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I'm losing my house? Great!

Another side of China's housing story.

Workers from a demolition company on a site where old houses are being demolished to make room for high rise buildings in Shanghai, Jan. 10, 2008. (Nir Elias/Reuters)

SHANGHAI — Graffiti is the scourge of Shanghai.

Painted on old buildings in every neighborhood is the Chinese character chai (拆). No, it’s not the work of some prolific teenage troublemaker — it’s far more ominous. It means destroy, and if it’s painted on your house, you better start packing.

As Shanghai continues its centuries-long shift from tiny seaside village to one of the world’s most modern metropolises, destruction has become part of life and guessing when your house will be torn down is common conversation.

But the reaction of most locals to finding that dark mark on their property might surprise you — they’re usually happy about it.

That's because owners often end up with a windfall, courtesy of the government.

"My family’s house is about 50 years old and is very cold in the winter. We don’t even have a bathroom, and instead use a bucket which we empty every day in the communal courtyard for disposal," said Ms. Jiang, a 25-year-old office worker, whose house near Shanghai’s glitzy Xintiandi area is being torn down for development.

Modern apartment complexes in the area, like Rich Gate and the Lakeville Regency, fetch rents of Rmb 40,000 ($5,856) to Rmb 50,000 ($7,320) per month for a 200-square-meter apartment, far more than the Rmb 500 ($73) to Rmb 1,000 ($146) per month rental range for Ms. Jiang’s apartment.

"The real estate developer offered us money or a new modern apartment. I think we will take the apartment, even though it is far from the city center. They are building a new metro line near it and when that is completed we can sell it for a lot of money," Jiang said.

But demolition is not unique to upscale neighborhoods in Shanghai. From 1995 to 2003, the most recent data available, a whopping 31 million square meters of housing in Shanghai was demolished, forcing the relocation of 704,423 residents, more than the population of Boston.

Bob Chen, 27, an interior designer, recently negotiated a cash settlement with the government for his family’s 60-year-old house, which was in the way of a road-widening project. With that money, he was able to buy a new, more modern apartment and still had enough left over for a car.

"Our family lived in that place for over 60 years, so we have a lot of memories," Chen said. "Overall, we're happy, though, because the new place is a lot more comfortable and doesn’t leak like the old one. We definitely received an acceptable compensation."