Shenzhen and Guangzhou is literally built on the eviction and forced movement of the migrant workers who originally inhabited informal housing sites. When these areas are “standardized” and “scaled up”, they are rebuilt under the unified management of leasing companies. However, the resulting high rents serve to exclude the migrant workers who lived there previously, as they bring about rapid increases in price throughout the rental market. This further facilitates the gentrification of the surrounding communities, and only aggravates the difficult housing situation faced by migrant laborers. While the leasing party in the long-term rental market has shifted from individuals to corporations, China still lacks a mature body of standards and norms regulating leasing companies. Furthermore, leasing companies and renters are on unequal footing when it comes to rights, and unreasonable rental systems are common, as are discriminatory clauses that are detrimental to renters. In the case of disputes, renters are placed in the unenviable position of facing up to a corporate structure that is much more powerful than they are in civil court. The business of developing blue-collar housing for migrant workers remains undeveloped, and the relevant policy programs that would stimulate this development are still incomplete. As is made clear above, the scaling-up and standardization of housing through the agency system brings only minuscule benefits to migrant workers’ living conditions.

Urban benefits are unobtainable for migrant workers

Currently, most cities require migrant workers to base their applications for public services on “Lease contract registration certificates” (fangwu zulin hetong beian zhengming). At the same time, the majority of migrant workers live in factory dormitories, collective housing, urban village housing, and blue-collar apartment housing. As a result of unclear policies, landlords’ unwillingness to file for registration of their rental property, or circumstances in housing units cannot be registered as a result of property-rights issues, migrant workers have great difficulties in obtaining proof of their rental contracts. This has led to a failure to implement policies that would equalize migrant workers’ access to urban public services.

On the whole, migrant workers are important contributors to cities’ economic development, as well as important providers of basic urban services. Nevertheless, the urban living spaces available to them are currently being significantly reduced. Urban housing security systems fail to admit migrant workers, and a large quantity of informal housing is rapidly disappearing. During the process of formalizing the housing rental market, the reconstruction of previously informal housing expels and excludes migrant workers, resulting in an even lower likelihood that these workers will be able to obtain urban public services.

Policy Recommendations

With an eye to the protection of migrant workers’ residence rights in cities, the research team offers the following recommendations to The Ministry of Housing and Urban-Rural Development:

1: Set up a special working group which leads the comprehensive planning of the national housing protection policies for migrant workers. They should enact respective development goals according to the central and municipal governments’ situation, announce and monitor the progress of the municipal government, and include 30% of the migrant workers in the cities’ housing protection system in 5 years.

2: In a metropolis filled with migrants, the departments for housing protection should lower the bar for its current housing protection, and set the rent level according to the income. Therefore the housing protection policies can truly benefit the low-income migrants who face difficulties in finding adequate housing, make the basic public services in the cities more equal, and improve the living condition of the migrant workers.

3: Set up working group with the provincial and municipal governments for renewal projects in urban villages and run-down areas. The local government should fund and lead the renewal projects for the residential buildings with few fire and safety problem.

4: Currently, most cities require migrant workers to base their applications for public services on “Lease contract registration certificates” (fangwu zulin hetong beian zhengming). Urban governments should link existing information on migrant workers captured by community management mechanisms to networks that provide public services. Furthermore, urban governments should supervise lessors to ensure that they take responsibility for registration, so that migrant workers can effectively apply for basic urban services.

5: Relevant government departments should accelerate the completion and final implementation of the proposed Housing Rental and Sales Management Regulations issued in 2017. Along with other rental regulations, these will protect the equal rights of renters and lessors, strengthen norms, and supervise the scaling-up of real-estate corporations’ rental operations. To strengthen the power of rent pricing controls in areas with a tight supply of rental housing, local governments should refer to the structure of Germany’s 2015 Mietpreisbremse rent control policy.

6: Implement a feasible scheme to use the reconstruction of urban villages to build public housing and alleviate housing pressure for migrant workers. In order to avoid the expulsion of migrant workers living in urban villages as a result of real-estate oriented urban reconstruction, we suggest that the reconstruction of urban villages be linked to the construction of public rental housing as a step to to resolve migrant workers’ housing problems. This method is not only easily operationalized and relatively low-cost, but also maintains the better part of the reason why urban villages are useful housing for migrant workers, including convenient access to urban transportation and a surrounding area that provides the necessities for urban life. In practice, governments will need to provide financial investment, provide supervision based on the tenets of a just society, and ensure that rental prices in the post-reconstruction housing is affordable.

The first collaborative reconstruction of an urban village involving the government, industry, and village cooperative enterprises was finished in Shenzhen in 2017. However, this project, the Shuiwei Ningmeng Rencai Apartments, only provides housing through an application process limited to specially designated “talents.” In Wuhan, the reconstruction of Hongshan District’s Nanhu Village and Mahu village, among others, was linked to the construction of public housing. This “Hongshan Model” is a specific point of emphasis for the local government, pointing to the future direction of reconstruction efforts. However, these developments currently limit housing applications to holders of Wuhan hukou. These two examples make it clear that where collectively-held land is used to build public housing, legal measures to ensure equality of access to the post-reconstruction housing are key. We are of the opinion that this should be combined with the conditions of our second recommendation, lowering the barriers to apply for public rental housing and gradually bringing hardworking migrant workers who have stable employment and positive participation in service to society into the housing security system. Without these measures, it will be impossible to truly protect the interests of migrant workers, the current residents of these housing resources.

In late 2017, the temporary rental housing project proposed by the Hangzhou Experimental Housing Rental Working Group planned to link the reconstruction of urban villages and aging housing structures to the construction of collective housing in areas where convenient transportation and comparatively complete urban services are available. Areas set to be demolished, as well as already demolished areas where construction had not yet begun, were set aside for new construction of collective dormitories that would provide housing security for migrant service workers. This policy concept, which combines the transformation of urban villages with protection for migrant workers’ living conditions, alleviated housing pressure on low-income migrant workers who are primarily employed in the provision of basic city services. It is worth consideration by other large cities that are home to flourishing, rapidly developing service industries.

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