Drastic measures to solve Hong Kong’s housing crisis are long overdue

For too long, the government has permitted the private market to heat up while neglecting its commitment to ensure adequate affordable housing for the masses
John Lee must ensure effective policies are in place to eliminate the problem once and for all

Sammi Fu

Published: 8:45am, 5 Jun, 2022

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Chief executive-elect John Lee Ka-chiu has pledged to prioritise solving Hong Kong’s deep-rooted housing crisis during his term. To solve it, it’s necessary to first understand how the problem came about.

There are three main aspects – first, soaring property prices and a lack of affordability for middle- and low-income residents; second, insufficient supply of public rental flats for grass-roots residents; and third, very limited housing options for residents who are waiting for public housing.

Since the early 2000s, Hong Kong has gradually developed a “real estate hegemony”, in which wealth and influence are increasingly concentrated in the hands of a few property tycoon families.

In the early 2000s, in the wake of a property market crash, the government re-evaluated its role in the real estate market; it suspended regular land auctions, stopped building subsidised housing under the Home Ownership Scheme, and abolished rent control and measures to curb property speculation.

While these policies led to a recovery in property prices, the government failed to keep up with public housing development. In addition, the suspension of the Home Ownership Scheme changed the focus of the housing market from public to private. Thus, the continuous surge in property prices has made the housing market hugely unaffordable for regular citizens.

It’s long been accepted that the government must take drastic measures to solve this problem. Lee has proposed invoking the Land Resumption Ordinance to reclaim land, and coordinate the various departments in formulating targeted measures to relocate and compensate land owners.

Chief executive-elect John Lee attends a press conference in Hong Kong on May 9. He has pledged to prioritise solving the city’s long-standing housing problem. Photo: AP

According to the Housing Authority, there are currently about 250,000 pending applications for public housing. As of March 2022, the average waiting time for public housing allotment was 6.1 years, with a 4.1-year waiting time for single elderly applicants.

To increase public housing supply, the government can start by streamlining the approval process for land and housing development, to reduce the time required for land development, environmental assessment and writing reports. The establishment of a task force on public housing projects, as Lee proposed, could expedite the completion of public flats over the next five years

The government should work with private developers to coordinate reclamation works and urban planning, while the urban planning and land deeds processes can also be simplified. A proposed steering committee on land and housing supply would help coordinate all land-related developments.

Moreover, we should develop more brownfield sites, release ancestral halls for use, utilise excessive land on golf courses, develop agricultural land in the New Territories through public-private partnerships, speed up the redevelopment of public housing and develop transitional housing.

The maximum plot ratio for developments in the New Territories is only six times, which is lower than that for Hong Kong Island and Kowloon. The government should increase the development density.

In addition, 67 per cent of Hong Kong’s land is country park and green belt. The government can re-evaluate the ecological value of such land and make reasonable changes to the proportion, to balance development and conservation needs.

In addition, the Northern Metropolis plan can increase the number of residential units by 160,000 to 180,000. In the long run, the plan can be further integrated into the development of the Greater Bay Area.

06:09

Farming families ponder future under Hong Kong government’s Northern Metropolis plans

Xia Baolong, director of the State Council’s Hong Kong and Macau Affairs Office, forecast last July that Hong Kong will “bid farewell to subdivided housing and cage homes”. The central government is fully aware that cage homes need to be eliminated.

According to the 2021 Long-term Housing Strategy annual progress report, there are currently 127,100 households living in substandard housing in Hong Kong, an increase of 12,000 households over the past four years. More than 200,000 people are estimated to be living in subdivided housing. Many face the problem of rising rent, and suffer mental stress from the pressure of trying to make ends meet.

On top of that, cage homes and subdivided housing are usually located in buildings with structural problems, fire safety issues, serious water seepage and/or pest infestations. The living and hygiene conditions are appalling.

Tenancy control on ‘coffin homes’ aimed at protecting vulnerable tenants

To tackle the problem of rising rents, the government implemented a rent control law earlier this year, effectively capping the rent for the first two years of a new tenancy. However, loopholes remain in the rental arrangements. Further measures have to be brought in to eliminate these loopholes to prevent further exploitation of tenants.

Eliminating cage homes completely will take time. In the meantime, the government can formulate short-term plans to improve the living conditions of these subdivided units.

It can do so by building more transitional housing units. A recent survey shows that the waiting time for transitional housing – at three years or more – is still quite long. The government should relax the application threshold for transitional housing, so people in need can move in as soon as possible.

Solving the housing problem is the most important task in ensuring our long-term prosperity. When the new chief executive is in place, the government will be expected to learn from past experience to strategise, implement and execute effective policies to eliminate this problem once and for all.

Sammi Fu is a member of the New People’s Party’s central committee and a former Islands district councillor