Waiting for the Notice: Tenants in Limbo, and a Rental Company at a Loss

"Wishing myself luck finding a place to live"

Li Haoyu had lived in his new apartment for just two weeks when he learned he had to leave.

At noon on November 23, Li Haoyu came home to his shared apartment and found a notice taped to his bedroom door. It said his room was an "illegally partitioned rental posing public-security and fire hazards" that had to be "rectified" by November 29. It was signed by the Shuangjing Police Station and dated November 22.

There was no official seal on the notice, and none of the other tenants knew when, by whom, or how someone had gotten into the apartment to post it. But no one doubted it was real.

Two weeks earlier, Li Haoyu had signed a lease through Ziroom. Excluding the service fee, the rent was 2,060 yuan a month; with a one-month deposit and three months paid upfront, he had handed over more than 8,000 yuan. The room was barely 10 square meters, which worked out to more than 6 yuan per square meter per day — already in the range of cheaper office space inside the Third Ring Road.

The compound sits inside Beijing's eastern Third Ring Road. The buildings aren't new — five- and six-story blocks from the 1980s — but the location is good, less than three kilometers from the Guomao CBD. Li Haoyu and two other households shared the sixth floor: a corridor off the entrance, with three bedrooms running along it.

Li Haoyu said he had seen the news about the targeted crackdown and the clearing of group-rental apartments, but had never imagined it had anything to do with someone like him, earning more than 10,000 yuan a month. Only after the notice went up did he knock along the walls of his room and confirm that one of them was a partition added later — the original living room had been turned into the bedroom he was renting.

Ziroom is a rental brand that spun off from Lianjia in 2016. Unlike a conventional agency, Ziroom takes leases from landlords, renovates and furnishes the units, then rents them out room by room or whole. Tenants get add-on services — cleaning, maintenance, moving — plus a "house manager," essentially a customer-service contact for everyday problems. In exchange, Ziroom's rents tend to run ten to twenty percent above agencies that merely connect landlords with tenants. According to figures Ziroom gave QDaily, there are currently 400,000 active tenants in Beijing.

This time even the house manager had no idea where the problem lay. Li Haoyu reached the manager the day the notice appeared, and was told the manager needed to "ask the higher-ups." The next afternoon he got a firm answer: he could break the lease without penalty, but he had to move out on schedule.

Li Haoyu called 110. The officer who answered said this was a legal dispute and told him to consult the courts. Turned away, he went around asking friends what to do, and only then remembered he could call Ziroom's complaints hotline. Another day passed; on Saturday the 25th, customer service called back and offered one month's rent as compensation.

Going by Ziroom's public response, until the morning of the 25th company leadership still believed the people caught up in this were blue-collar service workers — the 5,000 cleaners, movers, and maintenance staff Ziroom employs directly. That day the company had already begun contacting affected employees to arrange housing and moving.

Lianjia chairman Zuo Hui wrote on Moments at the time: "Ziroom should provide this city's most ordinary workers with dignified, affordable housing. I hope anyone with suitable property will work with Ziroom to build blue-collar apartments." Ziroom CEO Xiong Lin then shared a screenshot of the post with the comment: "We'll try to get one building off the ground within a month!"

By that day, far more Ziroom tenants were facing eviction. One after another, tenants in the same situation surfaced on Zhihu, Weibo, and official accounts; some said their walls had been torn down without any warning. An article titled 《A Friend Who Earns 600,000 Yuan a Year Just Had His Home Smashed》 spread on Moments, describing a friend renting through Ziroom whom police told one morning to move out: "Given half a day to find a place … in the afternoon, before his things were even packed, two men showed up carrying sledgehammers, flashed some documents, and started swinging."

The methods of eviction varied widely. From QDaily's direct contact with more than a dozen tenants and from photos posted publicly online, some got verbal notice from landlords, others an in-person inspection from building management. Others, like Li Haoyu, came home to a note on the door. The wording, the issuing authority, and the deadline on these notices all differed.

At first, the Ziroom house managers — who hadn't expected to be swept up in this — gave many tenants a no-fault response. Li Di got a call from her house manager two days before Li Haoyu did, saying her partition room had been "maliciously reported" and that she had to move out within two days. The reason the manager gave: "government force majeure," for which neither the landlord nor Ziroom bore any responsibility. As it turned out, Ziroom's tenant contracts did contain such a clause.

Early on Monday the 27th, Xiong Lin posted an open letter on Weibo promising that any Ziroom tenant evicted over a partition would receive one month's rent in compensation, plus a free move.

