Tag Archives: housing

U.S. consumer confidence at 18-year high; house price gains slow

FILE PHOTO - A home for sale is seen in Santa Monica, California, U.S., March 21, 2017. REUTERS/Lucy Nicholson

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. consumer confidence rose to an 18-year high in October, driven largely by a robust labor market, bolstering expectations that strong economic growth would continue through early 2019.

But a weakening housing market and tightening financial market conditions are casting a shadow on the economic expansion that is in its ninth year, the second longest on record. Home price gains slowed further in August, other data showed, another sign that higher mortgage rates were weighing on housing demand.

“We don’t know how long this is going to hold up, but the consumer is bullish on the outlook and this means the economy is going to continue to advance in this long economic expansion from the last recession,” said Chris Rupkey, chief economist at MUFG in New York.

The Conference Board said its consumer confidence index reading rose to 137.9 this month, the highest since September 2000, from a downwardly revised 135.3 in September. Economists polled by Reuters had forecast the consumer index slipping to 136.0 from the previously reported 138.4 in September.

Consumers’ assessment of current business and labor market conditions improved despite a sharp stock market sell-off and jump in U.S. Treasury yields, which have tightened financial market conditions. The stock market’s S&P 500 index has dropped more than 8 percent this month.

The Conference Board survey puts more emphasis on the labor market. The survey’s so-called labor market differential, derived from data about respondents saying jobs are scarce or plentiful, was the most favorable since January 2001.

This measure closely correlates to the unemployment rate in the Labor Department’s employment report. Economists said it raised the possibility that the unemployment rate could drop further from a near 49-year low of 3.7 percent. The government will publish its October employment report on Friday.

“At the end of the day, it is the job market, or the security of having a job with a regular paycheck, that supports confidence and spending,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “So far, so good.”

Consumer confidence at multi-year highs bodes well for spending in the upcoming holiday season. More consumers planned to buy automobiles and houses over the next six months, but the share of those intending to purchase major appliances slipped.

The dollar was near a 2 1/2-month high against a basket of currencies, while stocks on Wall Street were higher. U.S. Treasury yields rose.

HOUSING DEMAND SOFTENING

The economy grew at a 3.5 percent annualized rate in the third quarter and is considered on course to achieve the Trump administration’s target of 3.0 percent annual growth this year.

Growth has been spurred by a $1.5 trillion tax cut. Economists estimate the tax cut stimulus peaked in the third quarter and expect growth to gradually slow from the second half of 2019, restrained in part by higher interest rates.

The Federal Reserve has increased borrowing costs three times this year and in September removed a reference to monetary policy remaining “accommodative” from its policy statement. The U.S. central bank is expected raise rates gain in December.

Higher borrowing costs have cooled housing demand; sales and homebuilding declined in September.

A separate report on Tuesday showed the S&P CoreLogic Case-Shiller composite home price index of 20 U.S. metropolitan areas rose 5.5 percent in August from a year ago after increasing 5.9 percent in July. Growth in house prices has slowed from as high as 6.8 percent in March. Prices had been boosted by a shortage of properties on the market, but now mortgage rates have risen to seven-year highs.

“The sharp gain in mortgage rates thus far in 2018 continues to weigh on home sales as well as home prices,” said Brent Campbell, an economist at Moody’s Analytics in West Chester, Pennsylvania.

“With the Fed continuing to tighten monetary policy through the rest of 2018 and into 2019, mortgage rates are likely to rise, even more, resulting in less housing demand and modest house price growth in 2019.”

(Reporting By Lucia Mutikani; Editing by David Gregorio)

No vacancy: Housing crisis dogs Florida Keys months after Irma

Terri Metter, 50, and her Boston Terrier Nikki stand in front of a debris-filled canal in the RV park where she has been living in a FEMA trailer since November 2017, in Marathon, Florida, U.S., June 10, 2018. REUTERS/Zach Fagenson

By Zachary Fagenson

MARATHON, Fla. (Reuters) – For eight months Terri Metter has made her home in a government trailer parked along a debris-clogged canal in the Florida Keys and she considers herself lucky since Hurricane Irma forced many of her former neighbors to move off the once-idyllic archipelago.

