Wandering in the maze-like hutong of Dongcheng district, Wang Xiang hunted down a space for his theater amid Beijing's disappearing courtyards, or siheyuan.

It was 2007 and his now-established Penghao Theater near Nanluoguxiang was then only an idea in his head. To turn this dream into reality, Wang embarked on a door-to-door search for hidden courtyards in the Sanlitun, Houhai and Gulou areas.

It took Wang, a Beijing native, almost a year before he finally located a medium-sized courtyard in Dongmianhua Hutong to rent that fit his space and price needs. He poured in about 1 million yuan ($160,500) to restore the 300-square-meter courtyard into a caf�� and 90-seat theater, the only courtyard-turned-theater in the city.

The search for the perfect courtyard ended up a worthwhile one for Wang, but it's nonetheless a difficult process, with government restrictions and a dwindling supply of the traditional-style homes being the two biggest hurdles.

In the past decade, the number of courtyards has declined significantly as they were torn down to make way for rapid urban expansion. Those now among the rubble include former residences of well-known figures such as architect Liang Sicheng, which was knocked down in 2012. According to statistics from the Beijing Tourism Bureau, there are about 4,000 courtyards in existence and about 700 in good shape.

As much as government policies have harmed courtyard heritage, some are now also helping to stabilize the number and condition of surviving courtyards - and it's never been easier for an expat to own one of these pieces of Beijing history.

Dynasty days to present day

 Courtyards, characterized by a small, central garden surrounded by rooms on all four sides, are the traditional Beijing residences, with many dating back to the Ming (1368-1644) and Qing (1644-1911) dynasties. Many once housed imperial families or officials. The engraved, wooden doors, gray roof tiles and upturned eaves of courtyard homes typify traditional Chinese architecture.

Customarily occupied by several generations of one family, courtyards and the way of life they represent were first threatened in the 1950s as the Party placed several families within one courtyard, and the houses were collectively owned by the government.

Modern development also did courtyards no favors, and many historic homes were lost in the push for progress. But since the early 2000s, the government has resumed individual property rights for courtyards and the Beijing Municipal Bureau of Land and Resources has instated a string of preservation-friendly policies.

In 2004, regulations went into effect that lowered tax rates on courtyards and opened up the market to foreigners. After 2004, interest in buying or renting courtyards surged. While most owners now are Chinese, expats make up a strong contingent of the those owning and renovating courtyards for personal residences, hotels, restaurants or galleries.

Market conditions

Among the existing courtyards, the majority lie within the Second Ring Road - closer to their imperial roots - in Dongcheng and Xicheng districts.

Prices have certainly increased, but at a more steady pace than apartments, according to Zhang Rencang, a property lawyer specializing in courtyards. In 2007, courtyards were priced at 40,000 to 60,000 yuan per square meter, and nowadays the price has risen to about 80,000 to 100,000 yuan per square meter for courtyards within the Second Ring Road, he said. Those available for rent or purchase mostly fall between 300 to 700 square meters in size. 

Though Chinese banks don't provide mortgages on courtyards, many other policies make ownership for courtyards easier than apartments. The basic requirement for foreigners is to have been living in China for one year, the same as it is for apartment purchases. Buying more than one courtyard is not restricted, though, as it is for apartments.

However one big policy change came in February 2012: courtyards sold or rented after that date would have to maintain their current functions. That is, residences must remain residences, and restaurants must stay restaurants.

Small working outfits can be set up, but anything more than an office or private club would require a business certificate to operate.

With this stipulation, Wang could not have created the Penghao Theater today. However, this also means that Wang's theater space, which opened in 2008, has been grandfathered in. Should his landlord want to oust him, only another theater tenant can replace him.

Preservation through privatization

The government's regulations have been introduced as a new way to protect the ancient architecture by inviting investment from individuals.

For example, the Red Capital Club, a restaurant and bar in Dongsijiutiao in Dongcheng district owned by American entrepreneur and author Laurence Brahm, preserves the 200-year-old former residence and also contains a vast collection of Mao-era historic relics.

However, the practice of turning courtyards into modern businesses doesn't elicit praise from all cultural conservation experts.

The preservation of courtyards should be evaluated from all aspects, said He Shuzhong, founder of the Beijing Cultural Heritage Protection Center.

"First, they should not be torn down. Second, their overall appearance should not be altered as part of the urban landscape, and third, life in the courtyard should be maintained as it used to be," He said.

Wang, a staff member with the Red Capital Club, insists that turning the houses into businesses is the best way of preserving them.

"Many of the courtyards in the hutong near Dongsi have been torn down to build new houses and some only keep the external appearance intact," said Wang. "Only those being turned into business are able to be kept and maintained in good condition."

He agrees, however, that basic preservation of the buildings and neighborhoods trumps all arguments over usage.

What the government needs to do, He said, is to reassure the residents that the old houses won't be torn down to make way for further urban expansion.

"The residents will spend more time and effort preserving the houses themselves only when they are certain that they won't be forced to move out," He said.