A nail house is a Chinese neologism for homes belonging to people (sometimes called "stubborn nails") who refuse to make room for development. The term, a pun coined by developers, refers to nails that are stuck in wood, and cannot be pounded down with a hammer.
In the People's Republic of China, the central government officially owned all real estate, and could in theory dictate who was entitled to control any piece of property according to national interests. Private citizens, therefore, did not have a legal right to keep their property if the government decided they should leave. With a strengthening economy private developers began building shopping malls, hotels, and other private developments in densely populated urban centers, which required displacing residents who lived on the land. Developers would typically offer relatively low compensation to the residents, reflecting the pre-development value of their properties or the cost of obtaining alternate housing elsewhere.
More recently, the People's Republic of China has begun to accept private ownership of real estate, including the still-controversial notion that owners are free to earn money when their land becomes more valuable due to planned developments, or even simply not to sell.
In March 2007, the People's Republic of China passed its first modern private property law. The law prohibits government taking of land, except when it is in the public interest. The law strengthened the position of nail house owners, but did not entirely resolve whether making room for private commercial developments was a public interest that entitled the taking of land.
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