Hong Kong housing

For winners in Hong Kong’s home ownership scheme, an affordable flat brings trade-offs

Mixed remembrance for many as public housing life fondly recalled amid fear of being forced out due to rising income

PUBLISHED : Sunday, 22 October, 2017, 4:41pm
UPDATED : Sunday, 22 October, 2017, 10:47pm

Tang Wan-hoi, 80, and her husband are new owners of a 300 sq ft flat in one of Hong Kong’s most sought after housing estates.

Tang was lucky to be chosen out of 16,200 applicants vying for 857 flats in King Tai Court in San Po Kong last December. The flats were part of a government housing scheme that sells exclusively to public housing tenants at knockdown prices.

But Tang felt no jubilation about finally being able to afford a flat in one of the world’s most expensive cities for property.

“If it had been up to me, we wouldn’t have moved here,” Tang said as she sat on a bench in an outdoor play area at the estate.

“If it weren’t for my kids and grandkids who can inherit the flat, we’d have stayed in our old public housing flat in Kwun Tong, where we have friends and everything is close by,” Tang, who just moved in a month ago, said.

If it weren’t for my kids and grandkids ... we’d have stayed in our old public housing flat
Tang Wan-hoi, new homeowner

They paid around HK$2 million for the flat, and Tang’s son and daughter-in-law, both working, pay the mortgage while living in another public housing flat.

The case illustrates how those squeezed out of the city’s red hot property market are driven to take desperate measures to secure an asset amid their housing woes, even if it means having to make trade-offs.

The Green Form Subsidised Home Ownership Pilot Scheme, first introduced in 2015, is a plan with “merits and no shortcomings,” according to Chief Executive Carrie Lam Cheng Yuet-ngor.

The city’s leader has placed affordable housing atop her agenda for her five-year term, pledging to reignite the dreams of aspiring homeowners by rebuilding the property ladder.

In her policy address earlier this month, Lam announced plans to adopt the pilot scheme and build more subsidised flats than public rental units in future.

But concerns persist as to whether substantially increasing the numbers of such flats would have any negative impact on the average waiting time for public ones. It takes time for vacated flats to be renovated and reallocated, and the average wait for most families is close to five years.

The 32-storey residential tower painted in mint green and yellow stands out from a cluster of old industrial buildings in San Po Kong, Hong Kong’s former “factory estate”.

Around a third of the residents have moved in since the flats went on sale in January, according to security guards. Although the outer scaffolding came off months ago, most of the estate lobby is still wrapped in protective covering.

For Tang, the closest wet market is at least a 20-minute walk away, a far cry from the bustling community of Kai Yip Estate in neighbouring Kwun Tong where she used to live alongside more than 9,000 others.

“It’s hard to find someone to talk to even if I come down to exercise in this park every day,” she said. “In the old estate, my husband could chat with neighbours downstairs. Now he’s only stepped out of the house once in the past two weeks.”

For most public housing tenants, flats at the estate – sold at a 40 per cent discount on market prices – helped solve an actual housing need.

“It’s actually not anything different to any other public housing flats, but that’s enough for us,” Alice Yu Ming-wai, another new resident at the estate, said. “We don’t need fancy clubhouses or swimming pools. We like that it’s simple.”

Yu, a civil servant, had been on the lookout for a flat in the private market for seven years, knowing her salary and pay rises over time would eventually make her “too well off” to continue living in public rental housing.

One of the main reasons for making the pilot scheme regular is to free up more rental flats for some 270,000 applicants now in line for public housing.

According to the Housing Authority’s well-off tenant policy, tenants who exceed established income limits are required to pay double the rent, or up to market prices. After they reach a certain threshold, tenants are required to move out. Those who own property must also vacate.

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The Housing Authority identified a total of 22,400 well-off tenants this year. An average of 210 flats are retrieved annually from these ranks.

Despite the scheme’s popularity, the authority’s subsidised housing committee chairman Stanley Wong Yuen-fai stopped short of calling it a success.

“Our concern is not about sales or whether it’s popular,” he said. “Success depends on whether the recycled units are being allocated to families on the waiting list without too much delay, and we still don’t know how serious the impact will be.”

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The pilot scheme is not due to be reviewed until next January.

Referring to the target of building 20,000 new public rental flats a year, Wong said his committee would need to discuss what portion of rental flats could become subsidised in the scheme to offer more homes for public housing tenants to buy.

“There are a lot of considerations we have to think about,” he said. “Is there sufficient demand from public housing tenants? Do they even have the financial means?”

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For 75-year-old Chan Yuet-ngor, who just moved into a bigger flat at the estate with her family, the scheme seemed like a “win-win solution for everyone”.

“The government should be helping people like us,” she said. “We get to have a roof over our heads, and we can vacate the flat for a new family in the queue. Everyone wins.”