How Hong Kong’s public housing system works: costs, waiting times and sales
- With lack of land, sky-high property prices and long waiting periods for rental homes for those with low income, relief not likely to be soon
- About 3.3 million people – 44.7 per cent of the population – live in public housing
Public rental housing estates found across Hong Kong usually comprise several high-rise blocks, with flats of different sizes. They currently house about 3.3 million people – 44.7 per cent of Hong Kong’s population.
Those who want a subsidised flat turn to the Public Rental Housing (PRH) scheme. But with about 268,500 applicants on the waiting list, it can take more than five years to get a rental flat.
In 2014 the government set a target of building 280,000 public flats by 2027, but it has since admitted it would fall short by around 43,000 homes. Meanwhile, many more are joining the queue each year. It is a situation observers refer to freely as a crisis.
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What does the public housing shortage mean for Hongkongers?
While waiting for a public rental flat, many end up living for years in squalid conditions in the cheapest private flats available.
More than 210,000 people share tiny subdivided flats plagued by bad hygiene, ventilation and lighting – conditions particularly harmful to young children and the elderly.
Last year, researchers from the University of Hong Kong found that some buildings housed up to six times the number of people they were designed for, and that such premises were at higher risk of outbreaks of fire and infectious diseases.
Such substandard living conditions are indicative of extreme income inequality. The government’s Commission on Poverty has stated that the lack of affordable housing is both a cause of and contributor to the poverty rate.
A 2017 Census and Statistics Department report showed that 20.1 per cent of the population live on or below the poverty line.
Hundreds queue for subsidised homes at 58 per cent knockdown
How do public housing rents compare with the private market?
Rents for public housing are heavily subsidised and therefore much lower than for private flats. For example, the rent for almost half the new flats at three public housing estates in Kwun Tong, Sham Shui Po and Sha Tin districts is less than HK$2,500 (US$320) per month, according to the government.
Last year, property agent Midland Realty found that 44 per cent of rents for private flats were going for more than HK$20,000 (US$2,550) monthly. The median income of Hongkongers in the first quarter of 2018 was HK$16,400 (US$2,100).
Who can rent a public housing flat?
Applicants must meet strict criteria to qualify for the PRH scheme. In general, public housing is meant for low-income earners, retirees, and those unable to work owing to disability. The Housing Authority’s online Eligibility Checker offers a guide to eligibility and streams applicants into different schemes, the main ones being for families and the elderly.
Applicants must be over 18 years old and have the right to live, study or work in Hong Kong without restriction – so those with employment visas do not count. They must not own any residential property in Hong Kong, and their assets and income cannot exceed a set sum.
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At present, single applicants may earn a maximum of HK$11,540 (US$1,500) monthly and have total net assets of HK$249,000 (US$32,000). The cap for couples is HK$17,600 (US$2,200) per month, with assets of not more than HK$338,000 (HK$43,100).
People are ineligible for PRH if they already benefit from other government housing schemes, such as subsidised home ownership.
How long must you wait to get a public rental flat?
Can you lose your public housing?
You certainly can. Tenants must abide by the terms of their tenancy agreement, and may not:
● Leave the premises vacant for more than three months
● Sublet the flat
● Use the premises for gambling or the possession of illegal substances
● Use the premises for commercial purposes
● Make a false declaration about their earnings, assets, or marital status
Anyone whose tenancy is terminated for such breaches cannot reapply for public housing for two years.
Is it possible to buy a public flat?
Yes, but competition is fierce. There are several schemes to purchase public housing at subsidised rates, the main one being the Home Ownership Scheme which allows public housing tenants and low-income applicants to buy a flat at a heavily discounted price.
In recent years, the government has been encouraging PRH tenants to buy homes with initiatives like the Green Form Subsidised Home Ownership Pilot Scheme, introduced in 2015. The scheme, which sells flats exclusively to public housing tenants, operates like a lottery. In 2017, for example, 16,200 applicants vied for just 857 flats at an estate in San Po Kong in Kowloon.
What is being done to fix the housing shortage?
The government plans to add 450,000 homes in the public and private sectors over the next 10 years to meet demand, but it says future expansion will be hampered by a lack of available land.
At the end of last year, the Task Force on Land Supply announced it had gathered major public support for eight land supply options, including land reclamation, building on agricultural land, and repurposing brownfield sites.
Chief Executive Carrie Lam Cheng Yuet-ngor wants to push forward with the East Lantau Metropolis project, a massive reclamation plan to create at least 1,000 hectares, with the potential to house as many as 1.1 million people.
The plan is controversial because critics have cited the huge cost, inevitable damage to the environment, and the time it will take to complete. No date has been set for work to start, and should it proceed, it is likely to take at least 14 years. Few expect relief any time soon for Hongkongers needing homes.