Terri Metter and her Boston Terrier Nikki overlook what's left of destroyed trailers that fill a canal near a trailer park in Marathon, Florida, U.S., June 10, 2018. REUTERS/Zach Fagenson

Terri Metter and her Boston Terrier Nikki overlook what’s left of destroyed trailers that fill a canal near a trailer park in Marathon, Florida, U.S., June 10, 2018. REUTERS/Zach Fagenson

Metter has been bunked down in temporary housing supplied by the Federal Emergency Management Agency (FEMA) since November, after the Category 4 storm, with winds of up to 130 miles per hour (209 kph), strafed nearby Cudjoe Key on Sept. 10, 2017.

“A few people are finding housing on boats or they’re sleeping on couches, but a lot of people who work here can’t afford to stay and it’s a sad thing,” said the 50-year-old bookkeeper and bartender in Marathon, a city made up of 13 tiny islands about 50 miles east of Key West and 115 miles southwest of Miami.

Though much of mainland Florida escaped major damage, the Keys were devastated. The resort islands, stretching southwest from the tip of the Florida Peninsula into the Gulf of Mexico, are connected by a single, narrow highway that runs along a series of bridges and causeways.

The hurricane destroyed almost 1,200 homes in Monroe County, which includes the Keys and parts of the mainland that are almost entirely in Everglades National Park. That figure excludes trailers, a popular form of housing in the Keys, and homes damaged so severely that owners simply abandoned them.

Overall, 84 people in Florida died as a result of Irma, and the region, including other southeastern states, suffered an estimated $50 billion worth of damage, according to the National Hurricane Center.

As the hurricane approached, Metter evacuated and stayed with family in Michigan, but returned a month later to see the devastation in her neighborhood, where only eight of 50 trailers and homes remained intact. Rotting debris and seaweed filled her home, and she decided rebuilding was the only option.

Others had no choice but to live elsewhere. A lack of affordable, safe housing forced many of those who work in the Keys’ numerous restaurants and hotels to move to the mainland, officials said.

“Folks are living in unlawful spaces that don’t meet code, unsafe spaces, and they have been doing it because they want to be there and it’s the only way they can afford to be there,” said Jaimie Ross, president of the Florida Housing Coalition.

Monroe County Commissioner George Neugent expects many who lost their homes or suffered major damage to never come back. In 2016, the county’s population totaled about 79,000, almost all of them residing in the Keys, according to the U.S. Census Bureau.

“I’m estimating between 15 and 25 percent of our population is going to be lost and we lose more and more every day,” he said.

To put a dent in the housing deficit, Monroe County has teamed with private developers and donors on a plan to build homes capable of withstanding 200 mile-per-hour winds that are affordable for hospitality workers. Florida Governor Rick Scott and state lawmakers are also weighing a proposal for 1,300 new housing units for workers in the Keys.

The construction cannot come fast enough as the region braces for what this year’s hurricane season, which began June 1, will bring to the region.

The National Oceanic and Atmospheric Administration’s Climate Prediction Center expects the season to be a near-normal to above-normal season in terms of the number and intensity of storms.

The long recovery from Irma and the previous hurricane season has raised doubts with many, said Neil Curran, 45, a contractor and waiter who lost the 42-foot sailboat where he lived off Key West during last year’s storm.

While Curran is renting a new boat after bouncing around more than a dozen FEMA-funded hotel rooms, he said he knew of at least two dozen friends who have left the islands, and more on the cusp of leaving.

“Over the summer, we’re going to see a pretty big mass exodus,” he said.

(Reporting by Zachary Fagenson; editing by Ben Klayman, Frank McGurty and G Crosse)

Florida communities scramble to help displaced Puerto Ricans

Puerto Rican Debora Oquendo, 43, makes a phone call to a doctor for her 10-month-old daughter in a hotel room where she lives, in Orlando, Florida, U.S., December 4, 2017.

By Robin Respaut and Alvin Baez

KISSIMMEE, Florida (Reuters) – At Leslie Campbell’s office in the central Florida city of St. Cloud, the phone will not stop ringing.

Director of special programs for the Osceola County School District, Campbell helps enroll students fleeing storm-ravaged Puerto Rico.

Her job has been a busy one. Since hurricanes Irma and Maria devastated the Caribbean in September, over 2,400 new students have arrived in the district. That is enough to fill more than two typical-sized elementary schools. Dozens more youngsters show up weekly.

