GUANGZHOU — For the owners of Fuli, one of the leading developers of Guangzhou, May 18 marked a milestone seven years in the making. In a festive atmosphere with drums, incense and fireworks, they handed keys over for brand-new apartments to the people of Yangji, a village nestled in the heart of this megacity in southern China.

Merchants selling interior appliances, mattresses and furniture were quick to position their stalls at the foot of the new towers. Fifteen new buildings of 36 to 42 floors, surrounded by parks, playgrounds, and pools replaced nearly 1,500 dilapidated structures in the old village whose history can be traced all the way back to the Song dynasty, around the year 1000.

The old apartments were so tightly packed that "we could shake the hand of our neighbor from the window," quipped Zhang Huifang, a 40-year-old woman whose husband was born in the village. The couple "swapped" their run-down home of 150 square meters for the same space with all the modern comforts.

Urban village renovation in Liede Village in Guangzhou — Photo: Che Che via Zuma

Lin Jianye was another proud new owner — of three units. Shirtless, wearing a jade necklace and smoking a cigarette, the longtime resident of the village recounted the history of Yangji without interrupting his mahjong game.

The Li family was one of 4 clans that had shaped this history of the town. True, he admits, while moving the game tiles, that his family was scattered in several apartments. But he also believes the direction of the new homes completely messed up the feng shui, which he holds responsible for his cousin's suicide in 2012. "She did not want to leave her place," he said of the mother of three. "No one could reason with her."

The policy of concrete

There are plenty of people like Zhang Huifang and Lin Jianye who believe the pros outweigh the cons in exchanging their old properties for new. But all agree it took far too long, and some longtime residents were indeed broken-hearted to have to leave. An iconic photo in 2012 showed a desperate woman, collapsed in tears and covered with dust from her house that had been demolished to make way for new construction.

In the nearby village of Xiancun, cranes that have been idle for a year and collapsed houses make the scene look like Beirut during the civil war. A barber says: "It has been at least seven years since the developer wanted to level the area." On the opposite side of the street, a poster on a wall warns that blocking demolition is like being "heartless towards one's parents." Still, no one pays it much attention anymore.

This is a country where more concrete has flowed in the last 30 years than all the concrete used in the United States in the 20th century. In China, real estate and politics go hand in hand. The cases of Yangji and Xiancun are not isolated. There are 138 old villages in and around Guangzhou — a metropolitan area that is home to nearly 24 million people — that found themselves swept up by the rapid urbanization of recent decades. The residents of these villages occupy 23% of the buildable area of the city and their total population is estimated to be around 6 million.

In 2002, the city was given 10 years to raze all the villages. Today, only four of them: Liede, Pazhou, Linhe, and Yangji have been rebuilt. Meanwhile, a handful of families are determined not to move. The Chinese call these families "ding zi" or "nail families": nails because they are attached to their homes like nails in walls. "Even the Chinese do not understand the specific nature of these villages," notes Yilong Yao, an economics professor who worked with Jean Tirole, a 2014 economic Nobel Prize winner. For years, he has studied this subject with his students.

Yao explains that these urban villages are a product of 1949, the year of the proclamation of the People's Republic of China, when the localities were endowed with higher social, economic, and political identities. Because they could find affordable rents there, they became the choice refuge for "mingmong," the migrants who formed the working poor backbone of the country's economic miracle. Rehabilitating the villages first requires a change in status, which meant facing the complex laws of the land. The ancestral rivalries between the "small" and "large" owners also helps explain the difficulties. The small owners have occasionally retaliated against the larger owners who have always monopolized the village administrative committees.

The "nail families" are especially fascinating because they illustrate all the legal, political, and social complexities in China, where contrary to Western beliefs, the citizens have long possessed some rights and freedoms. Owners in Yangzi who are some of the last to relent saw streams of water redirected toward their homes to pressure them to move. Photos showing men forcing owners to leave illustrates the combustible real estate-political cocktail that has risen in China over the last 30 years.

Workers dismantle buildings at the construction site of Liede village in Guangzhou — Photo: Zhang Zhitao via Zuma

Take the case of Cao Jianliao, the former vice mayor of Guangzhou who is suspected of receiving a 77-million RMB ($11.5 million) payoff as part of alleged corruption of village committee executives.

Meanwhile, others have served time for refusing to relocate. According to one man who did not want to give up his house, Chen Kailai, "From the beginning, I did not want to negotiate. It was a question of principle: I cannot let my ancestral property be used to enrich the Party."

Omnipotence of money

All of these struggles show the age-old fight against corruption and the powers-that-be. Still, in spite of all the sympathy these struggles can inspire, one can also quickly see the other motivation. Beyond all the desperate and unjust cases, the principal motivation of those who choose to resist is money. The longer one resists and chooses to stay, the better their compensation will be. The local government knows that, and even when they try to remain discreet, the numbers speak for themselves. Initially, there were only about 1% "nail families" and now there are more than 8%.

Quietly flipping through the pages in the newspaper at the entrance of his house, Guo Zhaolai, a self-proclaimed neighborhood gardener, isn't going anywhere. "Why leave? We like it here," he declares. Rather than anger, he is more focused on the size of the check and the amount of property it will buy. In his area, 29 of the 179 residents are still negotiating, even while the rents are skyrocketing. "More than 200 RMB ($30) in three months," laments one young hairdresser who rents a small room.

The first of the four villages to be reconstructed was completed in 2010 when the Asian Games were in Guangzhou. The residents received 4 million RMB ($600,000) in order to not tarnish the event. For the second village, Pazhou, the developer negotiated directly with the villagers, and everything went smoothly.

Since 2012, the courts no longer accept requests from the village committees for compensation. Coincidentally, 2012 was also when the young woman (the wife of Lin Jianye's cousin) committed suicide after refusing to leave. The economist Yilong Yao thinks the most important thing is to create clearer rules, and apply them even-handedly. That may be the most important construction job China needs to work on.