BEIJING – Tenants always lose out. Deposits to be given in advance of three or even six months – and which often with difficulty at the end of the contract are reviewed – unannounced evictions and few legal protections. Let’s say that many of the agencies that offer real estate services born in recent years on the Internet do not help at all – on the contrary, they often create additional problems – and today, renting an apartment in any Chinese city has become a big headache for many.
For this reason, the Beijing authorities have now published a series of draft regulations to bring order to this jungle in the capital’s rental market. Where, for a decent one-bedroom apartment, you pay, on average, 7 thousand yuan a month (900 euros). Following the example of Shenzhen’s decision last month, the new rules include three key points: prohibiting landlords from collecting more than one month’s rent at a time and limiting down payments from tenants in advance to a maximum of a month; create blocked bank accounts for agencies and online platforms that hold customer deposits; punish abuse by landlords, real estate companies and online agencies.
“So far this year the central government and the various local administrations have issued about fifty new rental policies,” writes the economic newspaper Caixin. “And since last month, the Ministry of Housing and Urban-Rural Development together with seven other regulatory authorities has launched an investigation into violations by real estate agencies,” continues the newspaper.
Chinese regulators have stepped up their efforts on the rental market especially after the collapse of Danke Apartment. Founded in 2015 with the promise of offering young “cheap” apartments in metropolises through co-living, it has quickly expanded into the market with aggressive practices – such as discounts to landlords and tenants if you paid the full year’s rent. in advance – but it burned its funds just as quickly. In just five years, another 13 have been added to the Beijing office in as many cities, managing 415,459 apartments at the end of last year. In June 2020, Gao Jing, founder and CEO of the start up, was arrested. The pandemic did the rest: 1.2 billion yuan of losses last year (157 million euros). Result: no more cash on hand to pay homeowners and their employees. And tenants in major cities like Beijing, Shanghai, Guangzhou and Hangzhou who had relied on Danke were evicted en masse.
To make Danke headlines was the news of a boy’s suicide. On December 3 of last year, 20-year-old Zhong Chunyuan, after setting fire to his 10-square-meter room, jumped from the 18th floor of his apartment. That day the owner would evict him, even though young Zhong had already paid a full year’s rent through Danke Apartment.
From the squeeze on the overwhelming power of Big Tech to the new privacy law to protect citizens’ personal data, the rental market will also soon adapt to the new narrative of President Xi Jinping to achieve “shared well-being”: reducing inequalities and forcing companies to treat consumers better.
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