Unwilling Sellers

In the course of assembling land for his new pet project, he met a “nail house” sitting right in the middle of his proposed resort.

It is hardly surprising to see such an incident in a capitalist society. Even in semi-capitalist China, the frequency of such events happening becomes higher by the day as inflowing money poured from all over into her real estate market. We have heard numerous stories of nail houses in Chongqing, Shanghai, Beijing and Shenzhen. “Nail house” originates from the Chinese term “dingzihu” (釘子戶), which means a household or person who refuses to vacate his home to make way for real estate development (literally it means like a nail which is hard to pull out).

While in some cases in China, the story is about the owners of the nail houses wanting to wrestle with the developer for a higher compensation figure, which is not hard to understand in a developing country where a “gold rush” mentality is the norm, there is also genuine concern about local governments colluding with developers to grab land or properties from rightful owners using tactics that amount to nothing less than coercion when the owners show reluctance to sell.

In developed societies other than Scotland like Hong Kong and New York, similar cases are not unheard of, where private property owners and developers/governments come to a head over some private land and property rights when rampant development start to encroach on privately owned properties.

In Donald Trump’s Scotland case, he is reported to have said that the “nail house” is like a pig-sty, to which came the reply from the owner: “It may be to him, but not to me. I have all my family history in this place.” To Trump’s assertion that the owner purposely keeps the place dirty as a tactic to squeeze more money from the sale negotiation, the owner answered that he does not want Trump’s money and that he has all he needs in life. What he is saying is: for him, money does not trump sentimental values.

In Hong Kong, unhappy property owners have been given an alternative proposition to the Urban Renewal Authority’s (URA) offers to buy out all the units in buildings within the Graham St./Peel St. URA project delineation. As explained by the counterproposal organizer, the owners’ main concern is that based on the past experience of other property owners in other URA projects, if they accepted URA’s money offer, they might be unable to buy back properties in the same area and thus would be forced out altogether of a familiar lifestyle and neighborhood. If the owners gain the right to choose their own developer under the counterproposal, at least they can have more say in the planning and development process and are guaranteed a replacement unit within the new development.

What we see here is a case of citizens demanding a choice over the fate of their most valuable piece of asset and of disillusionment over government’s disrespect for private property right through the URA’s dictate of redevelopment procedures. It is not redevelopment itself that they are against, rather, they want it done their own way.

In Brooklyn, New York, the Atlantic Yards land grab story goes like this: a land deal that had almost no public review and took place mainly behind closed doors aroused a cacophony of protests from residents and affected property owners. The land in question belonged to the State of New York, controlled by a Republican governor and legislature. It is alleged the State has basically given the property away to politically-connected Forest City Ratner at under-market value. If ever built, the proposed development would be the densest residential community in the U.S. The case has led to tenants, property owners and activists lodging civil lawsuits against the State for abuse of eminent domain (land resumption by the state for public purpose).

What is at stake here is people’s private property right and their preference for sensible and sustainable community planning.

All in all, with the meteoric rise in global real estate prices and the land grab game on fire, especially in land-poor (relative to population) places like Hong Kong and China, the big question is: is private property right, one of the pillars of capitalism, really sustainable, when so-called public interest clashes with private interests, particularly where governments and rich developers cooperate to usurp private land and properties?