Danke Apartment: The 'broken eggshell' that left young Chinese homeless:
On a cold winter's evening recently, Beijing resident Xiaoyue and his wife returned to their rented flat after dinner - only to find another couple standing at their door, changing the locks.
The man and woman were their landlords. They wanted Xiaoyue and his wife out of their apartment immediately, because they hadn't paid their rent for months.
Xiaoyue was stunned. "I was completely unprepared for this," he told the BBC in a recent interview. The 28-year-old said he had been paying his rent in huge lump sums, sometimes for six months at a go.
So where had his money gone?
Xiaoyue would soon find out that he and his landlords were among the many victims of a housing controversy that has exposed the vulnerability of China's young urban workers and become a cautionary tale of the country's exuberant tech start-up scene.
It has reportedly left many young Chinese - potentially thousands - homeless. Some say they have been forced out onto the streets in the middle of a freezing winter, and one even reportedly killed himself. Many homeowners also say they are owed massive amounts of unpaid rent.
[...] At the heart of the controversy is Chinese housing app Danke Apartment, once considered one of the country's most promising start-ups.
When it first launched in 2015, it was an instant hit with China's fresh graduates and young professionals moving to big cities, offering them affordable housing in places such as Shanghai, Beijing and Guangzhou where property prices can be sky-high.
The business model for Danke, which means "eggshell" in Chinese, is simple - it rents flats from landlords long-term, renovates them, then sublets the flats or individual rooms as single units to tenants at a relatively affordable rate. It has sometimes been described as WeWork for residential property.
(Score: 2) by NateMich on Thursday January 14 2021, @01:10PM (16 children)
Aparently China doesn't have any laws about evictions, or any sort of requirements that the landlord has to notify you at you at any point?
Sounds like a terrible situation. In fact, it seems like in that situation you would for sure want to know your landlord and not be going through some stupid middleman.
(Score: 3, Interesting) by Anonymous Coward on Thursday January 14 2021, @01:22PM
Couldn't resist, followed the link and read the whole BBC story.
Sounds like a lot of startups, Danke grew fast, took in a lot of rent money...and now has cashflow problems and isn't paying landlords. Ponzi anyone?
Meanwhile, the tenants were sucked in by relatively low rent deals if they paid up front. And they were also sucked in because, hey, it's on my phone, it must be good. As part of the deal Danke also worked out loans to make it possible for some tenants to pay rent in advance, which confuses things further.
(Score: 0) by Anonymous Coward on Thursday January 14 2021, @04:42PM (10 children)
Sounds wonderdul to me. Landlord owns the property, they should have every right to do as they please. Don't like it? Buy your own property peasant.
(Score: 0) by Anonymous Coward on Thursday January 14 2021, @04:53PM (9 children)
So if there's a mix-up you freeze dead in the winter? Lovely idea, Mr. Koch.
(Score: 3, Insightful) by hemocyanin on Thursday January 14 2021, @05:14PM (8 children)
Ironically, in Communist China, it appears there is private ownership of real property, a landlord class, and unlike the Capitalist West, laissez-faire eviction.
(Score: 3, Informative) by helel on Thursday January 14 2021, @07:58PM (6 children)
China isn't communist. There's a variety of terms for what it is but the one I've heard most often is state capitalism [wikipedia.org].
I know I know, sorry for ruining your joke :c
(Score: 5, Interesting) by knarf on Thursday January 14 2021, @11:15PM (4 children)
China is communist, the point is that communism isn't what you expect it to be. In short, the contents of the package do not correspond to the promise on the label. China is an evolved communist state, it is what you can get when you allow a ruling class to shape society according to their plans. In China those plans were steered in a state-directed form of market capitalism under Deng Xiao Ping, in the Soviet Union the party tried to keep economic activity wholly under state control, on Cuba the party did the same and was kept afloat by support from the Soviet Union. Once that support disappeared they have been hobbling on, implementing some small changes to allow people to grow and sell food to combat food shortages, etc. The core of the communist doctrine, state control, remains in place in all cases. Business in China stands and falls by "grace" of the party, companies with more than a certain (low) number of employees must allow party control, etc.
The reason why things end up this way is that the premise of communism is faulty, the "by each according to his means, to each according to his needs" fails because it removes the incentive to be productive from those who prefer to concentrate on the "needs" part of the equation and the people who get to decide over the means and needs are not impartial judges. Communism works in ant colonies, it may work among termites and it mostly works for bees. Humans did not evolve to live in large-scale communes, they separate folk into "friends and family" and "the rest". The means/needs equation works in a family, it can work in an extended family and has a chance of success in a small village with fewer than ~150 people, i.e. one where everybody really knows everybody. It will not work between two villages, let alone in a country.
(Score: 5, Insightful) by helel on Thursday January 14 2021, @11:39PM
China is an "evolved communist state" in the same sense that the US is an "evolved monarchy." That is to say there are threads of history the connect the present to the past and you can trace out how communism influenced modern China or how the US molded the presidency after a monarch but the current economic and political situation in both countries is very different than that past. Hence why the people who study these things refer to China as state capitalism, not communism, and the US as a representative democracy, not a monarchy.
