Gentrification in Peking and Paris (II)

Haussmann2

In both cities, housing conditions were poor before the start of the renovation work. In Paris, some inhabitants of the time qualified living conditions as deplorable and cholera epidemics ravaged the city. In Beijing, housing was old and maintenance was inadequate. Living space per capita was 3.6 square meters in 1978 (the standard was set at 9 square meters, but this was not respected in most cases).1 In 1985, according to a nationwide survey, more than half of Beijing’s residents did not have private kitchens, nearly two-thirds had no access to private toilets and only half had running water in the house.2

It is interesting to note the similarities in the catalysts of the renovations. In Beijing, as well as in the other Chinese cities, liberalization of the land came about as a result of the abandon of central planning and the adoption of the market system. In France, the July Monarchy (1830) marked the advent of capitalism in France and the triumph of the bourgeoisie. Everyone was encouraged to get rich, disregarding hierarchies or social barriers.3 This drew many migrants into the city, where the population increased from 600,000 to almost one million between 1845 and 1848, thus worsening the living conditions.

In Beijing, residents didn’t have ownership rights as such, but benefited from a public rental system. Different schemes of housing redevelopment have been put into effect since the economic reform. At the outset, the municipal government was more sensitive to the social issues, partly because limited public funding was available and residents contributed to the renovation work.  Developers were attached to the relevant governmental departments.  The government tried to foster the return of the original residents to the newly renovated areas by selling properties at discounted prices. As no developer could make a profit out of this scheme, and because the real estate market started to pick up, the government decided to separate from the developers quickly embracing free market policies. Newly independent real estate companies would finance renovation work, with local authorities providing administrative support. This liberalized system was characterized by the very low compensation fees that were granted to displaced residents in order to maximize profits.

In Paris, private developers were also encouraged by administrative support in the form of subsidized prices for the acquisition of expropriated land. For instance, for the Louvre-Rivoli work, the well-known Pereire brothers were offered land for 380 F/m2, when the market price in the area was around 950 F/m2. As in the case of Beijing during the first years of the opening, developers were in charge of distributing compensation to landlords and carrying out demolition work. The city granted them a fixed subsidy, payable over six years, that was obtained by issuing Treasury Bonds. Haussmann used the theory of productive costs to win over his detractors. He claimed that “it was necessary to acknowledge that parallel to the costs was the creation of much greater wealth”4. The upcoming Universal Exhibition of 1855 was to prove his point, as it attracted more than five million visitors. This theory also served Beijing after it was elected to host the 2008 Olympic Games in 2001. The city increased renovation work and launched new infrastructure projects under the one world one dream slogan (projects included a new airport terminal, eight new subway lines, 252 new star-rated hotels and 83 kilometres of planted greenbelt).

(The third part of this article will be published next Friday)

  1. Kirkby, R. J. R. (1990) China in K. Mathéy (ed.) Housing Policies in the Socialist Third World, London; New York: Mansell []
  2. Fan Y. (1989) Beijing Chengshi Zhuzhai Wenti de Xiangzhuang he Renwu. Beijing Guihua Jianshe, 8 []
  3. Patrice de Moncan (2009) Le Paris d’Haussmann. Les Editions du Mécène, Paris []
  4. E.G. Haussmann, Mémoires, 1890-1893 []

Miguel Elosua

Spanish qualified lawyer; PhD in Chinese Law. UrbaChina Research Officer. Has lived in China since 2006.

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3 thoughts on “Gentrification in Peking and Paris (II)

  1. Angel de la Puente

    Miguel very interesting analogy, do you thing that this renovation could possible be done, by
    free market agreements at market price between the developers and the owners of the properties.

    It could lead to a City that may look like more London than Paris

    Reply
    1. Miguel Elosua Post author

      Thanks for your question. I’m not knowledgeable about London. As for Peking, the problem is that at the outset of the city’s modernization the government had to finance works because there were no private developers. The real estate market was at an incipient phase. Later on, it was necessary to lure newly incorporated developers by keeping compensation fees low. Along with the pick up in the real estate market, compensation fees have been raised gradually. The main issue remains rural land converted to State (urban) land as a consequence of city expansion. In these cases, compensation fees are still calculated as a function of the value of crops instead of regarding the price of adjacent urban land. This represents an important difference with Paris since its modernization relied more on revamping entire quarters than on city expansion.

      Reply

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