Story of a Nailhouse in Shenzhen

The story of an adventurous couple, and the history of a city

Cai Zhuxiang and Zhang Lianhao, a couple from Shenzhen, were popular on the media in 2007 due to the unprecedented 17 million (CNY) compensation that they received from a real estate developer for their house. The stories of this adventurous couple have documented the history of the newly-developed city: from 10m to 400m building height, from rural villages to a metropolis, and from self-owned properties to village joint corporations and state-owned properties. The villagers turned to be citizens in one night, and their past life was swallowed up by the new history.

A lot of urban-related issues can be examined in the stories about this couple. How did the local government turn the villages into a city? What was lost during the reform of local land policies? How did the nail house increase public’s attention of private properties? How did these urban villages support the rapid development of the city by providing affordable housing for the new rural-to-urban migrants?

In short, the stories of this couple are reflecting different historical moments of both Shenzhen and China. The purpose for documenting these stories is to question what we can learn from the history of Shenzhen regarding democracy, laws, and sustainable urban development.

The couple

Cai was born in the Cai’s village (Caiwuwei Village) in 1950, while Zhang was born in Guangzhou in 1948. Supporting the Up to the Mountains and Down to the Countryside Movement in 1960s, Zhang moved to Cai’s village in 1965 and married with Cai in 1969. Cai worked as a tractor driver in the village, an admirable job at that time, and Zhang managed a litchi garden.

In 1972, the man decided to take the first adventure in his life to get out of poverty. He sneaked to Hong Kong without informing his old mother and young children. In 1970s, the daily income for a villager in Bao’an County (the former name of Shenzhen) was 0.7 CNY, while the number was around 70 HKD in Hong Kong, a city just across the Shenzhen River. The huge income gap encouraged millions of people to swim across the river, the “Berlin Wall” in China. Cai was one of the millions of illegal immigrants in Hong Kong. As Hong Kong was experiencing a rapid development in 1970s with a huge demand of cheap labor, the British Hong Kong Government acquiesced the illegal immigration by adopting the Touch Base Policy in November 1974, which allowed immigrants from Mainland China who reached the urban areas and met their relatives to register for a Hong Kong Identity Card. Under this policy, Cai earned his Hong Kong identity, and lost his Chinese identity automatically.

After working as a construction worker in Hong Kong for six years, Cai took his second chance to fight against destiny. In the end of 1978, Cai lost his job due to the over-supply of cheap labor brought by the new waves of illegal immigration from China. Suggested by one of his friends, the man decided to migrate to the States. He bought a ticket to Quito, Ecuador via Los Angeles, while he planned to leave the Los Angeles Airport during the short stop, as many Hong Kong people did in the early 1970s. Unfortunately, Cai and his friends did not succeed, and he started his journey in South America. One week after arriving at Quito, Cai moved to Guayaquil, a harbor city like Hong Kong, and opened a Chinese restaurant the Hong Kong House there. He travelled to Bolivia, Paraguay, Columbia, and Argentina. He married with a local woman and had two children in his new family. He thought he would spent the rest of his life in South America until he met one overseas Chinese in 1988 in Saint Paul, who told Cai that Shenzhen had become a Special Economic Zone and presented a photo of Shenzhen International Trade Tower as a proof.

Having left home for 16 years and hearing the news about Shenzhen’s rapid development, the 38-year-old man wanted to go back to his old village. Cai bought an air ticket to Hong Kong, left his family in Ecuador, and came back to Shenzhen through Hong Kong on September 15th 1988.