“We’re just inundated, from the minute we come in, to the minute we leave,” said Campbell, who helps families obtain transportation, meals and clothing.

Across the country, state and local officials are scrambling to manage an influx of Puerto Ricans, a migration that is impacting education budgets, housing, demographics and voter rolls in communities where these newcomers are landing.

Florida, already home to more than 1 million Puerto Ricans, is on the front lines. About 300,000 island residents have arrived in the state since early October, according to Florida’s Division of Emergency Management. The influx is nearly 2.5 times the size of the Mariel boat lift that brought 125,000 Cubans ashore in 1980.

Some Puerto Rican arrivals have passed through Florida on their way to New York, Pennsylvania, Texas and other states. Some may eventually return home. But many will not. The island is still reeling months after Hurricane Maria, a Category 5 storm, wreaked catastrophic damage to homes, businesses and infrastructure. Nearly 40 percent of residents still lack electricity. The economy has been devastated.

For Florida, the inflow of Puerto Ricans is altering public budgets and perhaps the political calculus in a state that President Donald Trump won by a slim margin in 2016. Puerto Ricans, who are U.S. citizens, are on pace to overtake Cuban-Americans within a few years as the state’s largest Latino voting bloc. Many criticized the Trump administration’s hurricane response as inadequate.

Politicians are taking notice. Florida’s Republican Governor Rick Scott has reached out to these newcomers. The state has opened reception centers where Puerto Ricans can apply for food stamps and Medicaid, the federal healthcare system for the poor. Scott has asked for an additional $100 million in state spending to house arriving families, many of whom are doubled up with relatives or packed into aging hotels.

Washington, meanwhile, continues to wrestle with the question of how to help Puerto Rico, having long rejected the idea of a federal bailout for the insolvent U.S. territory, which filed for a form of bankruptcy in May. Congress appears unlikely to grant anywhere near the $94.4 billion the territory’s leaders estimate it would take to rebuild.

As federal lawmakers dither, state and local taxpayers are watching the tab to resettle islanders grow.

Statewide, more than 11,200 students from Puerto Rico and the U.S. Virgin Island have enrolled in Florida public schools since the storms, according to the governor’s office. Most arrived after a deadline that determines state funding based on enrollment, resulting in an estimated loss for local districts of $42 million during the 2017 fall semester, a Reuters analysis shows.

Requests for public assistance climbed by 5 percent in Florida during the last three months of 2017, compared to the same period in 2016, according to state figures. Federal food stamp issuance, driven by victims of hurricanes Irma and Maria, jumped 24 percent or $294 million over the same period.

The state is also seeing more extremely ill patients from Puerto Rico.

Keyshla Betancourt Irizarry, 22, came to Florida in October on a humanitarian flight with her mother and brother. Suffering with the blood cancer Hodgkin’s Lymphoma, Betancourt was deteriorating fast on an island whose healthcare system is in tatters.

Now living in Orlando, she is on Florida’s Medicaid plan, which pays for her radiation treatments. The family has no plans to return to the territory.

“I cannot get the best medical help in Puerto Rico, and it has become even worse after Hurricane Maria,” Betancourt said.

Medicaid patients cost the federal government more on the mainland than in Puerto Rico, because Washington caps Medicaid funding sent to its territories. Such costs will only grow if Congress fails to stabilize Puerto Rico, said Juan Hernandez Mayoral, former director of the Puerto Rico Federal Affairs Administration, which represents the territory in Washington.

“You can pay for it in the 50 states or you can pay much less in Puerto Rico,” Hernandez said. “The hurricane has sped up the migration.”

A Reuters photo essay (http://reut.rs/2AQmzh6) captures images of displaced Puerto Ricans in Florida.

CLASSROOM SQUEEZE

Central Florida was one of the country’s fastest-growing regions even before the disasters as Puerto Ricans fleeing a sputtering economy flocked here for jobs in the booming tourist trade. An estimated 360,000 have settled in the area, the largest concentration in Florida.

The Osceola County school district has enrolled thousands of new students in recent years, including nearly 2,700 in 2015-2016 alone. To accommodate them, the district hired more bilingual teachers, converted offices into classrooms, added portable units and built a new middle school. In 2016, voters approved a half-cent sales tax to provide more funding.

