Residences that rent for less than fair market value for their residences may soon become a thing of the past.

As of October 1, those who may be paying just 500 yuan (US$60) in rent for accommodation that could fetch twice as much on the market will be moved out of their houses by the Beijing municipal government, the Beijing News reported.

The local government is building three residential areas in Chaoyang and Fengtai districts. Homes there average 3,500 yuan (US$420) per square meter, far lower than real estate prices elsewhere.

The abnormally low rents in these areas are a leftover from the period of the Cultural Revolution (1966–1976).

Around the time of the Cultural Revolution, privately owned homes were confiscated as government property and were rented out, said Yu Liang, a department director of the Beijing Municipal Rent-controlled Residence Work Supervision Office. They accounted for some 510,000 rooms.

When the Cultural Revolution ended, owners recovered their property, but with the proviso that they allow the tenants to remain.

The agreements signed between homeowners and the local government lacked a very important clause: a deadline for renters to move out.

The Beijing municipal government began to deal with the problem in 2001, when there were nearly 40,000 residences occupied by such tenants.

Ninety-six percent were located in the city’s central Dongcheng, Xicheng, Chongwen and Xuanwu districts. The rest were in Chaoyang, Haidian, Fengtai and Tongzhou districts.

The Beijing Municipal Administration of State Land, Resources and Housing said the situation has interfered with real estate owners’ income and relations between owners and renters.

Nearly 6,600 tenants have moved out of the houses they rented and 7,400 others will finish moving by October 1.

Zhao Yujie, 52, says it took three years of effort to get his house back. He owns two rooms in southern Beijing’s Xuanwu District.

“But my family had to squeeze into a small room of less than 20 square meters for more than 10 years,” he said.

The municipal government issued a notice in 2003 to accelerate the return of rent-controlled dwellings to their owners, and Zhao got his rooms back last year.

“This not only guarantees my own legal interests, but also safeguards the credibility of the Constitution, which clarifies protection of private property,” he said.

(China Daily August 4, 2004)