The nail house

During the days after Cai left, Zhang took the responsibility to take care of the big family. As Zhang was not born in the Cai’s village, and as she did not share the same family name, Zhang was not treated well by the other villagers during Cai’s leave. The woman did five jobs to support the whole family and had a hard time waiting for his husband. In 1982, the village allocated 80 SQM of land to each family, and Zhang built a two-and-half-story house with her own savings and the money sent by Cai when he worked in Hong Kong. [According to《深圳市经济特区农村社员建设用地暂行规定》, a local policy adopted in 1982, the allocated land area for each family could not exceed 80 SQM]

After Cai came back home in 1988, the couple added two stories to their house in the first wave of urban development. With a population increase from 100K to 1M in just nine years, Shenzhen’s fast urban development encouraged the local villagers to add or rebuild their houses. The government released the《关于进一步加强深圳特区农村规划工作的通知》 in 1986 to regulate villagers’ constructions by setting the boundary and limiting the total floor area that each villager could build. However, stimulated by the huge market, the villagers never stopped breaking the rules. In 1988 and 1989, Shenzhen government introduced polices such as《关于深圳经济特区征地工作的若干规定》to take over the land ownership from the villagers without paying sufficient compensation. These policies not only helped little in controlling villagers’ constructions, as the policies did not get the agreement from the villagers, but also encouraged villagers to initiate a new wave of construction. Cai and Zhang added two stories to their house and tiled it carefully to attract renters.

With Shenzhen’s population increased from 1M to 2M in ten years, the villages became the perfect resource of affordable housing for new-comers. Many villagers demolished their small houses to build taller buildings for accommodating more people. Cai and Zhang spent 1M CNY to build a new six-story building in 1996. To differentiate from the other villagers, who built their houses with small one-bedroom-one-living-room suites, Cai chose to build the new tower with large three-bedroom-one-living-room suites. Their choice resulted in a lower rate of return in leasing, as many new-comers could not afford large suites, but the couple did not regret. They felt becoming rich in one night and enjoyed a peaceful life by having teas with friends and walking around the parks every morning.

Having enjoyed such living for eight years, Cai came to his third fight in life. In 2003, the government decided to develop a new financial center in the place where Cai’s village was located. However, the villagers first knew this news from a local paper of November 11th 2005 and just realized the village head had signed a sale contract on October 15th 2004 with Kingkey, a real estate developer, without obtaining their authorization. According to Kingkey, the developer was also “shocked” by the fact that Cai Hongliang, the president of the village joint company who signed the contract, had not obtained the villagers’ permission.  The president explained in a TV interview that, considering the overall situation of urban development, he could not negotiate with the villagers one by one when selling the 46,000 SQM land. With a possibly invalid contract, the government and the developer still decided to execute the deal. Cai and the other villagers decided to fight for their rights.

From November 2005 to August 2006, the compensation plans proposed by Kingkey could not satisfy most villagers, and the redevelopment was suspended. In the beginning, the developer provided villagers with a 1-to-1 plan: each family would get a compensation of the same area of their original house. The first 120 SQM area would be a new flat on the same site, while the rest area would be compensated at a price of 6,500CNY/SQM. Considering the nearby property price had reached 10,000CNY/SQM already, the villagers thought the proposal was not fair and refused to accept it.

The government started to facilitate the redevelopment in August 2006. After the former mayor, Xu Zongheng investigated in the Cai’s village, the government and the developer accepted villagers’ suggestions and provided an additional 660,000CNY “reward” for each building (300,000CNY from the developer and 360,000CNY from the district government) if the owner could sign the agreement before September 15th 2006. Besides, the developer also increased the rent compensation for villagers’ living during the redevelopment from 25CNY/SQM to 30CNY/SQM. To facilitate the process, the developer even proposed to buy the ground floor properties at a price of 12,000CNY/SQM immediately. Till October 23rd 2006, 95% of the 386 families had signed their agreements under these new policies. However, Cai and other 15 families still did not accept. According to Cai, as he was a Hong Kong resident and Zhang was not a local-born resident, neither Cai nor Zhang had the right to have shares or earn dividends from the village joint company. Therefore, if they lost their house, they would have nothing.

Cai tried to negotiate with the developer for a higher compensation. They asked for a price of 12,000CNY/SQM for all their properties, but the couple got refused by the developer. The developer threatened Cai that if he did not accept the deal he would receive even less compensation. Later, the developer compromised and agreed to increase the compensation to 9,000CNY/SQM. Cai and Zhang did not accept the deal either. In early 2007, Kingkey complained to the Land and Resources Bureau, and the LRB sent an award to Cai on March 22nd 2007 ordering Cai and his family to leave in twenty days.

