In the process of city rehabilitation and transformation，the renewal of the old residential quarters that have lost some of the functions will contribute to improving city function，promoting the pattern of city development and raising the living standard of the residents. The renewal policy and practice of the old parts of Beijing have achieved a lot since 1980s，though they have undergone some adjustment and change. This paper，taking the policy shifting from renovation of a deteriorated building to reconstruction of shanty towns as an example，illustrates the general living conditions of the local residents and their views and expectations of compensation for expropriation and of re-installment，as are reflected in the result of the poll. Based on the findings of the enquiry，this paper，in combination of the existing policies and regulations of Beijing，systematically analyzes and thoroughly ponders the notable problems arising from the reconstruction of shanty towns，and attempts to offer some advices with a view to facilitating the renewal of Beijing City against the background of synergistic development of Beijing，Tianjin and Hebei Province.