Hong Kong’s public housing should cater to the masses, as Singapore’s does
Wilson Wong says instead of tinkering with stop-gap measures to ease the shortage of good quality, affordable housing, the government must redefine the nature and purpose of its public programme
How Hong Kong’s public housing policy is failing those most in need
Thanks to recently tightened rules, affluent public housing tenants will be required to leave if their household’s monthly income or asset level exceeds certain thresholds; under the current system, this would include households with incomes of more than five times the preset limit, and those with total assets of more than 100 times the limit.
Eviction plan: Housing Authority backs kicking out wealthy public housing tenants to free up flats
In the past, tenants had to give up their flats only if their income and assets both exceeded the limits. Thus, many well-paid individuals could continue to live in public housing by claiming their household assets fell short of the limit. In 2016, at least 26,000 relatively affluent households were living in public housing.
The recent tightening will make it harder for these well-off tenants to stay on. In fact, the thresholds could be tightened further, particularly that for the asset limit. The Housing Authority should constantly review its policy and eliminate any loopholes for exploitation.
To surmount this problem, the Housing Authority could consider building two categories of public housing – one for the relatively well-off and another for the less well-to-do. The premium paid for the higher-end public housing could be used to augment public estate facilities or even to build more public apartments. Both types of public housing should be located in accessible, safe and vibrant neighbourhoods.
Overcoming Hong Kong’s housing problem requires more creativity and boldness than stop-gap measures such as building container homes. Evidently, the provision of high-quality public housing is a costly business, but in a city buffeted by rising income inequality and its accompanying social tensions, it is a price worth paying.
Has Hong Kong housing become unaffordable for most?
Singapore is evidently the star pupil when it comes to the provision of world-beating public housing. About 85 per cent of Singaporeans live in government-subsidised flats which they own; in truth, these flats are sold on 99-year leases, but that should be sufficient for most cases. The government agency responsible for this superlative housing scheme is the Housing Development Board (HDB).
The city state shrewdly realised from the outset that the provision of affordable quality housing is the bedrock of a strong and stable society. When the board was first founded in 1960, its strategic objective was to provide accommodation for the impoverished. But, within a few years, it changed course to become a provider of mass-market housing.
With this masterstroke, the Singapore government effectively gave every citizen a stake in the country’s prosperity, in the process, cementing the ruling party’s power for the next five decades.
The fact that the government owns the bulk of the land in Singapore (currently around 90 per cent) makes the implementation of an ambitious nationwide public housing strategy all the more viable.
Of course, there are tight constraints on the purchase and sale of these so-called HDB flats, in an effort to curb speculation and keep prices accessible, or to support social aims. For instance, priority is given to married couples while singles are permitted to acquire these apartments only at the age of 35 or above.
HDB flats vary in size, and are generally more spacious than the ones available in Hong Kong. For instance, even a small three-room flat (two bedrooms and a living room) is a generous 650-700 sq ft (typical cost: US$250,000 to US$300,000) while an executive apartment is around 1,400 sq ft; these flats are also located in safe estates with many amenities (such as schools, bank branches, medical clinics, food centres, shopping malls, and bus and train stations).
‘HDB flats’: public housing in Singapore
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By contrast, smaller apartments in Hong Kong cost significantly more. For instance, even a small flat of around 300-400 sq ft in Sha Tin, New Territories, could cost around HK$5.5 million, or US$700,000. The acquisition of this minuscule apartment would also require a 30 per cent down payment, rendering home ownership in Hong Kong increasingly out of reach for its youth, particularly those without parental support.
Hong Kong public housing policy still failing low income families
The far-sightedness of Singapore’s public housing system was instrumental to the country’s success. It realised right from the beginning that solving a city’s housing woes is critical to ensuring the country’s long-term stability and economic progress. To put it bluntly, even disgruntled (but well-housed) people are less likely to stage mass demonstrations, if they (being economic stakeholders) are concerned about the potentially deleterious impact on their city’s economy and property prices.
Moreover, the success of Singapore’s public housing policy was due to a highly effective top-down approach, a feat that Hong Kong (long accustomed to a laissez-faire system) would have considerable difficulty in replicating, should the city choose to do so.
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To succeed, Hong Kong would have to forge a bold new path, which would involve building more public housing with multiple tiers (somewhat akin to Singapore’s), and implementing effective means testing to ensure optimal allocation, while concurrently imposing measures to discourage speculative activities.
More importantly, the authorities in Hong Kong need to define categorically the nature and purpose of public housing, both of which Singapore firmly established in the early days of its successful housing agenda.
Wilson Wong Kia-onn is an assistant professor in the Department of Accounting and Banking at Chu Hai College of Higher Education