Take a tour of this Chinese 'nail' neighborhood that's been in a stalemate with developers for the past 16 years

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China's housing in Guangfuli
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China's housing in Guangfuli
An old house is seen in front of new apartment buildings in Guangfuli neighbourhood, in Shanghai, China, April 18, 2016. REUTERS/Aly Song/File Photo
Bian Jianhua poses for pictures at his home at Guangfuli neighbourhood in Shanghai, China, April 1, 2016. Bian Jianhua, 48, lives with his mother in an around 20-square-meter house in Guangfuli. 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 neighbourhood 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. REUTERS/Aly Song 
A night view of the old houses surrounded by new apartment buildings at Guangfuli neighbourhood in Shanghai, China, April 10, 2016. REUTERS/Aly Song
A dog runs on the remains of old houses covered with a green net in Guangfuli neighbourhood in Shanghai China, April 18, 2016. 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 neighbourhood 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. REUTERS/Aly Song 
A man surnamed Zeng looks into the camera as he sits on his bed, in Guangfuli neighbourhood in Shanghai, China, April 18, 2016. Zeng, 89, lives alone and keeps all his belongings within reach on his bed as he has difficulty walking. 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 neighbourhood 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. REUTERS/Aly Song 
A vendor selling pork takes a nap at a half-demolished house at Guangfuli neighbourhood in Shanghai, China, March 24, 2016. 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 neighbourhood 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. REUTERS/Aly Song 
Li Guoqiang talks on his phone outside his house at Guangfuli neighbourhood, in Shanghai, China, April 1, 2016. Li, 38, is a deliveryman who rents a place at Guangfuli. 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 neighbourhood 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. REUTERS/Aly Song 
A woman surnamed Li stands inside the house she shares with her husband as pictures of her mother-in-law and father-in-law are seen on the wall, in the Guangfuli neighbourhood, in Shanghai, China, April 8, 2016. 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 neighbourhood 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. REUTERS/Aly Song 
Jiang Wei cooks dinner outside a six-square-meter house he rents with a friend, at Guangfuli neighbourhood in Shanghai, China, March 28, 2016. Jiang and his friend rent the house with a monthly rent of 450 yuan for two years. 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 neighbourhood 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. REUTERS/Aly Song 
A man shaves on the second floor of an old house in Guangfuli neighbourhood in Shanghai, China, April 1, 2016. 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 neighbourhood 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. REUTERS/Aly Song 
A man surnamed Xu, 50, walks past a house carrying the Chinese character "Chai", meaning "demolition", in Guangfuli neighbourhood, in Shanghai, China, April 8, 2016. Xu's whole family used to live under the same roof together in Guangfuli. 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 neighbourhood 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. REUTERS/Aly Song
A man sits in an alley in Guangfuli neighbourhood in Shanghai, China, March 24, 2016. 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 neighbourhood 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. REUTERS/Aly Song 
Electric wires hang above a demolished old house at Guangfuli neighbourhood, in Shanghai, China, April 19, 2016. 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 neighbourhood 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. REUTERS/Aly Song 
A man walks between houses at Guangfuli neighbourhood in Shanghai, China, April 19, 2016. 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 neighbourhood 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. REUTERS/Aly Song 
A boy rides a tricycle in between semi demolished houses in Guangfuli neighbourhood, in Shanghai, China, March 28, 2016. 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 neighbourhood 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. REUTERS/Aly Song 
Yueyue is held by her grandfather in an empty area outside their house at Guangfuli neighbourhood, in Shanghai, China, April 1, 2016. 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 neighbourhood 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. REUTERS/Aly Song 
Tao Weiren sits in front of his two-story house in Guangfuli neighbourhood in Shanghai, China, March 24, 2016. 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 neighbourhood 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. REUTERS/Aly Song 
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Shanghai's Guangfuli neighborhood has been in a stalemate for the past 16 years.

The area is centrally located in one of the world's most expensive real estate markets. Luxury condo towers have popped up all around the neighborhood. But hundreds of people living in Guangfuli refuse to move out of their homes and allow the area to be developed.

Their defiance has created what in China is referred to as a 'nail' neighborhood, a term that references the last stubborn nail that can't be pried from a piece of wood. The phenomenon is more common with single homes whose residents can't come to an agreement with the government or a developer, so the houses remain standing as construction proceeds around them.

According to Reuters, some residents of Guangfuli now live in squalid conditions, growing vegetables in styrofoam boxes and braving the elements, since many windows lack glass and the buildings are poorly insulated.

But many say the developer won't pay them a fair price, and are waiting it out until a better deal is reached.

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Disagreements between developers and residents in China are particularly difficult because the country hasn't always had a real estate market. "It used to be that you either got your housing from the government or your employer," Greg Stein, a professor at the University of Tennessee College of Law specializing in Chinese real estate law, tells Business Insider. "Housing was not a commodity."


Under Chinese law, residents can now own buildings or apartments, but the government still owns all the land. So it has the right to compensate residents for their homes and force them to move — or work with a developer to do so. (Similar eminent domain policies exist in the US as well).


Many homeowners have found the compensation they've been offered too low, and have refused to accept a deal. Bian Jianhua, 48, is one of those. He lives with his mother in a 20-square-meter house.


According to Reuters, the Putuo district government, the local authority in the area, says it wants to make residents' lives better by demolishing the neighborhood and moving them to new locations.


But because the housing stock originally given to workers was low-quality, Stein says, "even if they got compensation, the apartment is so lousy that you couldn't replace it for that money."


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Until the matter gets resolved, life in Guangfuli goes on. Here, a baby named Yueyue is held by her grandfather outside their house.

Some owners no longer live in their homes, but instead rent them out. Jiang Wei rents one such Guangfuli house with a friend. They pay a monthly rent of 450 yuan ($67) for six square meters. Here, Jiang Wei cooks dinner outside the house.

Li Guoqiang, a 38-year-old deliveryman, also rents a home in Guangfuli. In the image below, he talks on his phone outside his house. Though some residents of the 'nail' neighborhood have electricity, many do not. Developers often cut off utilities and access, Stein says.


The juxtaposition between the new high-rises that surround the Guangfuli neighborhood and the partially demolished buildings inside is stark.


According to Reuters, real estate agents estimate the average prices in the area around Guangfuli to be close to $1,115 per square ft. "In a lot of cities, the wealthier people want to move to the suburbs. Here, the wealthy people want to move downtown," Stein says of Shanghai.

That makes the Guangfuli neighborhood a very valuable piece of land to develop. But for now, it will likely remain in a standoff.

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