As condominiums spring up across the skyline, many young professionals are enjoying the perks of convenient, modern, and relatively affordable housing options. But what happens to established neighbourhoods when land is bought for development?
By Zachary Frye
Bangkok is experiencing a condo boom. Over the past decade, the number of units within city limits has doubled from approximately 300,000 in 2008 to over 600,000 in 2018.
Many of those units remain vacant, especially in less desirable locations. In the northern suburb of Nonthaburi, over 9,000 units sat unoccupied in the first half of 2018, worth a combined 23 billion baht (US$720 million).
While concerns over oversupply, interest rate hikes, and the imposition of tighter mortgage lending rules are dampening the market outlook for 2019, overall prospects remain steady: more construction and more high rises are on the way.
Some city residents are getting pushed out
“I am scared that they might start building another condo. The buyers might start coming around and buying the areas. Because usually they come from big companies, right? So if they start buying from the areas around here, for sure, we will be in trouble. This is what I’m worried about. We are going to have to find another place to live.”
Like many of the residents facing the prospects of eviction or displacement in the city, Prakong lives a life of economic uncertainty. When Russell Moore interviewed him for his research, he explained that unlike many other condominium dwellers who work on a fixed-salary, he and his family get by on Ka Raang – a Thai phrase meaning payment in return for work completed.
Prakong is one of the lucky ones. Although his building was close to a new condo development, it was spared – at least for now. His area is considered a prime location for new sites.
Others are finding it much harder to cope with the city’s development. Suta was displaced multiple times over the past decade. The first time was around 2008 after one of the first condos in the area, My Condo, was built.
“When it became developed, they drove people in the whole area out. Over there, there were 200 units. People who lived in those 200 units were all poor. They kicked us all out. Behind My Condo there were lots of old wooden houses. It was a slum…these days, it is no more.”
The second time Suta was displaced occurred after he and his brother used all of their savings to rent out a nearby building on a verbal agreement with the owner that the property wouldn’t be sold. Several years later, the owner sold the building to condo developers. Now, the luxury condo NYE by Sansiri stands in the location of his former residence.
There is legal recourse for lessees if the renter’s contract isn’t honored, but few take it
According to the local law firm Duensing Kippen, there are legal options tenants can pursue if a renter’s contract is broken. Section 569 of Thailand’s Civil and Commercial Code states that any existing lease contract must be honoured by the landlord, regardless if it’s the original owner or a new one.
However, many displaced tenants are unaware of their legal rights and accept their fate without further action. Other situations are more nuanced: instead of directly kicking tenants out, owners raise the rent or simply tell them the unit won’t be available once the lease ends.
Economic growth has sent property prices soaring, incentivizing owners to sell and pricing many local renters out of the market.
Chinatown shows pushback is possible but highlights the lack of prioritization on low-income Thais
In Bangkok’s Chinatown, a new subway station is about to make the district much more accessible. Although many see this as a welcome addition to the neighbourhood, it will send property prices rising and tempt more landowners into selling property as developers jockey for the next piece of prime real estate.
However, there are efforts to resist the onset of bulldozers and preserve local heritage. The Wang Lee family, a Thai family of Chinese descent that made their fortune in the sugar and rice trade, decided to forgo the sums from developers. Instead, they created a cultural centre and mixed-use community space in a dilapidated old steamship terminal they owned on the Thonburi side of the Chao Phraya River.
In order to protect renters’ interests like those of Prakong and Suta, only an approach that considers the plight of established working-class Thais will ease their burden.
There are several tools governments can use to promote responsible urban renewal. Adopting mandates of affordable housing units with a preference for local residents, low-income rent subsidies, and the preservation of culturally significant locations could help mitigate the processes’ more disruptive effects.
Sansiri, one of the largest real estate developers in Thailand, told ASEAN Today that its company policy is to purchase land “free of commitment or obligation to previous residents,” but acknowledged that some “negotiation is required with existing residents in a few rare cases.”
When asked about their response to reports of displaced residents in the city, they said, “this situation and process does not apply to our company.”