Hutong residents angry over "insufficient" relocation compensation from a developer eager to build new apartments will get help, local government said Wednesday.

Zhi Wenguang, deputy director of the Xuanwu district construction committee told METRO Wednesday: "The government will help homeowners resolve this issue through legal means."

Residents in Xuanwu district say they are stuck in an aging hutong neighborhood in the underdeveloped southern part of Beijing, prepped for demolition but facing increasing quality problems, because the compensation offered from developer Citic Real Estate isn't enough for them to move out.

The project in Xuanwu's Daji area, a 400,000 sq m hutong complex dating back to Ming and Qing dynasties (1368-1911) with 8,500 households, kicked off in June 2005 amid public controversy. It ground to a halt last year after the Olympics.

Large Chinese characters signaling "demolition" have been painted on almost all the houses in the region but there is an absence of construction machinery. Many houses stand half destroyed.

A notice on Xuanwu district government's website said demolition should have been completed by August 2008.

"There are still 5,000 households left because we cannot reach an agreement with the developer on compensation," said Wang Xiuzhi, who has lived in the area for over 20 years.

Wang said her family of three inhabits a room of only 15 sq m. Although they want to improve their lives by moving into a new apartment, the family thinks the 400,000 yuan suggested by the developer is insufficient to buy a new apartment, even in suburban Beijing.

The new residential complex in the same area is already making money.

Figures from the developer show that buildings in the first half of phase one were all sold at 22,000 yuan per sq m.

Buildings in the second half of the phase are predicted to make 28,000 yuan per sq m despite not having been constructed yet.

A press official at Xuanwu district surnamed Shi told METRO on Monday the compensation of 30,000 yuan per sq m was already very high and that expectations of most of the remaining residents were too high.

"However, I also believe the government should offer low-rent or economical housing," he said.

And as the compensation disagreement drags on, residents also say the housing office is ignoring their dilapidating homes.

"We are fed up with the living conditions here," Wang said while pointing at the roof of her house, damaged from the recent heavy snowfall.

"I called the local housing management office but they told me not to bother them since my house might be demolished soon."

Homes are not the only issue for residents, as many of their jobs are localized to a community that might no longer exist.

A resident surnamed Li said he was worried about losing his income as a barber if the community closed.

"I would also miss hutong life. This is where I've grown up and raised my family," he said.

Yang Tuan, vice-director of the social policy research center under the Chinese Academy of Social Sciences, said the employment issue is as important as housing.

"Many hutong residents have community jobs and it is the government's responsibility to provide them with new means of survival," she said.