The Homogeneous Residence Under the Planned Economy

Abstract

This chapter describes the features of the “work-unit” compound, the typical residence prevalent in Beijing during the era of the planned economy, and to analyze its problems after China changed to a market economy. It is argued that with the transformation to a market economy, the homogeneous lifestyle that characterized the “work-unit” compound has gradually disappeared, and the “work-unit” compound was no longer suit to the new housing demands of the urban residents.

The main task of Chap. 6 is to describe the features of the “work-unit” compound, the typical residence prevalent in Beijing during the era of the planned economy, and to analyze its problems after China changed to a market economy . I shall first explain the origin of the “work-unit” compound, and then discuss the unique features of this homogeneous residence. Finally, I shall show the changes which have taken place in “work-unit” compound after China’s housing reform in the 1990s. It will be argued that with the transformation to a market economy, the “work-unit” compound, the product of the “Welfare-oriented Housing System” (WHS) , can no longer meet the emerging multifarious demands for housing today.

During the period of the planned economy, the “work-unit” system was the common mode of social organization in urban China, acting not only as the basic institution of employment for urban residents but also as the basic social structure for their lives. In the first section of this chapter I shall, therefore, begin with a brief introduction of this unique system under the planned economy in order to provide the reader a background for understanding of “work-unit” compound.

The “work-unit” compound was the concrete embodiment of the “work-unit” system in urban space. During the period of planned economy, besides the courtyard house, the “work-unit” compound was the main housing for urban residents in Beijing. In contrast to the courtyard house, which symbolized the traditional Chinese hierarchical society, the “work-unit” compound was characterized by its homogeneity. In the second section of this chapter, I shall analyze this homogeneous feature of the “work-unit” compound.

After China transformed from a planned economy to a market economy, especially with the urban housing reform in the 1990s, the homogeneous lifestyle that characterized the “work-unit” compound has gradually disappeared, and the “work-unit” compound was no longer suit to the new housing demands of the urban residents. In the final section of this chapter, I shall discuss China’s housing reform and demonstrate the effect it had on Beijing’s “work-unit” compound.

1 “Work-Unit” and the “Welfare-Oriented Housing System”

1.1 The Origin of the “Work-Unit” System

The “work-unit” (Danwei in Chinese) was the peculiar phenomenon that emerged in China’s urban society during the period of the planned economy. Its peculiarity lay in the fact that the “work-unit” embraced a wide variety of social and administrative functions, quite apart from its basic function of providing employment (as its name implies). It contrasted quite sharply with employment institutions in the West, which are concerned with labour alone.

“Work-units” were usually classified into two types: enterprises, such as factories, and institutions, such as governmental organs and schools. Based on their affiliations, “work-units” were further divided into those belonging to the central government, those belonging to provincial and municipal governments, and those belonging to the community. According to their type of ownership, they fell into two categories: some were owned by the state and others by socialist collectives . The scale of “work-units” could vary from small to large, employing anywhere from ten to tens of thousands of people, and occupying an area from hundreds of square metres to dozens of square kilometres. In a big city, the number of “work-units” could reach thousands, or even tens of thousands (Cai 1996).

During the period of the planned economy, most of the employed residents in China’s cities belonged to specific “work-units”. Each employee was considered a “member of the work-unit” (Zhou 2000). When people met each other for the first time, the first bit of information they would exchange about each other would be the name of their “work-units”, because in an urban society under the planned economy, one’s “work-unit” was thought to be the most essential part of one’s identity, even more important than one’s occupation (Cai 1996).

The earliest “work-units” evolved from the various political, economic, social and cultural organizations, and institutions which were established by the Communist Party of China, and were gradually moulded and shaped by the long-term revolutionary practices undertaken during the years before the establishment of People’s Republic of China. Due to the difficulties experienced by the people during the revolution, such organizations and institutions had frequently to engage in self-sufficient agricultural production, apart from having their own specialized functions. Therefore, they were multi-functional from the very beginning. When the Communist Party took over the state government in 1949, these organizations and institutions formed the foundation for China’s new “work-units”.

After 1949, many new large-scale “work-units” tended to be built in accordance with the key construction projects of the country. For example, in the 1950s, the Capital Iron and Steel Company was established in the western suburbs of Beijing, and several textile mills were set up in the northern suburbs of the city (Fig. 6.1). The land they occupied came mostly from confiscated agricultural land, and the newcomers to the “work-units” comprised employees transferred from other units, students assigned there after graduation, and also peasants recruited from the nearby rural areas.

