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Hong Kong housing
Opinion

How Hong Kong’s public housing policy is failing those most in need

Paul Yip says making rich tenants pay much more for public housing flats and easing dependence on land premiums for government revenue would be primary steps to improving conditions for the most disadvantaged in the world’s costliest housing market

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The interior of a subdivided flat in Sham Shui Po. Low-income households in subdivided units often have to endure demeaning living conditions. Photo: Edward Wong
Paul Yip
It would take the average Hongkonger today more than 18 years, using all their salary, to buy a flat of less than 500 square feet, according to the annual affordability survey by Demographia. Hong Kong has topped the home prices ranking for seven years in a row; Sydney is second, where just over 12 years’ salary is needed for a home.
Helping Hongkongers buy their own homes amid skyrocketing prices seems to be the focus of the latest government housing policy. Despite the increase in supply, the likelihood of interest rate rises and slower population growth, property prices in Hong Kong are still hitting record highs. The market has been affected by mainland companies pushing up land premiums and subsequently property prices.

The most pressing need for Hong Kong is to improve housing conditions for low-income earners and mitigate the mortgage burden for the middle class.

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Hong Kong has a unique housing market. There are about 756,000 public housing units designed to provide low-income earners with affordable accommodation. These account for 29.7 per cent of all households. There is some subsidised housing (20 per cent) and the remaining 50 per cent is privately owned.
The Kwai Chung Subdivided Flat Residents Alliance urges the government to set a minimum living standard, on October 31. The NGO’s suggestions were based on a checklist of 10 basic living criteria put forward by subdivided flat residents. Photo: Naomi Ng
The Kwai Chung Subdivided Flat Residents Alliance urges the government to set a minimum living standard, on October 31. The NGO’s suggestions were based on a checklist of 10 basic living criteria put forward by subdivided flat residents. Photo: Naomi Ng

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However, mobility or turnover of public housing tenancy is very low, despite improvements in the economic situation of tenants. There are about 26,000 tenants whose income falls within the top 20 per cent bracket. They are paying the “penalty rate” of two to three times the basic rent. However, this only accounts for about 5 per cent of their household income.

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