Most Ziroom employees only learned then that the company's core business was in trouble. A Ziroom staffer who asked not to be named told QDaily that they, too, had only found out what was happening over the weekend, through outside sources. That day, Ziroom internally locked its pricing function, so no listed property would have its rent raised. Until then, leasing managers (the sales-equivalent role) had been able to apply to adjust prices within a set range to rent their rooms out faster.

In the staffer's words, handling the crisis had become the company's top priority, reaching nearly every department: "Think about it — tenants want to move out, we have to help them find places, we have to clean up the demolished units, we have to reassure our tenants…"

Three Ziroom users in similar situations told QDaily they were informed that only tenants who broke their leases over a partition after the 27th would be eligible for compensation. Those like Li Di, who had been notified earlier, could get only moving or cleaning vouchers.

Strictly speaking, Li Haoyu shouldn't have qualified for compensation either; he never worked out which link in the chain had made him a little luckier than the rest. The weekend before he left, he posted on Moments: "Realizing, hazily but very clearly, that I'm one of the low-end population too. Wishing myself luck finding a place to live."

But by the 28th he still hadn't found anything, and moved in with a colleague for a couple of weeks while he kept searching.

Big living-room layouts are great for selling — but for renting, they often get carved into "N+1"

Centaline Property estimated in 2015 that more than 60 percent of the new commercial housing on the Beijing market consisted of three-bedroom or larger units. These layouts are ill-suited to renting, and to shared renting in particular: in a shared apartment the big living room is common space, yet every tenant pays for an area they barely use.

Beijing is already the most expensive city in the country to rent in. Data from the China Real Estate Association show that Beijing's average residential rent in October was 78.7 yuan per square meter per month, the highest in the country. Data from the Beijing Municipal Statistics Bureau for the first half of 2017 show that the average urban resident in Beijing spends 50 percent of their income on rent.

Even so, Beijing's property market remains sale-oriented. A report on long-term rentals by Ping An found that in top-tier international cities, rental housing typically accounts for more than 40 percent of the housing stock; in Shanghai, Shenzhen, and Beijing, the figure is only 20 to 21 percent. Since 2016, Beijing home sale prices have risen far faster than rents.

The common workaround: a landlord or agency carves a separate room out of the living room to fit more tenants. Ziroom told QDaily: "Based on practice in Beijing over the past few years, turning one qualified living room per unit into a single optimized room — with adequate floor area, ventilation, and natural light — gives the living space real quality. It expands rental supply, stabilizes market rents, and lowers the cost of city living for young people."

The current rental policy took effect in July 2013, under a notice titled 《Notice on Publishing Standards for Per-Capita Living Area in Rental Housing in This Municipality and Related Issues》. It sets the minimum per-capita floor area for rental housing at no less than 5 square meters, and caps occupancy at two people per room (with exceptions for those bound by legal duties of support or care).

More to the point is this line: rental housing in this municipality shall use rooms originally designed and planned as living spaces as the smallest rentable unit; the internal structure of a dwelling may not be altered and subdivided for rent; and renting by the bed, or any other means of indirect subdivision, is likewise prohibited.

In 2013, Beijing carried out a concentrated crackdown on group rentals. News reports at the time said the focus was on newly rented properties, along with detached compounds, urban flathouses, rebuilt and converted rural housing, buildings in the urban-rural fringe used at once for production, business, and living, and rental housing in outlying areas.

In 2014, the government briefly changed tack and tried to legalize partition rooms. The Capital Comprehensive Management Commission floated an idea: "If a landlord cooperates with the renovation requirements, an 'N+1' partition could be permitted — that is, partitioning one room off a larger living or dining room for rent."

That same year, Tiantongyuan in Changping launched an N+1 pilot. A 2016 report noted that the pilot had not been expanded afterward. The official explanation: "The specific rules for the Tiantongyuan model are still being drawn up, covering unit type, living-room size, related safety measures, and so on. This is a new exploration in managing group rentals."

This is exactly how Ziroom turns living rooms into bedrooms. The bedroom Li Haoyu was renting — now sealed off — was the "1" in N+1, what Ziroom internally calls an "optimized room."

But to this day, N+1 has never actually been put into law.

As supply tightens, partition rooms keep getting rented

Nobody knows exactly how many partition rooms are or will be affected.

Ziroom had no firm number either: "At present, only a very small number of customers living in Ziroom optimized rooms in certain areas have been affected. Customers in standard bedrooms are unaffected. Whole-unit Ziroom tenants are unaffected. The total number is falling."