Fig. 6.1

“Work-Unit” compound appeared in the 1950s in Beijing’s suburbs. Soure by courtesy of the Reference Room of the School of Architecture, Tsinghua University

1.2 The “Welfare-Oriented Housing System”

“Work-units”, whether they were factories, universities or research institutes, had, first of all, to perform specialized functions based on division of labour in society. These “work-units”, however, were not purely specialized workplaces but social organizations with multiple functions. Although “work-units” could differ in their specialized functions, they were all entitled by the government to certain administrative powers and could exercise administrative functions on its behalf. Thus, the “work-unit” was also a political organization, and served as part of the overall state political system. They, to some extent, “played the role of the government” (Ren 2002). Being the government’s deputy, and therefore responsible for all kinds of social welfare and social services , the “work-unit” was normally equipped with welfare facilities . Thus, the “work-unit” also performed social functions and seemed like a minified society . As essential elements of urban society, these “work-unit” made the whole city rather like one big “work-unit”.

As for the “members of a work-unit”, any salaries and welfare provisions that employees received, such as housing, medical care expenses, pension and so on, came to them via their “work-units” (Yang 2003). The “work-unit” determined their occupation, consuming capacity, values and social status, and also made them dependent upon their “work-unit” completely. Meanwhile, since every “work-unit” was a fully functional and independent body, a well-integrated social cell, it was often closed to the outside world: the “member of the work-unit” depended little on external society. Given this peculiar social structure in China, which became known as the “work-unit system”, it was said that “work-units run the society” (Hu 1995). In other words, the normal functions of society were grounded in these “work-units”, and the social space outside their boundaries was fairly limited.

The income that an employee earned in the “work-unit” could be divided into two parts: one was the cash income paid in the form of salary, and the other was the allowances, also called the “welfare income” , paid in the form of welfare provisions. Normally, once a person joined a “work-unit”, he or she obtained an “iron rice bowl”, from which he or she could obtain a guaranteed salary for living and a full-scale welfare package—housing, medical care, schooling for children and so forth—all at the expense of the state. Among the various social welfare provisions, the most important one was housing, which was distributed with a very low rent. This was done under the “Welfare-oriented Housing System” (WHS), an important feature of China’s planned economy (Xu 1996). This system was characterized by two points that housing investment was completely controlled by the state and houses were available to employees as a kind of welfare, on payment of low rents.

The WHS was rooted on the idea of the “balance of the income distribution system ” (Zhou 2000). During their working years, employee’s “welfare income”, was separate from their cash income. The “welfare income” was collected and retained by the state, and then allotted to the worker in the form of housing, medical care and so on, after long-term accumulation. Housing was the principal item in the “balance of the income distribution system”; in other words, housing was the biggest form of compensation that workers obtained in return for their contributions, perhaps over several decades or perhaps a lifetime, to the “work-unit”. However, it should be pointed out that, under the WHS, what employees obtained was only the right to use their living guaranteed house: in other words, their house was not their property and could not be inherited or circulated in the market.

2 The Homogeneous Feature of the “Work-Unit” Compound

2.1 The Structure of the “Work-Unit” Compound

During the period of the planned economy, the “work-unit” was for most urban residents the only means by which they could obtain employment. Apart from those who lived in the courtyard houses, most of the residents lived in houses allotted by their “work-units”, i.e. the “work-unit” compound.¹ Taking a retrospective view of its development, the “work-unit” compound came into being along with the development of “work-units” in Beijing after the founding of the People’s Republic of China in 1949. At that time, a large number of “work-units”, such as state administrative departments, scientific research institutes, colleges and universities, as well as military units, were established in Beijing or moved from other cities to it, the state transferred land to them for construction according to their sizes and levels. The “work-units” normally enclosed the land they obtained within boundary walls , and built the facilities inside.

A typical “work-unit” compound was composed of two parts: a working area and a living area. The former could also be divided into a production sector and an office sector, while the latter might be divided into a residential sector and a public service sector. The public service sector was often equipped with welfare facilities , such as staff canteen, public bathhouse, grocery store, and so on. A large-sized “work-unit” compound, furthermore, might provide the inhabitants with more welfare facilities, such as kindergarten, school, cinema and even playground and hospital. In such “work-unit” compounds, inhabitants were able to find almost all the resources they needed for their sustenance. As someone once joked, this kind of “work-unit” compound possessed everything except a crematorium (Qiao 2004) (Fig. 6.2).