Hurricane Maria has compounded the urgency.

“We have students coming without clothes or records. Some are exhibiting symptoms of post-traumatic stress,” said Kelvin Soto, an Osceola County school board member. “We’re handling it well, but it’s straining our resources.”

Recent arrivals include Felix Martell and his five-year-old daughter Eliany, who settled in Ocala, Florida, about 80 miles (129 kilometers) northwest of Orlando. Martell is the sole caretaker for the child after his wife died two years ago. He worried Eliany’s education would suffer in Puerto Rico due to lengthy school closures following Maria.

Father and daughter are now living in a run-down hotel paid for by the Federal Emergency Management Agency. Martell has yet to find a job. Still, he said there is no turning back.

“The girl has learned more in three weeks of school here than in the entire semester on the island,” he said. “I am concentrating on her future.”

TIGHT HOUSING

A shortage of affordable housing is acute for Puerto Rican emigres.

The Community Hope Center, a nonprofit in Kissimmee, Florida, south of Orlando, has been besieged with requests for shelter, according to Rev. Mary Downey, the executive director.

“People are calling us and saying, ‘we’re homeless now,'” Downey said. “It’s awful. There is simply not enough housing to meet the needs.”

Central Florida housing is a bargain compared to places such as New York or San Francisco, but it is beyond the reach of many newcomers lacking savings or jobs. Homes under $200,000 sell quickly, and Orlando-area rents are growing faster than the national average. Local officials say the situation could worsen as families that are doubling and tripling up eventually seek their own places.

Deborah Oquendo Fuentes, 43, and her 11-month-old baby girl Genesis Rivera share a FEMA-paid hotel room in Orlando after fleeing Puerto Rico in October. Oquendo, who found a part-time job that pays minimum wage, fears they will be homeless when that assistance runs out this month.

“I don’t have enough money to move to another place,” Oquendo said. “I feel alone, and I’m afraid.”

(Reporting by Robin Respaut and Alvin Baez; Editing by Marla Dickerson)

Israel approves building plans for 31 settler homes in West Bank’s Hebron

Israeli soldiers stand at a military camp in the West Bank city of Hebron October 17, 2017. REUTERS/Mussa Qawasma

JERUSALEM (Reuters) – Israel on Monday approved building plans for 31 settler homes in Hebron in the West Bank, a spokeswoman said, a first such move in the Israeli-occupied area for some 15 years.

Prime Minister Benjamin Netanyahu has felt increased pressure for settlement expansion from the rightist flank of his coalition, though construction is not imminent as a bureaucratic process must still run its course.

His government has made numerous announcements of settlement building recently, angering Palestinians seeking a state on land Israel captured in a 1967 war but no longer eliciting serious U.S. criticism with President Donald Trump in the White House.

Still, settlement advocates say that despite a string of announcements for construction of thousands of settler homes in the West Bank, only a fraction might be built eventually.

Hebron is the largest Palestinian city in the occupied West Bank with a population of some 216,000. About 1,000 Israeli settlers live in the heart of the city, which for decades has been a focus of religious friction between Muslims and Jews.

Israeli anti-settlement watchdog Peace Now detailed the project’s plans in an area of Hebron where the settlers live and its web site showed a graphic of what the prospective four-storey, stone-clad apartment block would look like.

It said that the last time settler homes were built in this area was in 2002.

Hadar Horen, a spokeswoman for the Israeli body that runs civilian affairs in the West Bank, could not confirm the details issued by Peace Now and said the planning committee decision would be published later.

(Writing by Ori Lewis; editing by Mark Heinrich)

U.S. sues Los Angeles over inadequate housing for disabled

A view of downtown Los Angeles, California, U.S. February 23, 2017. REUTERS/Mike Blake

By Jonathan Stempel

(Reuters) – The United States has joined a lawsuit accusing Los Angeles of failing to develop affordable housing for disabled people, despite accepting millions of dollars of federal funds for that purpose, the Department of Justice said on Wednesday.

The decision to intervene adds legal firepower to a whistleblower case brought by Los Angeles wheelchair user Mei Ling, and signals the government’s belief it has a greater chance of success than typical of False Claims Act lawsuits.