Tang Mo, who lives in Tianxing Jiayuan in Beijing, had already taken a full day off to look for a new place, but the search wasn't going well. She got her rectification notice two days after Li Haoyu. On the morning of the 25th, she had planned to sleep in on a Saturday. But at ten o'clock she heard urgent knocking at her door.

"When building management knocked, they said they were inspecting sanitation, but the moment they were inside they started feeling along the walls. When they found my room was a partition, they posted the notice on my door right then and there."

The date — November 28 — was filled in by hand in ballpoint pen. The notice stated plainly that an inspection had found Tang Mo's home to contain illegal partitions or overcrowding, making it an unlawful rental. Under the rules for managing group rentals, she had to complete rectification by the 28th; otherwise enforcement would follow, and any resulting consequences and losses would be borne by the resident.

Tang Mo and her roommates were also told that if they didn't move out and remove the partitions, the unit would have its power and water cut off in three days.

"I knew about the Daxing fire and the clearances, but I never thought it would happen to me," Tang Mo told us in a voice message. "That day my house manager told me they'd take care of everything and said I should relax and keep living there. But the next afternoon at 3:30, the Ziroom house manager suddenly called to say I had two days to move out — they'd refund the rent and deposit, but there was no other compensation."

Tang Mo works in brand strategy in Beijing and earns 14,000 yuan a month. But she couldn't stomach the new market rates. "The places the Ziroom house manager showed me were worse in every way than my current room, and across the board 700 yuan more a month. Ziroom's inventory is so tight right now that there's simply no way to find anything at the same price."

"Two days ago there were loads of apartments for rent in the Tiantongyuan Central Zone — now there's just one," a local Lianjia agent told us. Lianjia and Ziroom listings get snapped up almost the moment they go online. According to data a Ziroom employee gave us, on Monday, the day the public announcement went out, the number of users opening the Ziroom app spiked, up more than 20 percent on the same period the previous week.

Some people even showed up to view apartments with their luggage in hand. Another Lianjia agent had arranged to show a client an apartment, only to open the door and find someone already lying in the bed — someone who had viewed the place five minutes earlier, decided it would do, and simply moved in.

Meanwhile, partition rooms that hadn't been caught were still being rented out. That agent said: "If a partition room hasn't been flagged, it just gets rented like this. If it does get caught, the Ziroom house manager will work something out for you. Our listings follow the website — if you can still see a partition room listed there, it's obviously fine to rent."

As of the 29th, Tang Mo still hadn't moved. Building management had knocked on her door several times over those days; she and her roommates hadn't dared open it.

It isn't only Ziroom that's affected

On the same day Li Haoyu got his rectification notice, Sun Jing rented an Eggshell Apartment near Zhongguancun Software Park. Eggshell is another long-term rental brand, run in almost exactly the same way as Ziroom. This June, Shen Boyang, former president of LinkedIn China, became Eggshell's chairman.

Rent plus the service fee came to just over 3,000 yuan a month. When she paid, Sun Jing — a data-mining engineer — hadn't given the partition issue much thought. A few days earlier she had rushed out of a single's apartment near the software park after the owner's permits were found to be incomplete and the place came under investigation, leaving it without power during the day. "The fit-out was quite nice — apparently the owner had put in 20 million yuan."

The apartment hunt was just as rushed. On a workday she and a friend took less than an hour to settle on a 50-square-meter two-bedroom. There was no time to see anything else. "There aren't that many places near the software park, but there are so many people working there! … I thought Eggshell was great — it has maintenance and security."

The second night after she moved in, Sun Jing was evicted again. Two property-management workers in uniform knocked on her door and told her the partition was illegal and she had to move out, or the water and power would be cut. Only then did she realize the apartment had added a layer of building material to the living room of a one-bedroom to carve out an extra bedroom.

The scale of the clearance campaign may be tied to the Daxing fire, but it had begun well before the fire. Zheng Pei is 27 this year, and had worked as an engineer at a traffic-technology company and then at an online lottery company. She moved out of her old place in late September, came back after the National Day holiday, and began looking for housing around Xiaoxinzhuang. She chose the area for its closeness to the software park; Xiaoxinzhuang draws programmers with backgrounds much like hers.

Zheng Pei hadn't meant to rent a partition room, but after viewing six or seven places in a row, only one had no partition. In the end she and a roommate found a converted compound apartment — a two-bedroom remade into a three-bedroom. "I wasn't too happy with it: there's nothing around, it's pretty remote, and it's a twenty-minute walk to the subway." But she had no energy left to keep searching. She paid Homelink one month's rent as an agency fee and moved into a non-partition second bedroom for 1,500 yuan a month.