Fig. 6.2

Plan of Sanlitun residential district in the 1960s. Source (CDG 2000)

Different “work-unit” compounds were of different scale and layout, but most of them were composed of similar elements, and as such showed common characteristics of spatial structure (see Fig. 6.3). In appearance, the typical feature of a “work-unit” compound was its entrance space. The entrance to a “work-unit” compound usually consisted of a gate, behind which lay the main building with an open or green space in front of it. All of these features attached a special and symbolic significance to the entrance space, which made people feel a sense of solemnity, the feeling that it could only be gazed upon from afar, especially by those who did not belong to the “work-unit”. Comparing to the entrance, its walls could more inform of the most fundamental feature of the “work-unit” compounds.

Fig. 6.3

The entrance of “work-unit” compound of Beijing Cotton Textile Combine in the 1950s. Source (BMCUP 1958)

As analgised in Chap. 4, walled enclosures were among the most basic features of the traditional Beijing’s cityscape. Walls were so central to the Chinese idea of a city, that they not only physically bounded various kinds of space—cities, palaces, temples, houses, and gardens—but also symbolized the manner of classification in an ordered Chinese urban structure. It’s rather ironical, during the 1950s and particularly in the 1960s, while the city walls were being torn down, new walls were being constructed and bounded “work-units” compounds all over Beijing.

Almost all the “work-unit” compounds had their own boundary walls. Indeed, when a new “work-unit” compound was established, the boundary walls were often the first structure to be built up. Inside the “work-unit” compounds, there were many facilities with different functions, each of which could be enclosed by walls, and all of which shaped the “work-unit” compounds the multi-walled compounds. Similar to city walls, the boundary walls of “work-unit” compounds symbolized authority, order and security as well. As being enclosed by walls which were their “outer shield” and gave them a strong enclosed nature, “work-unit” compounds seemed like a city within a city.

In addition, since “work-units” had the right to manage and control the land in the compound, they were often much more concerned about themselves than about the city as a whole. Thus the “work-unit” compounds had a strongly independent nature; it normally became a “blind spot” to outsides, and was frequently beyond the control of the master plan of the city. As the “work-unit” compound walls gradually became the norm, the boundary walls were once again an essential feature of Beijing’s urban structure.

2.2 The Feature of the “Work-Unit” Compound

2.2.1 The Lifestyle of the “Work-Unit” Compound

Any residential type is associated with a certain lifestyle, and the same is true of the “work-unit” compound. Under the planned economy, the lifestyle of the “work-unit” compound was characterized by its homogeneity, reflected in the family-like or collectivized living habits of its residents, and in the relatively poor but standardized living conditions.

To some extent, the “work-unit” played the role of a family. It represented an authority to its members, which was like that of a parent, and individual obligations to the group were emphasized more than individual right. In the “work-unit” compound there were regular collective activities, such as sports, films and balls, all of which comprised a unified lifestyle that permeated everything and lent to the lifestyle in “work-unit” compound the family-like or collectivized uniqueness. Meanwhile, because residents felt divorced from the city itself, this kind of life blurred their sense of citizenship. It made the dwellers of the “work-unit” compound feel that they lived in the “work-unit”, rather than in the city. Consequently, they were less conscious of their links with the greater urban society than with their “work-unit”.

During the period of the planned economy, the Chinese government issued unified criteria for urban housing construction, and dwellings in the “work-unit” compound had to be constructed according to these state criteria. Although the standards could be changed slightly, from one grade to another, according to the situation, these differences did not amount too much. For the most part, living conditions in the “work-unit” compound was standardized. Furthermore, they were standardized to a relatively low quality. Some of dwellings were equipped with only communal kitchens and shared toilets, used by several families together. Although in some dwellings private kitchens and toilets were set up, they were normally quite small, and some of them were allotted only about two square metres of floor space (see Fig. 6.4). The sitting room was also very small, and normally had poor lighting and ventilation. By today’s standards, this “room” would be better described as an entrance hall or aisle rather than a sitting room.

