A culture of entitlement in public flats

PUBLISHED : Thursday, 24 May, 2012, 12:00am
UPDATED : Thursday, 24 May, 2012, 12:00am


About 100 people protested against the rent rise, the maximum allowed by law and the highest rise since 1997, at the [Housing A]uthority's Ho Man Tin headquarters yesterday ... The demonstrators, from different political parties and concern groups, called the authority a 'bloodsucker' and some burned banners.

SCMP, May 23

Let me define bloodsucking for you as understood by these demonstrators. Bloodsucking is an average rent of HK$1,248 per month for a Housing Authority rental flat.

That's right, just HK$1,248 a month. That's the figure for the financial year to March 2012, give or take a few cents for the difference between budget and final result. It is not HK$1,248 a day, which would still be less than a good number of people pay in the private sector, but HK$1,248 a month. The authority is a bloodsucker.

I must tell you, however, that I see red here as well. I see it in the accounts. They are in the red. The operating cost of keeping these rental flats in shape (lift maintenance, paint, plumbing repairs, etc) exceeds their rental income by about HK$1 billion a year.

But the authority has not done much in recent years to narrow this gap; quite the opposite. As the chart reveals, average public housing rents are 20 per cent lower than they were in 1997. They were reduced even while the general trend of consumer prices was steadily up.

Those missing sections of the line, by the way, represent months of complete rent forgiveness, a regular practice in recent years. Why don't you ask your landlord for one, too, and see what he says.

The present difficulty for the authority is that it made its rent-setting mechanism more flexible in 2007 in response to tenant moans of penury (Oh, so stricken. Check out the cars in the car parks). It is now required to adjust rents in line with a tenant income survey every two years. The latest survey indicated an average income lift of 16.24 per cent, largely because of the adoption of the minimum wage. This will automatically be reduced to 10 per cent as the maximum permissible and further reduced through yet another rent waiver. Bloodsucker!

But I have the solution. Let's remove this bloodsucker entirely. What we shall do first is conduct a really top-notch fix and repair job on every one of these flats. It will probably cost billions but it will be worth it. We shall then turn around and present each tenant with a title deed to his or her flat, absolutely gratis, no cost whatsoever. They will all be proud owners of their own homes. Never again will the bloodsucker bother them. It will in fact wash its hands of them.

It's a brilliant idea, isn't it? And it won't cost the rest of us anything that we hadn't sunk anyway. In fact we'll save money on all the operating costs that the new owners will themselves now have to pay. They will also have the fun of setting up block management committees and wasting untold hours on owner politics. Oh, what joy.

But it will never happen, unfortunately. It has been proposed to authority tenants before and always rejected by them. They are crafty enough to see what a good thing they have at the moment. Owner responsibility scares them. They are much more comfortable griping about the authority.

This is unfortunate. What we have done in our vast public rental housing programme is create a culture of entitlement and of denial of obligation. To give people an equity stake in their society is to foster accountability. We have done the opposite, as the silliness of Tuesday's demonstration reveals.

It will do the demonstrators no good anyway. Employers know how big a livelihood subsidy their workers get from government and they adjust their wage levels accordingly. Public housing largesse in practice becomes an employer wage subsidy.

If tenants ever understood how perversely the one can become the other, they might not focus so acutely on the wrong bloodsucker. It's a vain hope, I'm sure.