My neighbor knocked at our door this afternoon, and asked me to look at an apartment upstairs. They are transforming the apartment into a group rental suite.
What is Group Rental
It is like shared rooms - many people share the same apartment to lower the cost. But it is not exactly shared room. It is a very professional business. It transfers some good apartment into a new type of suite - separate the rooms into several independent rooms and rent it out separately. The biggest difference between group rental and shared room is, either the number of people living in the room (low end group rental), or the change of the house structure (high end group rental).
Low End Group Rental
The low end group rental is pretty obvious: they put 20 beds into one apartment, and there are 4-8 people living in the double deck room which was originally designed for one person. That is very annoying and cause security and fire risks to the building and other residents.
High End Group Rental
I have visited one pretty high end group rental. It is located in a top residential area, and it is a normal suite from outside. But when you enters, there is a long hall way, and there are 3 secure doors on the right, and two on the left. It is that type of door used for external doors - robbery proof and noisy proof. Each tenant has two keys: one for the external public door, and one for the private door.
On the left, if you open a box, there are five separate water meter, and electricity meter.
For the rooms, every room is equipped with bed, TV set (with satellite!), network cable, micro-wave, and a shower room. Due to the constrain of the original house, they share the same rest room.
The cost for such a room is about 1000 RMB.
I was very impressed when I saw this. Think about the value of 1000 RMB! It is like a residential suite with everything you need as a single, and it enjoys the same view and service as other residents in the top residential area (look at the big grassland downstairs).
The Problem
The benefits for the tenant, and owner of such property are obvious. Cheap but good place to stay, and higher return than renting the whole out to one tenant. It just needs some professional work.
The problem is for the neighbors. What if there are a lot of people living in the same area designed for households? They change all the time, and they are more like party guys, and they by pass all the security checks - tend to leave all the doors open since they don’t have enough door passes.
It brings additional burden to the building, and cause all kinds of risks that a residential area shouldn’t face.
My Naughty Neighbor
So, back to my story. When we found it out, the room was under construction. Workers are shipping many security doors, many hot water machines into the room. It is obvious that all the stuff were used. I guess they were just kicked from another residential area.
Many neighbors gathered, and wanted to do something. Then, the problem is, what can we do?
I described this dilemma in another article . Without a working legal system, everything is within the same government/party system, and you have to keep your finger crossed to have a “good person” handling the case.
The property management company obviously don’t know what they should do. They said they will report to “the above”. That’s it, and I don’t have any hope about what they do.
Then I called 962121, the hot-line by the government to solve this type of complain. They promised 15 days to call back. I have kept the tracking number.
What will happen? I don’t know. The first thing I thought about was to sue them. But, Hmm… “Suing? Are you joking?”
My Recent Thoughts
I am aware that I started to complain more than few years ago. I acknowledge the change, since the more I interact with this society, the harder I feel to get things done. Not just me - I think many people face the same problem. For small stuff like this, I tried to use my own way to solve it, although I know a better solution is call my friend in the government - Hmmm. I don’t like to do it that way. But for really big things like getting my son into a kindergarten, who knows what I will do?
In a twisted and weird society, you just cannot say, “I will do anything for my son”, or “I will do anything for my principle”, because you find yourself in a strange position when the two conflicts.
Related Entries: Real Estate
Comments
Just wondering how much do you pay for per square meter for your property management?
It might relate to the quality of the property management company…
Posted by:
lqm
on September 19, 2009 10:46 PM
It is about 3 RMB / sq. meter. The property management company is bad. I had many conflicts with them. http://home.wangjianshuo.com/archives/20090729_my_conflict_with_safe_guards.htm
I think what I am going to do is to start to participate in the residential committee, and finally replace the management company.
Posted by:
Jian Shuo Wang
on September 19, 2009 11:10 PM
That is taking a nice residential building and trashing it as a group rental. Aren’t there any zoning laws to prevent that?
Posted by:
Shrek7
on September 19, 2009 11:20 PM
Unfortunately, according to the law, you have to establish a Residential Committee first, and change the charter of the residential area, and then use that charter to sue them. We are still about one year away from setting up the Residential Committee.
The good news is, no one really cares about the legal procedure. Just like what I wrote in the “cut tree” story. You always can cut your neighbor’s tree if they cut your tree. I am confident that this problem will settle using some strange ways. Please stay tuned and I will report the process and result.
Posted by:
Jian Shuo Wang
on September 19, 2009 11:42 PM
I’ve visited one of those unit in Lianyang area. To my surprise the rental is not cheap as you mentioned.
Share rest room? that is not a good idea. What happened if these party-goers came home puke everywhere in the restroom. Who is going to clean the mess? hahaha…
Posted by:
DC
on September 19, 2009 11:45 PM
The shared rest room may be the reason for the 1000RMB rental - that is in 2005, and I don’t know the current price (that was 1100 RMB actually).
Posted by:
Jian Shuo Wang
on September 20, 2009 12:00 AM
running one such ‘group housing’ myself and another one coming up soon , i can only say its not that much profitable for land lords{like myself} as the whole apartment itself can also be easily rented out and individual sub-units do also stay vacant few months each year .its only another way of renting your apartment when lower rental yields {as low as 4% annual on investment} really bother actual long term investor in shanghai residential market .and a little more means support to your bottom line {mortgage payments which include interests}
anyways its not illegal to rent like this { i have checked}, only thing is sometimes developers put a limit on number of people living in one apartment but still they calculate 2 people per bedroom system that would work as enough for decent group housings
the people u saw moving in with second hand stuff are actually not house owners but they themselves rent grey apartments to decorate like this for short term and sub-let to others who can only afford small rentals , ,, actually high rental means large area plus good decoration so this is only way to temporary decorate grey apartments and rent them ,, untill prices rise and land lord sells the apartment and these peopel find another such land lord and shift all decorations to new place
some of them run sevral such group housings so if your particular apartment is sold by real land lord they provide you alternate place quickly without need for returning deposits or house hunting! good for everyone . except the complaining neighbours ,,, WJS stop being a shanghainese and try to adjust , these things are part of city life together with crowded subways , dirty alleys and lines at supermarkets
Posted by:
sudhir
on September 20, 2009 9:36 AM
@sudhir, good insight about this industry. I realized that it is an alternative to leverage the “grey house”. Never thought about it that way.
However, I don’t agree with you about the “complaining” part. Why I should “stop being a Shanghainese”? If Shanghainese means the tendency of keeping orders of this society, I AM culturally Shanghainese. No one bothers if it does not impact others, but if does seriously, everyone has concerns. It is OK to adjust when it is the right thing to do, and clearly NO when you have the right to say no.
Regarding whether group rental is legal or illegal, that is relatively complicated - no clear lines, but this is what I learnt. Correct me if I am wrong.
- no matter what the house is used for, it cannot change the internal structure of the house. Putting bathroom somewhere outside where it is designed to be cause serious problem for the building since other part of the floor is not as water proofed as the original place. The cost to do good water proof is so high that not many people do it. That will cause the leak to apartment downstairs. This is against the construction laws.
- Renting to people other than a family and on daily or weekly basis changed the nature of the residential area. It needs special approval to turn a resident house to a business - which is almost impossible for an apartment in a building.
- Finally, whether it is legal or illegal, you need to check the charter of the residential committee. As most of the owners of our building is concerned, we can change the charter to forbidden this behavior, and then it is illegal. It takes time, but we will do it.
Posted by:
Jian Shuo Wang
on September 20, 2009 11:54 AM
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