Chinese media lay into New York-listed home rental platform Danke as they urge authorities not to let exploiters get away
- Danke, which rents flats from landlords and leases them to tenants, failed to make payments in recent months
- The company’s crisis points to problems in the fast-growing rental apartment industry, invites regulators’ scrutiny, official media say
China’s state media urged authorities to take a hard look at the rental apartment industry after a liquidity crunch at New York-listed services provider Danke sparked an outcry from furious landlords and tenants across the country.
Danke, officially known as Phoenix Tree Holding, rents flats from landlords on a long-term basis, refurbishes them and then leases them to tenants. In what looks like an apparent cash-flow failure in recent months, the company has missed payments to landlords, employees and contractors. Tenants across the country have been evicted, in some cases violently, by their landlords, with some yet to repay bank loans arranged by Danke.
Official media including People’s Daily and Xinhua urged Danke to take responsibility for its debt-fuelled expansion that eventually spiralled out of control after the Covid-19 pandemic. They also called for tougher regulation in the fast-growing US$264 billion industry, which has benefited from a government push to develop the rental housing market, China’s sky-high property prices and an inflow of a young workforce into big cities.
“Long-term rental apartment was an innovative business model that filled a gap in the market and received favourable policies, but it has now become a cover for profiteering,” said a Xinhua commentary published on Monday. “Authorities cannot let the exploiters get away.”
Tenants and landlords should not be the ones paying for Danke’s failure, People’s Daily, the Communist Party’s mouthpiece, said in a post on its official Weibo account on Friday. The industry and regulators should review the business model, which relied on leveraged expansion, it said.