Fig. 6.4

Small-zised flat with open corridor in Xinfucun residential district in Beijing, 1957. Source (Hua 1957)

Compared with the courtyard house, discussed in Chap. 4, the “work-unit” compound embodies a different meaning in its social structure . The traditional courtyard house embodies the traditional social order, which emphasize hierarchical relationships, whereas the “work-unit” compound embodies a homogenous order, which emphasize egalitarianism and collectivism. However, the “work-unit” compound, to a certain extent, still retained some similarity to the traditional residence. Living in the same environment with each other, having almost the same economic background, and enjoying a similar capacity for social communication, the members of the “work-unit” compound usually formed close relationships among themselves. Although these relationships were not based on blood ties, members still had the sensation of being in a traditional household after staying in a “work-unit” compound for a long time. In fact the “work-unit” compound had been called a “work-unit tribe” by some scholars (Wang 1997). That is to say, although these “work-unit” compounds took a different form in its appearance from the traditional courtyard house, they created in the individual a strong feeling of affiliation with the “work-unit” and its members.

As for the social structure of the entire city during the period of planned economy, along with the construction of new industrial districts around the city, as discussed above, most of the “work-unit” compounds were almost the same, and this gave the entire city with homogeneous characteristics as well.

2.2.2 The Influence of “Work-Unit” Compounds on the City

As the basic type of residence during the planned economy, the “work-unit” compounds inevitably exerted an influence not only on the social structure of the city but also on its spatial structure.

As mentioned in the previous section, in the early period when the “work-unit” compounds were coming into being, the city planning department of Beijing at that time—the Municipal Committee of Urban Planning—was too “busy transferring the land” to think about the design and layout of each “work-unit” compound (Qiao 2004). Over the several subsequent decades, the construction of estates was carried out in a haphazard fashion, taking the internal demands of the individual “work-unit” compound into consideration much more serious than the requirements by the master plan of the city. Consequently, although the function of every parcel of land in each “work-unit” compound was clearly defined, these enclosed and independent estates were unlikely to constitute a complete and orderly urban structure from the viewpoint of the entire city.

The most essential reason for this phenomenon is that the land did not enter the market at all in China during the time of the planned economy. In the name of state-ownership of land, all “work-units” were able to use land free of charge over the long term. This was equivalent to “work-unit ownership of land” . Moreover, it often caused “work-units” to occupy as much land as they could. The urban land market theory reviewed in Chap. 3 did not work any more under this circumstance. When a “work-unit” carried out new construction within its own compound, the floor area ratio (FAR) and the height of buildings was planned to satisfy the demands of the “work-unit”, rather than with its relationship to the rest of the city. Accordingly, while one “work-unit” compound might have high-rise buildings, the one next to it might have only low-rise buildings. This resulted in the city having a disorderly townscape.

3 Housing Reform and the Changes Taking Place in “Work-Unit” Compounds

3.1 Reforms in the “Welfare-Oriented Housing System”

The “work-unit” system was attendant on the planned economic system. It was in certain respects quite suitable to the planned economy (Guo 1998; Zhou 2000). However , when China converted to a market economy , the disadvantages of the “work-unit” system were gradually exposed and mainly manifested in two ways.

Within the “work-unit”, the “work-unit” system was not efficient because of the multiple functions it performed. As the provider, not only of work opportunity but also all welfare to its members, the “work-unit” actually took on too many functions—housing, education and healthy security—some of which should have been provided by society as a whole. Correspondingly, the “work-unit” set up many unwieldy departments to undertake responsibility for those multiple functions, and their roles often conflicted with each other (Yang 2003; Hu 1995). As a result, the “work-unit” was unable to do everything satisfactorily, and often ran inefficiently. In addition, outside the “work-unit”, the “work-unit” system failed to bring about the social resources to the best effect. Under the planned economy, all the resources needed by the “work-unit” came from the government, which distributed those resources according to its own pre-arranged plans. That is to say, each “work-unit” made unilateral contact merely with the government department in charge, which caused different “work-units” to be closed off from one another. This system prevented resources from being transferred or exchanged among “work-units” and thus failed to put them to good use. Moreover, the “work-unit” system also restrained employees from changing jobs and moving to other “work-units”, a circumstance that also caused a waste of human resources.

As part of its transformation to a market economy , the Chinese government has taken various measures to reduce the multiplicity of functions carried out by the “work-unit”. Many welfare functions formerly performed by the “work-unit” began to be transferred to society as a whole and a new social insurance system is coming into being. The appearance of medical insurance, retirement insurance, unemployment insurance and other relevant welfare instruments have been easing the “work-units” welfare load. An official from the Labour and Social Insurance Department summarized this policy as follows: “Our aim, in this reform, is to turn the ‘member of work-unit’ into a ‘member of society’ within a social insurance system, step by step” (Hu 1995). The “work-unit” is no longer the only provider or controller of social resources. Its members now have more chance to obtain resources from outside and thus gradually reduce their dependence on the “work-unit”.