It also follows Los Angeles’ agreement last August to settle litigation by several advocacy groups by spending at least $200 million over a decade to provide 4,000 affordable apartments for people with disabilities.

A year earlier, the second most populous U.S. city committed to spending $1.3 billion over 30 years to fix broken sidewalks that critics called nightmares for wheelchair users.

A spokesman for Democratic City Attorney Mike Feuer, Rob Wilcox, in a statement said Los Angeles would “vigorously fight” the lawsuit, which threatens to “divert tens of millions more from L.A. taxpayers to the federal treasury – without housing a single person. This abuse of power cannot stand.”

The lawsuit accused Los Angeles of falsely certifying its compliance with the Fair Housing Act and other laws protecting the disabled, such as by setting aside 7 percent of multifamily units for people with impaired mobility, sight or hearing.

Such compliance was a condition for the city of 4 million to receive U.S. Department of Housing and Urban Development funds.

But the lawsuit said none of the HUD-funded multifamily housing in Los Angeles supported by CRA/LA, a city agency once called the Community Redevelopment Agency, had enough accessible units.

“Denying people with disabilities equal access to public housing deprives one of the most disadvantaged groups in society of fair housing opportunities,” said Acting Assistant Attorney General Chad Readler of the Justice Department’s civil division.

The CRA/LA did not respond to requests for comment.

Ling’s lawyer, Scott Moore, said his client once spent three years in a homeless shelter because she could not find accessible housing, and even now cannot use her bathtub normally.

“This is monumental for my client,” Moore said in an interview. “If cities think they can take the money, and only then try to make amends, then the False Claims Act has no meaning.”

False Claims Act lawsuits let private whistleblowers sue on the government’s behalf, and share in recoveries.

The nonprofit Fair Housing Council of San Fernando Valley also sued on Ling’s behalf.

The case is U.S. ex rel Ling et al v City of Los Angeles et al, U.S. District Court, Central District of California, No. 11-00974.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio, Bernard Orr and Jonathan Oatis)

U.S. housing starts unexpectedly fall for second straight month

FILE PHOTO -- Construction workers build a single family home in San Diego, California, U.S. on February 15, 2017. REUTERS/Mike Blake/File Photo

WASHINGTON – U.S. homebuilding unexpectedly fell in April amid a persistent decline in the construction of multi-family housing units and a modest rebound in single-family projects, pointing to a slowdown in the housing market recovery.

Housing starts dropped 2.6 percent to a seasonally adjusted annual rate of 1.17 million units, the Commerce Department said on Tuesday. That was the lowest level since last November and followed a downwardly revised rate of 1.20 million units in March.

Economists polled by Reuters had forecast groundbreaking activity rising to a rate of 1.26 million units last month from a previously reported rate of 1.22 million units in March.

Homebuilding increased 0.7 percent on a year-on-year basis.

Single-family homebuilding, which accounts for the largest share of the residential housing market, rebounded 0.4 percent to a pace of 835,000 units last month. That left the bulk of the 5.1 percent decline in March intact.

Single-family starts surged 19.4 percent in the Midwest and advanced 9.1 percent in the West. They fell 3.4 percent in the South and tumbled 29.2 percent in the Northeast.

Some of the drop in starts, especially in the Northeast, could be weather-related after a snowstorm lashed the region in March. Demand for housing remains underpinned by a tightening labor market, characterized by an unemployment rate at a 10-year low of 4.4 percent.

A survey on Monday showed homebuilders’ confidence rose in May, with bullishness about current sales and over the next six months.

Last month, starts for the volatile multi-family housing segment dropped 9.2 percent to a pace of 337,000 units. Multi-family starts have declined for four straight months.

Building permits fell 2.5 percent, driven by a 4.5 percent drop percent in the single-family segment. Multi-family permits rose 1.4 percent.

((Reporting by Lucia Mutikani; Editing by Paul Simao))

U.S housing starts surge in December; jobless claims near 43-year low

A "For Rent" sign is posted outside a residential home in Carlsbad, California,

WASHINGTON (Reuters) – U.S. homebuilding rebounded more than expected in December as a strengthening economy boosts demand for rental housing.

Other data on Thursday showed the number of Americans filing for unemployment benefits unexpectedly falling last week to a near 43-year low, pointing to a further tightening in the labor market that should underpin economic growth this year.

