Yep, Taiyuan is cheap to live in...and it needs to be.
I think it may be the worst large city in China to live in. Cold, dry, dirty, horribly polluted, boring, provincial, and remote from other cities...everything you DON'T want in a place to live.

If these guys can't give the permits, and enough of the former expats have vacated, then they may well be becoming desperate enough to offer a decent salary for a change.

Of course, without a Residence Permit, you're just a victim waiting to happen, but at least you'd keep their school open a bit longer...