At the same time, the “Welfare-oriented Housing System” (WHS) , which, during the period of the planned economy, seemed fair initially, later started to give rise to many problems. One problem was that, under the WHS, urban housing was constantly in short supply and living conditions in general were not good. Another problem was that the social conflicts that had been provoked by unfair housing distribution became much more obtrusive after China shifted to a market economy .

Under the WHS, housing was distributed to employees as “welfare in kind” . All housing investment depended on funds appropriated by the government. However, during the period of the planned economy, the national government carried out the policy of “production first, living second” (Dong 2010), which meant the highest priority of governments has been given to the construction of industry, the housing investment, therefore, was always short of requirement. This resulted in a shortage of urban housing. As mentioned in Chap. 2, under the WHS, the per capita amount of living space in Beijing diminished over many years and, in 1960, dropped to 3.24 m², the lowest point for the city since the founding of the People’s Republic of China in 1949 (Tan 2002). In 1980 after China changed to a market economy and embarked a reform in urban housing, living space per capita of the city reached 4.79 m². This was the first time this indicator exceeded that of the 1950s. Furthermore, the WHS also resulted in financial difficulties that hindered housing maintenance. Although the government had formulated a policy of “using rents to maintain housing”, rents under the WHS were too low to meet the demands for maintenance. Maintenance, therefore, put in a heavy financial burden on the government. Due to financial shortages, the government was always in difficulty with regard to housing maintenance and living conditions within the “work-unit” compounds were not good.

In addition, the WHS brought about conflict over housing distribution, due to the general shortage of public housing . When distributing housing, “work-units” often devised means involving a series of indexes, such as the employee’s position, length of service, age and educational background, and even, sometimes, marital status and number of children, to decide who should live where. With so many indexes, it was hard to reach decisions and achieve fairness. Therefore, conflicts over unfair housing distribution became a common phenomenon under the “work-unit” system.

With China’s transformation to a market economy, the WHS could no longer provide social welfare and meet the new demands for housing. Urban housing reform became one of the most important reforms that China carried out during the past decade. In July 1998, the State Council of China issued the Circular Concerning the Further Deepening of the Reform of the Urban Housing System and the Acceleration of Housing Construction, which brought the WHS to an end (Wu 1996).

The urban housing reform in China was actually initiated in the early 1990s. However, because housing is so central to the livelihood of every family and to the stability of society, it had to wait until the social, economic and other relevant reforms had taken place before its own reform could be completed. The reform of China’s urban housing system has thus taken the path of “gradualism” rather than experiencing the “big bang” effect as in socialist Eastern European cities (Lee 2000). For this reason housing reform in China has lagged somewhat behind the other reforms that were taking place at the same time (Rosen and Ross 2000). For quite a long time, both old and new housing systems coexisted; the WHS was not abolished completely until 1998. The circular of 1998 stated that reform of the housing system should be continually pushed forward.

The policy for reforming the housing system in China focused on two main goals: the capitalization of housing distribution , and the commercialisation of housing supply (Yuan 2009). The capitalization of housing distribution means that housing allowances, rather than housing in kind, will be distributed, as in earlier times. The “work-unit” added a housing allowance to employees’ salaries to enable them to purchase or lease housing on the market (Xu 2000; Yu et al. 1998). Only if the capitalization of housing distribution had already been achieved, the commercialisation of the housing supply could be carried out. As opposed to the former WHS, in which housing distribution was conducted by “work-units”, families can now obtain housing in the market. This housing reform has reduced employees’ dependence on their “work-units” and has benefited the housing market by boosting the demand for housing.

3.2 Changes Taking Place in “Work-Unit” Compounds

China’s transformation from a planned economy to a market economy has caused dramatic changes in all aspects of the society and economy. Compared to that in other fields, housing reform in Beijing progressed much more slowly than other cities. Before 1990 Beijing’s urban social structure hardly changed at all, and the homogeneity that had characterized the period of the planned economy remained largely unaltered. In the 1990s, Beijing manifested appearance of major increases in consumption, increased mobility of labour and rapid growth of population. While all of these had brought new forms of employment, economic activity and lifestyle, they also brought the new modes of housing production and consumption, and new forms of social and spatial inequality as well (Broudehoux 2004:242). In the urban space, while most “work-unit” compounds in Beijing are still in place, their physical looking and their resident profiles are somewhat gradually beginning to change. The changes are reflected in many ways. Three types of adaptations have been particularly made.