The man was irritated by the decision, and he decided to fight to the end. On March 29th 2007, Zhang posted an article on a local site expressing her helplessness. The post became hot in one night for several reasons: the only house left on the site (called nail house by the public), the Hong Kong identity of Cai, the proposed highest tower in Southern China, and the dramatically increasing property price in Shenzhen.

The post put heavy pressure on the Shenzhen government. On April 13th 2007, the government released a report 《蔡屋围金融中心改造项目依法拆迁情况》on a press conference. The officials expressed their attitudes on this troublesome issue. They hoped to come to an agreement with the property owner through negotiations. If the agreement was not achieved in the end, the government would try to demolish the nail houses by force and protect the interests of the other households that had signed their agreements.

The couple’s fight did not stop. They applied for an administrative reconsideration for the LRB’s decision on May 13th 2007, but the municipal government decided to support the LRB. They initiated a lawsuit against the LRB. In their statement, the couple asked the court to cancel the decision of LRB because the property price had increased to 20,000CNY/SQM while the compensation price was still 6,500CNY/SQM, and the deal was extremely unfair.

On the other side, the LRB submitted an application to the district court for force implement. According to LRB, they needed to protect the public interests and avoid the other villagers’ interests getting hurt.

The most important turning point came with an announcement from the Ministry of Land and Resources. In the announcement 《城乡建设用地挂钩试点禁搞行政命令强拆》, which was released on August 17th 2007, the MLR asked all local LRBs to avoid force implement during urban development. In March 2007, China carried out its first Property Law for protecting private properties. The announcement and the newly-issued Property Law became the weapons of Cai to protect his house.

All parties went back to the table for further negotiation. Since Kinkey had worked on this project for three years and worried about further loss caused by the delay, the developer became soft, and the negotiations went on smoothly. After four times of mediation organized by the district court, the developer and Cai finally came to an agreement on 19:00 September 21st 2007. On the next day, the couple received their 17M CNY compensation from the developer for their 779.81SQM six-story house.

The success of Cai made him famous country-wide. People facing similar situations came to him for suggestions, and he just brought them to buy the Property Law book. He believed he could not win the fight without the law, and the law might be the most useful weapon when challenging the developers and the local governments.

The ending

In this fight, no one became a winner. The villagers had to wait for another two years for moving back. The government had to wait for another two years for a new financial center. The developer paid much more than what Cai initially asked for. Cai and his family became the enemies of the whole village and permanently lost their connections with the old friends and relatives. Even though they had earned an incredible compensation, Cai and Zhang also lost their only permanent property.

Upon receiving the huge compensation, the couple divided it into four shares. One for Cai, one for Zhang, and the rest two were prepared for their daughter and son.

The couple divorced after the fight. No one knew the real reasons for their divorce. The couple cut off all their connections with the other villagers. Zhang rent a flat near the place where the old village once existed, and she then moved back to Guangzhou to hide permanently from the public. Cai spent 2M CNY to buy a flat of 131SQM in Buji, Shenzhen, and he lived with his new girlfriend. No one knew him in the new community, and people forgot about the nail house quickly.

All the villagers, except Cai, moved to the new buildings compensated by the developer after two years. They lived together and felt proud to become urban citizens. They also kept the same traditions of burning in certain dates in memory of their shared ancestors. But they did not want to mention Cai, as if he was never one of this community.

From crossing the “Chinese Berlin Wall”, to moving to South America and coming back, and finally to fighting against the authorities and developers, Cai’s stories were the best vehicle to look into the transformation and urbanization of Shenzhen. The stories were not only legends of the couple’s own lives but also a documentary of China’s reform and complexity.

Reference list:

1.”深圳’天价钉子户’的人生传奇”.南都周刊.Accessed May 30, 2017.

2.”天价’钉子户’蔡珠祥:选择1700万元补偿 我不后悔”.周昌和.王子荣.南都网.Accessed May 30, 2017.

3.”中国最贵钉子户探访:夫妇获赔1700万后已离婚”.唐洁.Accessed May 30, 2017.


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