Small-house policy has become a right to print money
- The scheme is open to abuse with many recipients no longer living in their New Territories village. Perhaps future beneficiaries should be required to live in the small houses they build
The small-house policy, responsible for the rapid and incoherent growth of three-storey villas across the New Territories, has little to recommend it. But for most of my first decade in Hong Kong, it provided me with a home.
The 700 sq ft flats, each occupying one floor, provided relatively spacious accommodation at a reasonable rent – at least in terms of Hong Kong’s prohibitively expensive housing market.
But even then, in the 1990s, I could see there were drawbacks. My preference was always to find a flat with a view. This was not difficult in Mui Wo at the time. But at some point during the two-year lease, that view would be blocked by a newly built house. Time to move. The pattern repeated itself frequently.
At one point, I rented an isolated house on a hillside. It came with a little garden. Surely, this would be free of the small-house building boom. Then someone called and said they were inspecting the garden because they had a right to build a house in it!
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The small-house policy, introduced in 1972 to tackle squatter problems, has long been controversial. It allows male indigenous villagers of the New Territories to each build a house on land owned by themselves or the government. There is either no land premium or payment at a concessionary rate.
Indigenous villagers are those who can trace their male ancestry back to residents of the New Territories in 1898 when the area first became part of Hong Kong.
The policy clearly discriminates against women and all residents of Hong Kong who are not indigenous villagers. It has led to unplanned and often unsightly development in the New Territories as more and more houses are built.
It is also open to abuse. A land-use concern group estimated in 2020 that more than 800 houses built in the previous two years were the result of illegal deals between villagers and developers.
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Hong Kong’s small-house policy: indigenous rights or unfair advantage?
The government, struggling to ease a housing crisis, is well aware of the problems. In 2012, Chief Executive Carrie Lam Cheng Yuet-ngor – who was Development Secretary at the time – called for a line to be drawn under the policy.
But the scheme has been allowed to continue because it arguably forms part of the “lawful and traditional rights” of indigenous villagers protected by the Basic Law.
Last week, the Court of Appeal confirmed the policy is “constitutional in its entirety” and enjoys the protection of the law.
The judges ruled that although the scheme only dates from 1972 it is, in essence, providing a right that the villagers have enjoyed since the 19th century. It is in keeping with a promise made by the governor of the colony to villagers in 1899 that their “usages and good customs will not in any way be interfered with”.
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The right was preserved after the handover, the court said. But this is a very unusual human right. Building a small village house to live in at the end of the 19th century is one matter. Developing a villa, dividing it into flats, and renting it out or selling it at exorbitant 2021 levels, is quite another. It has become a right to print money.
For all that, we are a society governed by the rule of law. The ruling might be challenged in the Court of Final Appeal. It would be good to have a definitive decision from the top court. If the policy is ultimately found to provide a legally protected right, that must be respected. But the government will need to limit the impact of the policy on its plans for meeting the city’s broader housing needs.
Many of those enjoying rights under the policy no longer live in their village. Some live overseas. The right dating back to the 19th century is for villagers to build a house in their village “for their own occupation”. Perhaps future recipients of this right should, if they choose to use it, be required to live in the small houses they build – rather than selling them on and renting them to people like me.