To this day Zheng Pei doesn't know whether it was building management or the neighborhood committee that came to drive them out; she only remembers that one day in late October, a man and a woman in plain clothes, both around 50, walked in with a very forceful manner: "They just said it was a partition and couldn't be lived in, that someone would come post a notice, and then they left."

"I was a bit stunned — they were only notifying you." Zheng Pei called the agent, who claimed to know nothing and told them to stay put for now and deal with it once the notice came.

In the end the notice never came. A roommate who'd lived there longer told Zheng Pei that the previous tenant in her room had moved out precisely because they'd heard the partition might be a problem. "Still can't figure out why the agent kept bringing people to view it."

More people in partition rooms are waiting to be served

Ziroom said it had not been told that every partition room would be affected, and that it was in active talks with the government — "that possibility shouldn't exist."

But Lin Yixuan had already started packing. She said her Ziroom house manager had told the group chat to relax — "Ziroom isn't the target this time" — but she was still on edge.

Lin Yixuan was just two years out of university and living alone in a Ziroom partition room in Tongzhou. She had arranged her League of Legends and Nintendo figures on a small shelf of their own — "where I can see them, like guardians."

Now the guardians had been packed into a bag. She said it was because she was afraid she wouldn't have time to pack if she was given only half a day: "I feel like I have to keep them safe."

Sun Jing was waiting too. Her Eggshell house manager's current proposal was to move her to a three-bedroom in the same compound — one that also had a partition room. Sun Jing didn't want to be split up from her current roommates, but staying meant going from a two-bedroom to a one-bedroom, and leaving might land her with a stranger; on top of that, no one knew when the second partition would be torn down. "Right now it's just a gamble over whether the partition gets demolished!"

More than the uncertainty of an eviction she couldn't time, Lin Yixuan was anxious about her career. She had spent her first year out of university working in Chengdu, and had only come to Beijing in her second year for the work opportunities.

A crisis that hadn't actually befallen her had instantly upended some of her plans. "Before all this I was thinking of quitting with nothing lined up. Now I'll hold off." Worried about rising living costs ahead, she wasn't even sure she'd stay in Beijing: "Who knows what other blunt-instrument policies will land on you."

On the night of the 28th, Li Di set up a WeChat group for collective action and called on people via Weibo to join and figure out what to do. In under three hours the group had more than 100 members. For many, the first thing they wrote on joining was to ask whether they themselves might be cleared out.

One Ziroom tenant living in a partition room wrote on Weibo, half in jest, that maybe they should just report themselves.

Li Haoyu, Li Di, Tang Mo, Sun Jing, Zheng Pei, and Lin Yixuan are all pseudonyms.

Updated November 30, 12:50 p.m. — two Ziroom Hostel (自如驿) locations shut down

At around 10:45 a.m. on November 30, inspectors from Beijing's work-safety bureau, health and family-planning commission, fire service, and public-security bureau arrived at the new Tuanjiehu location of Ziroom Hostel in Beijing.

Ziroom Hostel (自如驿) is a dormitory-style space Ziroom launched in July 2016 for short stays by young travelers. Rooms have bunk beds separated by hanging curtains, with four, six, or eight beds each. The fixtures and fit-out are generally a notch above an ordinary youth hostel, and rates range from 69 to 109 yuan a night. There are currently only three locations in Beijing, two of them open to travelers.

During the inspection, officials called the bunk beds inside Ziroom Hostel "capsule beds" — the same category as the space-pod accommodations Beijing had previously shut down — and a serious fire hazard. They also raised concerns about the routers and the fire-safety signage.

Around 11:40 a.m., the work-safety and fire authorities issued a suspension order for the Tuanjiehu location, cutting off its water and power for rectification and inspection, and requiring all guests to check out by 5 p.m. The other two Ziroom Hostel locations received suspension orders at the same time.

Staff on site told QDaily that the Tuanjiehu location had only opened on October 30, after a week of soft-launch operations. "There were many inspections before we opened, but no problems were raised at the time," one of the Ziroom staff said. The Ziroom Hostel CBD location at Sihui, open since 2016, had already been running for a year and a half.

Around 3 p.m., we received word that the CBD and Tuanjiehu Ziroom Hostel locations would reopen, and that the hostel would be converted to another use. As of now, Ziroom has not issued an official response.