Hu lives here beneath an affluent downtown apartment building, in a
windowless, 4 square-meter (43 square-foot) apartment with his wife.
For 400 yuan ($65.85) a month in rent, there's no air-conditioning,
the only suggestion of heat is a pipe snaking through to deliver gas
to the apartments above and the bathroom is a fetid, shared toilet
down the hall.
"I can't afford to rent a house," said Hu as he showed off his
meager appointments. Living in basement apartments isn't illegal in
China, but like anywhere else it is nothing to brag about and Hu,
who guts fish for 2,500 yuan a month at a popular Sichuanese hotpot
restaurant on the street above, declined to provide his given name.
"If I weren't trying to save money, I wouldn't live here," he said.
Locals have dubbed Hu and his fellow subterranean denizens the "rat
race" — casualties and simultaneously emblems of a housing market
beyond the government's control.
Despite efforts to discourage property speculation and develop
affordable housing, a steady stream of job-seekers from the
countryside and a lack of attractive investment alternatives have
kept prices soaring. Residential property prices rose 10 percent in
November from the same month of 2012, according to data released
last week, and have been setting new records every year since 2009.
Prices in Beijing are rising even faster — 16 percent a year — with
rents climbing 12 percent a year.
LOVELY SEWER, CLOSE TO MANHOLES
That's pushing more and more newly arrived urbanites underground. Of
the estimated 7.7 million migrants living in Beijing, nearly a fifth
live either at their workplace or underground, according to state
news agency Xinhua. Beijing's housing authority refuted this
statistic, saying in an email to Reuters that a government survey
last year found only about 280,000 migrants living in basements and
that only a small percentage of Beijing's basements were being used
Last month, authorities sealed Beijing's manhole covers after local
media discovered a group of people living in the sewers below, with
one, a 52-year-old car washer, reported by the local media to have
been living there for at least a decade. The sewer dwellers were
relocated and those not from Beijing sent back home.
Surging residential prices are both boon and bane to the government.
China's booming property sector accounts for roughly 15 percent of
GDP and heavily indebted local governments rely on land sales — selling land earns them roughly three times what they collect from
But rising prices are putting home ownership farther out of reach
for most Chinese, worsening the gap between rich and poor and
breeding social discontent.
"Some people can buy several homes, some people can't even buy one,"
said Mao Yushi, co-founder and honorary president at the Unirule
Institute of Economics, an independent think tank in Beijing. "There
will be an impact on society."
The government has responded by restricting home purchases and
boosting the supply of low-cost public housing. In Beijing, the
total floor space of public housing rose 20 percent in the first 11
months of 2013 from the year before.
But with the promise of employment and education beckoning in big
cities like Beijing and Shanghai, the problem appears likely to only
get worse. Beijing saw another 316,000 migrants arrive in 2012,
lifting its population to 19.6 million.
[to top of second column]
IF YOU HAVE TO ASK, YOU CAN'T AFFORD IT
That has made housing in Beijing more expensive relative to average
incomes than in many developed countries. The median price for
residential property in Beijing is over $4,500 a square meter,
according to property developer Soufun, with rents running at $9.50
per square meter — in a nation where the average annual income is
just over $6,000.
That makes Beijing homes almost three times as expensive for Chinese
as buying a home in New York City is for Americans, according to
Reuters calculations based on data from the World Bank and San
Francisco-based property website Trulia. Renting a 1,000 square-foot
apartment in China's capital would cost almost double the average
citizen's monthly income.
Not surprisingly, public opinion polls routinely rank rising home
prices as one of the biggest sources of anxiety among Chinese
adults. A 2012 survey by the Hong Kong media website Phoenix found
that couples in Beijing, Shanghai, Guangzhou and Shenzhen spend on
average 42 percent of their combined monthly income on mortgages.
Chinese have invented the term "housing slave" to describe those
struggling to make hefty monthly mortgages payments.
But with Beijing home prices having risen six-fold in the past
decade, according to Soufun, even cheap public housing can be beyond
the reach of many, forcing them to seek less attractive
In a basement below a block of apartments in downtown Beijing,
residents walk stooped to avoid pipes hanging from the ceilings.
"This is better than other basements in the area," said one
The typical basement or workplace apartment is less than 5 square
meters, according to Xinhua, less than a tenth the size of the
typical Beijing apartment. Fires sometimes break out in basements
when people cook — at least three were reported in Beijing last
Apartments are so small that Hu said he and his wife have trouble
sleeping together in their tiny bed. He has resorted to spending
most nights in another basement apartment provided by his
His wife yearns for a larger home above ground and in the meantime
makes do by decorating the room with plastic bells and flowers that
Hu says she finds in the street. Their dream of owning a home
remains distant and Hu says basement living has hurt their
"It's too difficult to have a house right now," said Hu. "Every
basement has people living in it. See for yourself. There are so
many of us out there."
(Reporting by Aileen Wang and Koh Gui
Qing; additional reporting by Beijing Newsroom and Shao Xiaoyi;
editing by Wayne Arnold)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.