Housing starts jumped 11.3 percent to a seasonally adjusted annual rate of 1.23 million units last month, the Commerce Department said. Economists polled by Reuters had forecast housing starts increasing to a 1.20 million-unit rate in December.

Groundbreaking on new housing projects increased 4.9 percent to 1.17 million in 2016. The housing market remains on solid ground even as mortgage rates have jumped above 4 percent. The tightening labor market is driving demand for multi-family housing, which has pushed up rents.

In a separate report, the Labor Department said initial claims for state unemployment benefits fell 15,000 to a seasonally adjusted 234,000 for the week ended Jan. 14. That was just shy of the 233,000 level touched in mid-November, which was the lowest since November 1973.

It was the 98th straight week that claims remained below

300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970, when the labor market was much smaller.

The four-week moving average of claims, considered a better

measure of labor market trends as it irons out week-to-week

volatility, fell 10,250 to 246,750 last week, the lowest level since November 1973. The labor market is considered to be at or near full employment, with the unemployment rate near a nine-year low of 4.7 percent.

U.S. financial markets moved slightly on the data.

Home building is expected to make a modest contribution to economic growth in the fourth quarter after being a drag on gross domestic product in the prior two periods.

A survey on Wednesday showed homebuilders’ confidence easing slightly in January, but remaining not far from levels last seen in July 2005. Construction remains constrained by shortages of lots and labor. Builders are hoping that the incoming Trump administration will streamline and reform regulations.

Republican Donald Trump, who will be sworn in as president on Friday, has pledged to reduce regulations, among other policy initiatives.

Last month, single-family home building, which accounts for

the largest share of the residential housing market, fell 4.0

percent to a 795,000-unit pace. Starts for the volatile multi-family homes segment soared 57.3 percent to a 431,000-unit pace.

Permits for future home construction slipped 0.2 percent to a 1.21 million-rate last month as approvals for the multi-family segment fell 9.0 percent. However, permits for single-family homes construction rose 4.7 percent.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

Egypt builds new homes to replace crumbling slums

A man shows cracks in walls at his home in Al-Assal, one of the oldest slums in the Shubra district of Cairo, Egypt June 1, 2016.

By Mahmoud Mourad

CAIRO (Reuters) – Bayada Mohamed has left her old slum on a crumbling cliffside and moved into a new flat in a Cairo residential complex, making her among the first to benefit from a government plan to rehouse residents of Egypt’s most dangerous slums.

Like other residents of the Doueyka slum where homes have no running water and a rockslide killed about 130 people in 2008, Bayada’s family has been offered a rental flat in the recently-opened Tahiya Misr development in the Moqattam area, as pictured in this photo essay – http://reut.rs/21hyvjc.

“Where was I and where am I now?” exclaimed Bayada, sitting in her new flat surrounded by new furniture.

There are 351 slums deemed unsafe in Egypt, most of them in the sprawling capital where the poorest have built ramshackle homes that lack basic amenities such as mains sewage and water. Some 850,000 people are believed to live in dangerous slums.

Building collapses are common in Cairo, home to some 20 million people, and the shortage of affordable housing is so acute that 1.5 to 2 million are believed to live in tombs in an area known as the City of the Dead.

Egyptian President Abdel Fattah al-Sisi promised last month to move all those living in unsafe slums to new flats over the next three years in an ambitious project expected to cost about 14 billion Egyptian pounds ($1.58 billion).

The first two phases of Tahya Misr, which is dedicated to rehousing slumdwellers, were completed in 11 months and comprise 12,000 flats. The third phase opens in 2017, bringing the number of flats to 20,000. The completed complex will house 100,000.

Government efforts to eradicate the worst slums come as Sisi faces growing pressure to revive the economy and avoid the kind of protests that toppled two presidents in the last five years.

But rising prices are eroding living standards in a country where tens of millions rely on state-subsidised food and complicating efforts to rid Egypt of its slums.

MORE SLUMS

Not all slum residents have been as enthusiastic as Bayada about leaving behind their communities and seeing their old homes demolished.

“Most of the residents of these areas wish to be in areas close to where they are actually living now and this for us is a problem,” Sisi said at the recent opening of a low-income housing project in the Madinat Badr area of Cairo.

