wechat_bg

2020-12-09 11:58:22

Authorities in the eastern Chinese city of Nanjing have withdrawn an announcement pledging to provide temporary housing for people displaced because of a major rental housing company’s financial woes.

Nanjing’s housing and real estate management bureau published the announcement Monday on its official account on social app WeChat, addressing tenants of Danke Apartment, one of China’s biggest rental housing agencies. The bureau said two other housing agencies would provide 30 properties to affected Danke tenants in the city free of charge for up to two months. The announcement had been taken offline by Wednesday morning.

“The intention of the announcement was to call for more properties to chime in and help. Our work is still at an early stage,” an employee from the bureau surnamed Zhang told Sixth Tone. “The article was deleted because we’re hoping to move forward with this in a low-key manner.”

Danke, which owns or operates 500,000 rental properties in 13 Chinese cities, has been rumored to be the verge of bankruptcy since November because of the cutthroat domestic housing industry’s unchecked, debt-fueled growth.

Established in 2015, Danke leases apartments that it rents directly from landlords. It profits by refurbishing the properties and raising rents, or by providing personalized services to tenants. The company has been skimping on paying property owners since early November.

According to domestic media, many renters — some facing cut-off utilities and eviction orders from landlords, despite having paid their rent to Danke — are unable to terminate their leases or housing-related loans.

Keeping roofs over tenants’ heads is now a matter of critical importance to China’s big cities.

On Dec. 1, a national industry association comprising over a dozen rental housing firms released a proposal calling for real estate companies and rental housing agencies to lend support to the Danke crisis by providing free emergency housing for tenants at risk of eviction.

The housing and construction bureau in the southern city of Shenzhen further said local property management companies would be prohibited from cutting off utilities in order to evict Danke renters. And in responses to complaints about Danke-affiliated landlords, authorities in Shanghai said property management companies should not force out renters.

“Currently, Danke is struggling with tight cash flow, and multiple payments were delayed or suspended,” read an official response from Shanghai’s housing authority. “It will take more time for things to go back to normal.”

In the dispute between Danke tenants and landlords — both of whom are victims — the tenants’ rights must be strictly protected, according to Liu Junhai, a law professor at Beijing’s Renmin University of China.

“Danke should take full responsibility since it has not yet declared bankruptcy, or the law will surely bite,” Liu told Sixth Tone. “To maintain social stability, it’s also helpful for the government to step in and help enforce the law.”

Because many Danke renters take out bank loans to help pay their rent, loan cancellations and dented credit scores are also major concerns. WeBank — tech giant Tencent’s digital-only bank, and one of several financial institutions that partners with Danke to provide loan services — announced last week that it will waive interest payments and extend loans to more than 160,000 customers who borrow money to make payments to Danke until the end of 2023.

Yang Wanming, vice president of the Supreme People’s Court, said at a press conference last week that local authorities are dealing with the situation. “If we end up with a case that proceeds through the legal system, we will be sure to judge it with strict scrutiny, based on the facts and the law, to protect people’s rights,” Yang said.

Editor: David Paulk.

(Header image: Danke ads displayed in Wuhan, Hubei province, 2019. People Visual)