SHANGHAI, China -- The Xue family is very close, at times too close for their own comfort.
Four generations -- 10 people in all -- live in a 200-square-foot apartment that has been the family's home for 28 years. That's a single bed's worth of living space for each person.
The Xue family's kitchen is a hot plate in the hallway of their dilapidated, 60-year-old apartment building. They share a communal toilet with residents of three other flats.
For a semblance of privacy, the Xues divided their one room into two spaces and built a sleeping loft with three feet of headroom. But finding a place to sleep is still tricky.
At night, Xue An Mao, the family's 79-year-old matriarch, shares a bed with her 24-year-old youngest grandson. Her son and daughter-in-law climb a makeshift ladder to the loft. Her eldest grandson and his wife and son share another bed. Her second grandson and his wife and son sleep on the floor, their legs sticking under the second bed.
In Shanghai, China's largest and most densely populated city, this crowding is far from unusual: Such tiny homes are called "pigeonholes" here, and more than 400,000 families are cooped up in them -- most with no private kitchens or toilets.
Grandma Xue admits that her grandsons may have liked a little more room "when they were courting," but she says, "We've gotten used to this. We don't have any quarrels. Because space is so limited, we take care of each other."
Her daughter-in-law, Shen Fujuan, 60, is less enthusiastic: "It seems that China's family-planning system was adopted a little too late for us."
But even that might not have been enough.
Chinese officials are now facing the reality that strict birth-contropolicies alone will not ensure that the world's largest population is adequately housed.
The heavily subsidized benefit of nearly free housing has long been taken for granted by China's more than 300 million urban dwellers. Virtually all urban housing is owned by government agencies or enterprises, and families typically pay rents of only about $1.30 a month, or less than 5 percent of an average worker's salary.
Often hailed here as one of the superior achievements of socialist China, this housing system has provided little incentive to build new homes or even maintain existing housing. It also has proved financially unsustainable.
As a result, the strapped central government has begun in Shanghai and a few other cities to force all residents to pay an increasing share of the actual cost of their housing in exchange for allowing some to buy their own houses for the first time.
Modeled after successful housing corporations in Singapore and Hong Kong, this effort hastens the return to China of the long-banished concept of private property. It also reflects a broader trend toward turning over an increasing share of the Chinese economy to market forces.
Along with moves to strip workers of lifelong job tenure, free medical care and other subsidies, it represents one more way that "the iron rice bowl" that has sustained most Chinese for the last four decades is being shattered by incentive systems and privatization.
Urban China's housing problems are so huge, that it is likely to be more than a decade before even the most successful efforts bear noticeable fruit.
Though China's economic reforms of the 1980s enabled more than 40 percent of all rural families to build new homes -- often brick, two-story structures -- city dwellers have only been able to stock their same old, cramped, concrete quarters with the relative luxuries of televisions and refrigerators.
While rural per-capita living space ballooned to 200 square feet, or the size of the Xue family's entire apartment, the average urban resident remains squeezed into a third of that space.
In Shanghai, the housing problem is most acute.
"Shanghai lives on the knife-edge," a headline in a Chinese paper recently proclaimed. It bursts with 13 million residents and an additional 2 million transients. Half are crammed into the city's center, an area the size of Baltimore City with 10 times the people.
A sagging infrastructure results in regular disasters such as gas-line explosions. Epidemics -- more than 300,000 residents came down with hepatitis in 1988 -- are a constant threat. A recent item in the city's press boasted that Shanghai's main river, the Huangpu, failed to emit a strong odor for a few days one month. "If we can make housing reform work here, it can work anywhere in China," said Wu Zheng Tong, a researcher with the city's housing authority. "But even then, we'll only be able to improve, not solve, our problems."
Making it work will depend on the willingness of Chinese consumers to pay for something previously considered a natural right. Instead of housing expenses, most urban dwellers have been spending more than half their salaries on food and, in recent years, banking much of the rest.