(Score: 3, Interesting) by unauthorized on Thursday January 14 2021, @11:59PM
As an obvious counter-example, the Aragonese commune was literally a stateless communist society which didn't have a state to exhibit any level of state control.
(Score: 3, Informative) by hendrikboom on Friday January 15 2021, @05:17AM
Ant colonies work the way they do because the males are haploid. The result is that a female bee is genetically more similar to her sisters than to her mother or children. As a result the entire colony directs itself to get the mother to produce more children, using the same male's semen. For the sisters, it's the most effective way of reproducing themselves.
The mother is, of course, the one called by us the "queen". Folklore considers her to be the ruler, but she is in fact the baby-producing slave of the colony.
-- hendrik
(Score: 1, Interesting) by Anonymous Coward on Friday January 15 2021, @05:40AM
(Score: 2, Interesting) by khallow on Friday January 15 2021, @03:16AM
That's not much of a distinction since the common implementation of communism in the 20th century was via state capitalism.
(Score: 0) by Anonymous Coward on Thursday January 14 2021, @10:26PM
As was stated, China isn't communist to any appreciable degree at this point. What's more, nobody owns land over there other than the government, it's all leased. It remains to be seen what will happen as those leases start to expire, but the whole business that people own the property more over there than over here is laughable.
(Score: 0) by Anonymous Coward on Thursday January 14 2021, @04:50PM (1 child)
Because dictators want the power to move or boot out citizens at will.
(Score: 0) by Anonymous Coward on Friday January 15 2021, @03:03AM
Nah, they will never boot citizens out.
Why boot out citizens when you can just shuffle them into internment & concentration camps to harvest organs, run experiments, peddle sex trade, forced labor, etc. Waste is a big no-no in Chinese culture.
As per TFA, its the homeowners changing the locks here because the middle-man hasn't been passing on the rent that was collected, not the state.
(Score: 3, Insightful) by ikanreed on Thursday January 14 2021, @05:19PM
Here's the thing. Up until recently, homes were owned by the state and "sold" to people for an (approximate) lifetime duration, to be returned to the state afterwards. It's only fairly recently that China has reformed to allow landlords and perpetual property ownership as we understand the term. It's one of those "Oh yeah, 20 years ago they were literally communist instead of capitalist but with a totalitarian government" things.
Having laws about how to properly treat renters comes from a reaction to the abuses landlords sometimes get up to. Call it inexperience.
(Score: 4, Insightful) by sjames on Thursday January 14 2021, @07:22PM
It's a little more complex. Apparently Danke would lease properties, sub-divide the space and then sublet to their clients. So it's kinda like if you rent a room from somebody and that person pockets your rent and doesn't pay the apartment complex their rent. Suddenly you're getting kicked out with no warning.
I have seen somewhat analogous cases on the local news where the landlord didn't pay the utility bills and renters suddenly (from their perspective) had no water, gas, or electric.
(Score: 0, Insightful) by Anonymous Coward on Thursday January 14 2021, @01:14PM (9 children)
Why would you use an app as your landlord? Or pay lump sums as a renter? Sometimes, it's hard to feel bad for people who get scammed due to being imprudent.
(Score: 1, Insightful) by Anonymous Coward on Thursday January 14 2021, @01:37PM (6 children)
> Why would you use an app as your landlord?
Here's a couple of reasons, feel free to add more--
Because you are a rural hick, new in the big city and hard pressed to find anyplace to live?
Because it's easy and hey, there's an app for everything else, why not rent?
(Score: 0) by Anonymous Coward on Thursday January 14 2021, @02:02PM (3 children)
Chinese should be and I think mostly are suspicious about ripoffs. They know their entire country is a sea of sometimes deadly fraud. (Remember the poisoned infant formula?) Maybe these people are mostly young and stupid.
(Score: 1, Interesting) by Anonymous Coward on Thursday January 14 2021, @02:40PM (1 child)
Or brainwashed? "Greatest country on Earth", 'We're No. 1 baby"... you get the idea.
(Score: 4, Touché) by gawdonblue on Thursday January 14 2021, @11:09PM
Yep, and every day at school they pledge allegiance to the flag.
Weird, hey.
(Score: 0) by Anonymous Coward on Friday January 15 2021, @03:09AM
Yes, they're definitely naive. Partly due to the state propaganda that their government is infallible and what they have is utopian and any criticism especially from the West is horseshit. Imagine if you're being fed this propaganda since infancy, you'll grow up with a false sense of security.
They're learning the hard way that reality is full of people that will exploit them and their shiny government aint gonna do squat about it. However this is probably still a small slice of the population; a lot of the younger gens are still patriotically lapping off that bullshit propaganda of their great government & system.
