Xi Jinping says houses are ‘for living in, not for speculation’. But is Hong Kong listening?
Barry Wilson says wealth creation should never be more important than our quality of life, and the Hong Kong government’s policy to encourage home ownership should not ignore other ways to give people a stake in society
President Xi Jinping’s comment at the 19th party congress, that “houses are for living in, not for speculation”, followed the continued tightening of housing measures across China since March, when cities began to introduce a sales ban. More than 40 cities now have such restrictions, with Xian, Chongqing, Nanchang, Nanning and Changsha having recently tightened controls – most have banned home sales for two to three years after purchase.
Meanwhile, the Ministry of Housing and Urban-Rural Development has introduced a trial programme to increase rental units in 12 cities, including Guangzhou, Shenzhen, Hangzhou and Xiamen.
In her first policy address, Chief Executive Carrie Lam Cheng Yuet-ngor focused on the Hong Kong housing crisis and suggested that extending homeownership was going to be at the core of her policy. Lam noted that people have a “rightful expectation” that the government should provide adequate housing, which is also “fundamental to social harmony and stability”.
This seems to toe the line of Beijing, where Xi has called for a housing system that ensures supply through multiple sources, with both housing rental and purchase.
Last month, Our Hong Kong Foundation unveiled their latest research on housing. The report, “Housing Policy Reform to Narrow Wealth Gap”, is a detailed critique of the imbalances in the government’s social housing programmes. It proposed a new scheme to improve efficiencies in the housing market. More importantly, the aim is to “inject wealth to households through the form of homeownership”, encouraging households to “satisfy their housing demand through the private market”.
Hong Kong’s wealth gap worst in five decades
In other words, it means treating housing as a commodity and the main driver of wealth creation, not as a basic human need.
This is, of course, the same private market that has stretched the wealth gap to ridiculous levels, and treats housing as a playground for fast-buck, labour-free rewards, similar to the stock market, race track and gambling hall. It’s the same market that China is heavily suppressing to mitigate property wealth accumulation.
Does this kind of thinking – treating housing as a commodity – not tell us what is so wrong about the priorities of Hong Kong, where pure wealth creation is considered more important than quality of life?
But why do people feel the need for homeownership? Studies show that people associate homeownership with putting down roots, starting a family and gaining a measure of security and control over the place in which they live. In other words, they want to feel like citizens, with a stake in their society.
There is also evidence of a remarkable connection between homeownership and the cultivation of strong communities. Owning a home significantly increases a person’s sense of belonging to their neighbourhood. Young people who want to own a property, but don’t yet do so, talk about not really seeing the point of committing to the area in which they are living or getting to know the people with whom they share a street or building. These are the things that make a vital difference to whether we build a common life together, or simply exist in a series of separate worlds.
As such, homeownership is tremendously valuable as a social tool. Such studies reinforce the concept that housing “is for living in and not speculation”. If our citizens feel they need to own a house to survive economically, then something is very wrong. And ownership can also be a financial albatross in a depressed market or when interest rates are rising.
In fact, through the provision of quality rental housing, balanced landlord-tenant rights and well-considered urban design, vibrant, safe and secure communities can also be built without the requirement of homeownership. Creating communities where non-owners are still able to be stakeholders and take pride in their community may become more of an aspirational housing approach than simply creating ownership.
We are about to see a plethora of new global models for fractional home purchase. Hybrid homeownership and rental models are allowing – through “resident-owned communities” and cooperatives – for the sharing of the management of parking, infrastructure, operations and common areas.
Tackling the housing crunch in Hong Kong
The city of Beijing recently unveiled a scheme to introduce homes with property rights to be shared by the government and buyers. According to the city’s housing authorities, individual buyers will be able to buy a share in such homes and still have the full right of use. It appears similar to the shared home ownership scheme of the Western Australia government.
Alipay, Alibaba’s third-party online payment platform, has launched a credit database for all rental homes, tenants and landlords registered with Alipay, while Airbnb has developed a new platform to provide mortgage deposits in exchange for rental access.
Given that we won’t be able to increase homeownership overnight, we should aim to increase quality, stability and control in the rental sector, both public and private. This will mean developing tenure that offers greater security and perhaps also the chance to take steps towards ownership. And we need more and much better quality public housing, too.
A worldwide housing revolution appears round the corner, with micro, mobile and temporary housing appealing to the younger generation. A more visionary approach to what is really important in housing is essential. Creating more homeownership may seem economically vital, but it’s more the quality of the living community that makes the real difference to the sort of society we build together.
Barry Wilson is an urbanist, lecturer and professional consultant. www.initiatives.com.hk