While it evacuates dangerous areas, the government is upgrading other informal settlements, connecting them to basic services and paving roads.

But many residents are disappointed with the upgrades.

Magdi Mahmoud, a factory worker who lives with his family in the informal settlement of Abu Dahruj in southern Cairo, said the work should have stretched to schools and clinics.

“The improvements are not bad but the important thing is people look after them,” he said.

And on Cairo’s dusty and desolate fringes, the city’s poorest are building more illegal homes on land they do not own.

As the Tahya Misr development nears completion, Ahmed, a vegetable seller, is working with neighbors to complete a new slum near Arab al Barawi, an older informal settlement in southern Cairo, after struggling to afford the rent there.

His new house is built with scavenged materials.

“Thank God, today he blessed us with a bit of wood that was left on the street … to roof my house,” Ahmed said.

(Writing by Lin Noueihed; Editing by Andrew Heavens)

Stubborn Shanghai residents hold a line drawn in rubble

A night view of the old houses surrounded by new apartment buildings at Guangfuli neighbourhood in Shanghai, China, April 10,

By Pete Sweeney

SHANGHAI (Reuters) – In a corner of Shanghai, surrounded by a cement wall, lies one of the world’s most valuable fields of debris and garbage.

On paper, the Guangfuli neighborhood is a real estate investor’s dream: a plot in the middle of one of the world’s most expensive and fast-rising property markets.

But the reality is more like a developer’s nightmare, thanks to hundreds of people living there who have refused to budge from their ramshackle homes for nearly 16 years as the local authority sought to clear the land for new construction.

The stalemate highlights a fundamental and unresolved problem in China’s half-liberalized property regime: who owns the land?

Even as the fields around Guangfuli have bloomed million-dollar condominium towers, the residents live a scrappy existence. The plot is ramshackle and looks bombed out. Residents grow vegetables in Styrofoam boxes wedged between rubble and refuse. They freeze in the winter and boil in the summer as many windows lack glass and the walls are perforated with holes.

Most houses have the Chinese character for “tear down” spray painted on them by demolition teams, although the paint has faded as the standoff between the residents and the developer dragged on.

Long-time resident Luo Baocheng lives with his brother and family in a small three-story apartment building, which he said he inherited from his mother.

Luo said the property developer, Xinhu Zhongbao, refuses to pay the 4.2 million yuan ($649,150) he says the house is worth.

“They told me, I don’t have a property right certificate,” he said. “I’ve lived here 32 years, does that or does that not mean it’s my property?”

Local real estate agents say average prices in the area around Guangfuli are now closing on $12,000 per meter ($1,115 per sq ft). As Shanghai property prices accelerate – they rose 25 percent in March from a year earlier – the conflict over Guangfuli has intensified.

The residents said the developer has offered to swap their homes for new apartments in the distant Jiading district, but the catch is that they would have to pay.

Luo said he was asked to fork out 1.18 million yuan ($182,380) for two apartments for him and his brother; he wanted four apartments and balked at the price tag.

“Where are we going to find 1.18 million yuan? I’m retired and my brother is laid off,” he said.

The local authority, the Putuo district government, said in response to faxed questions that it wanted to demolish the neighborhood and “make residents’ lives better” by relocating them.

The developer, Xinhu Zhongbao, did not answer repeated calls requesting comment.

WHERE ARE YOU GOING?

As a rule, the average Chinese person’s wealth is held in the form of cash and real estate. But real estate wealth in China rests on a tenuous definition of ownership, particularly so when it comes to the old houses granted to people by their work units in the days before a property market existed as such.

When China implemented property rights, these people were allowed to continue using the houses they lived in, with the caveat that the local government could relocate them later, with some sort of compensation.

But widespread dissatisfaction with the compensation offered by local governments led to protests by residents and engendered the “nail house” phenomenon: residents who refuse to accept the buyout offer and stay put, boarding up their homes to fend off attempts to remove them.

The result has often been architectural absurdities: small houses standing in the midst of freeways, pedestrian malls, perched on concrete islands in the middle of pits excavated for underground parking lots.

But time, the great bulldozer, has seen most “nail house” residents in China bought out, pushed out, or, given that many are elderly, carried out.

(Additional reporting by the Shanghai Newsroom; Editing by Neil Fullick)