(Score: 3, Interesting) by fakefuck39 on Thursday January 14 2021, @04:17PM (1 child)
Lower price. This is very common in South Korea as well. You pay 6 months in advance in a big lump sum, get a huge discount on the rent, and don't need to worry about credit checks and things like that because you paid many months upfront. In some cases, you don't get a discount - you pay over double the monthly amount, two years upfront. Then you get everything you paid back when you move out (landlords make money by investing the huge sum you gave them for 2 years).
But yeah, those rural hicks, amirite lol? Those dumb rural hicks can't wrap their head around the world being a big place, and there existing many different business model.
(Score: 2) by DannyB on Thursday January 14 2021, @08:54PM
That is true. It would also suggest that they would not only use an app as their landlord, but also use an app as their girlfriend.
The lower I set my standards the more accomplishments I have.
(Score: 4, Touché) by PiMuNu on Thursday January 14 2021, @04:11PM
> Why would you use an app as your landlord?
A lot of people use AirBnB to find long term rents.
(Score: 0) by Anonymous Coward on Friday January 15 2021, @02:30PM
The app is a clickbait red herring. Danke is the landlord, but they don't own the property they just lease it. The couple paid their rent but Danke didn't renew the lease, so the couple are getting kicked out. Essentially what we have is a ponzi scheme based on subrental agreements, and the original investors just cashed out.
(Score: 1, Funny) by Anonymous Coward on Thursday January 14 2021, @02:32PM (1 child)
Seems like these days when the Chinese aren't being locked out of their homes, they're being boarded in. I can't wait to see what else they can teach us.
(Score: 0) by Anonymous Coward on Friday January 15 2021, @03:11AM
They also get led to internment camps like the Uighurs or get disappeared into a hole somewhere like Jack Ma.
(Score: -1, Troll) by Anonymous Coward on Thursday January 14 2021, @03:53PM
I heard Rotten Egg Gas Could Guard Against Alzheimer's Disease [soylentnews.org]
(Score: 5, Insightful) by ledow on Friday January 15 2021, @08:22AM (1 child)
If you're a landlord, and your tenant hasn't paid, even if you have agents here's a tip from a business, personal, moral, ethical and legal point of view:
Speak to the tenant. By email, phone, in-person. Ask whether there's a reason, anything you can do to help.
Because of numerous reasons like this, but also just to be an actual, functioning business dealing with a customer, or a functioning human dealing with another human. Maybe they'll be belligerent. Maybe they'll fob you off. Maybe they'll give you a sob story. Or maybe you'll find out what's going on with your agent.
True story: Moved into a flat with my girlfriend-at-the-time. She'd been there over a year, had come from Europe and so didn't know much about UK law, etc. She's rented a place, I'd moved in with her later, she was paying rent just the same as she always had.
Had a knock on the door one night, a guy in football regalia. He said he was our landlord. We never dealt with the landlord direct, we always went through the agent that he'd hired. He checked out, he was polite, we let him in. He asked about the rent. We said "What about it?" He said "Have you paid it?" We said "Yes, of course we have!" He was very, very polite but said could we prove that. We dug out my girlfriend's bank statements and showed him - full rent, to the agents, every month for years.
He nodded. "Thought so".
They were conning him. They weren't passing on our rent. They'd been telling him that we'd been giving sob-stories to them and then passing on half-rents and skipping payments even though they were getting them in full without any hassle or sob stories at all (we were both in well-paid professional jobs).
He said "You'll get a phone call tomorrow, from the agents. They're going to terminate your rent agreement."
We looked a bit confused.
"You'll be dealing with me direct from now on, I'm going to sue them. I'm sorry to have disturbed you but I thought I'd better check your side of the story. We were nearly at the point we were going to evict you because of this. You did nothing wrong, this is the agency literally defrauding me. When you get that call, can you let me know, we'll set up bank payments and please tell me ANYTHING that you've asked them to do like fix things or anything like that that they haven't done and I'll get them done for you."
We paid him rent direct for another few years before we moved out to get a bigger place. He was lovely. He sued the company in question, and had our bank statements and sworn statements as evidence.
He usually worked abroad, so he could have easily just believed everything they'd said, evicted us, got that same agency to put someone else in there, and never known that it was the agency that was ripping him off.
But he didn't. He spoke directly to the tenant to find out what the problem was. And even he said "If you were struggling to pay, I'd rather know and get a regular half-rent, than no rent at all or a sporadic rent."
Talk to your business client.
(Score: 3, Insightful) by Anonymous Coward on Friday January 15 2021, @01:02PM
+1 Insightful (ran out of mod points).
> Talk to your business client.
Whenever there is anything that might be (or become) contentious, I call. Not email, not text, I use the telephone (sometimes picking a convenient time to call by email/text). The few times that I've not followed this advice have often led to trouble of one kind or another.
If working under a contract or PO, the other person to get to know is the purchasing agent or buyer. Often the engineers/managers inside big companies ignore their buyers and treat them as a service, but these are real people too and a brief talk with them can do wonders to bypass red tape. Just had another example of this a couple of months ago--talking to the buyer saved me from having a "Covid distress" 10% lopped off my quote (as was happening with a number of other suppliers to the same company).