Slow down

On June 27, a 13-story apartment building in the under-construction Lotus Riverside complex in Shanghai’s Minhang district toppled over. One worker was killed. Nine people were later arrested in connection with the incident.

The heavily publicized disaster is only one of a recent spate of construction quality and safety issues to hit Shanghai recently. In early July, the pit of an expansion project at the Southern Hotel, less than 2 kilometers away from Lotus Riverside, collapsed under heavy rains.

In the past two years, the city has seen construction disasters in its most high profile projects – a fire during the construction of the Shanghai World Financial Center, another fire at the site of the World Expo, and at least two major accidents during subway construction that killed three workers and injured six.

The series of building collapses in Sichuan province during the 2008 earthquake also called Chinese construction standards into question. Many Chengdu residents, for example, refused to return to their buildings even after the municipal government assured them they were safe, preferring to camp in parks and on sidewalks indefinitely.

Good code, bad cops

The poor quality of these buildings cannot be blamed on lax codes, according to Peter Meng, director of engineering at construction management firm SSOE. On the contrary, Shanghai building codes are "world-class," he said, adding that the Chinese government partners with overseas universities and industry organizations to research building standards. "Enforcement of codes, however, is more inconsistent and needs to be addressed more than the codes themselves," said Meng.

The problem with enforcement comes down to the political economy of inspection. The duty of ensuring safety largely falls on the construction company itself, and the construction supervision company that it hires. While municipal and local construction bureaus often send over inspectors for random checks, many of them have connections with the supervision companies and can often deliberately overlook problems.

In addition, construction companies are often pressured by developers to hurry the pace of construction, which means cutting corners. "Is there pressure on the design firms, construction companies, and vendors that sell services into a project from a cost and schedule standpoint to cut corners?" asked Meng. "Sure."

The Lotus Riverside accident, for example, was caused by the construction company piling 10 meters of soil on one side of the building, while excavating a 4.6 meter-deep garage on the other side, creating too much lateral pressure. The Shanghai safety codes state that soil cannot be piled higher than 3 m next to a building.

The construction supervision company, Shanghai Guangqi Construction Supervision, admitted to state media that it had informed the construction company about the danger of the soil pile, but were encouraged to keep quiet. The head of the company put it bluntly: "We have to eat."

The Shanghai Bureau of Social Housing and Building has responded to the problems by mandating that all developers must, from October 1, carry out full safety checks on all newly built buildings. Currently, only partial checks are mandated. In addition, the city will enforce more stringent qualification standards for construction companies and ban companies with safety violations and failed appraisals.

Do it yourself

However, the new regulations don’t address the core problem – lack of independent oversight. As long as development companies still hire and pay the wages of supervision companies, conflicts of interest will arise. This largely leaves the due diligence up to the consumer.

Homebuyers in China, unlike in many Western countries, usually do not hire home inspectors before signing a contract. Matthew Utterback, a former member of the American Society of Home Inspectors, who does occasional home inspections in Shanghai, says that without an architect or a home inspector, consumers must be extra-diligent about their own research.

Utterback advises purchasers to first consider the district the property is located in; local governments have a wide degree of control over code enforcement. "Some districts are better than others," he said.

Buyers should also check the history of the developer and construction firm, keeping in mind a warning published in the state-run China Daily: "It is no secret that the construction industry is one of the most corrupt."

In addition, it is important to get a copy of the Guarantee Letter of Construction Quality before purchasing an apartment, said Joanna Tan, general director at Joanna Real Estate, a leading agency in Shanghai. Tan recommends sticking with large development companies which will often pay more for better construction. If all else fails, head toward the properties where people already live.

"It is a ground rule to buy an apartment in the most popular complexes," Tan said. "That’s what the locals always do, because the popularity exists for a reason."