First of all, the “work-unit” boundary walls have a much more open appearance than before. For years, the “work unit” compounds that were formerly characterized by a largely self-contained entity with high, thick and imposing walls, whose domain was closed to outside influences, have been altered into ones bounded with commercial buildings (Fig. 6.5). This reflects an increased awareness of commercial values under the market economy . Under the planned economy, “work-units” developed welfare facilities within their walled boundary, giving no access to outsiders, for the exclusive use of their members only. As emerging market forces made more opportunities for citizens, the pattern of collective and standardized consumption supplied by welfare-oriented facilities became less viable.

Fig. 6.5

A store broke walls of “work-unit” compound in the 1980s. Source by courtesy of the Reference Room of the School of Architecture, Tsinghua University

With the rapid commercialization, the government considered some features of the cityscape under the planned economy to be barriers to the new economic and social life, the walled “work-unit” compound is one of them. In July 2001, Beijing’s municipal government issued an official circular to encourage once exclusive “work-units” to open their welfare facilities, as social facilities, to public use. This has resulted in a wave of making use of “work-unit” compounds to expand private sectors for realizing profit of walled space. Many of boundary walls were breached by canteens and restaurants run by outside businessman sat side by side with numerous advertising billboards.

Second, the differentiation in tenure is taking place within “work-unit” compounds. As emerging market forces opened up new opportunities for employment, the mobility of labour, capital and information across the borders of the “work-unit” greatly increased. Yet the mobility created different consequences for different residents.

After 1990, some urban residents began to take their own initiative in choosing residences according to what they could afford. Apart from the “work-unit” compound, which had been their only choice under the WHS, there were more choices available to them in the real estate market. Some these residents drew on diverse offerings outside the “work-unit” and applaud new choices opened up by commercial interests while others complained that market processes caused inequality. They were not able to afford to purchase their residents in the real estate market and still centred their lives on the “work-unit” compounds .

With better-off households are moving out of “work-unit” compounds into private housing estates, their residences were filtered down to people who may not be associated with the “work-unit” for rent, or to market for resell if the properties are allowed by the “work-units” to be shifted into the private domain. The coming of these new residents created new identities and lifestyles to the “work-unit” compounds. While the physical features such as walled enclosures and unified residences continue to shape the urban structure and would not disappear completely, the original concept of “work-unit” compounds and associated connotation of homogeneity are disappearing.

Third, in many “work-unit” compounds, the management of the estate, which had been run by “work-unit” before, is now run by the community. Because the gradual collapse of the “work-unit” system has been accompanied by transference of social functions that were previously borne by “work-units” to society in general, many of “work-unit” compounds have adopted new management systems, some of which were run by private property companies.

4 Conclusion

The “work-unit” system, as the main basis for urban social configuration, played an important role in the formation of Chinese urban society during the period of the planned economy. At the same time, the “work-unit” compound , as the typical residence of the “work-unit” system, became an important and new component in Beijing’s urban structure.

As it was shown in this chapter, the “work-unit” compound manifested a homogeneous type of residence under the planned economy. Such homogeneity in the society within the “work-unit” compounds found expression in family-like and collectivized lifestyle and in relatively low but standardized residential conditions, and moreover, these homogeneous “work-unit” compounds resulted in a homogeneous residential structure for the city as a whole.

With the transformation towards a market economy , the “work-unit” compound is seen as a residential type lagging far behind the quality demands of residences today. This chapter has shown that the “Welfare-oriented Housing System” (WHS) , which initially seemed to be a reasonable system, gave rise to many problems, and eventually resulted in two consequences. First, urban housing was constantly in short supply and second social conflict arouse because of unfairness in the housing distribution. As the planned economy system has gradually been replaced by the market system, the social functions formerly performed by the “work-unit” have been taken over by the relevant organizations and institutions of society as a whole. Housing and living conditions of urban residents are no longer dependent on their “work-units”. The housing system reform is gradually causing the disintegration of the “work-unit” compounds . For the most part, the homogeneous lifestyle of the “work-unit” compounds has gone. Although the “work-unit” compounds will continue to exist in form in Beijing for quite a while, as a homogeneous type of residence, “work-unit” compounds, are gradually disappearing or become no more than historical features of the city.