Until recently, a combination of social solidarity, government regulations and good fortune meant that Hong Kong has been able to avoid the worst of the COVID-19 pandemic. However, as cases increase and social distancing regulations return, the city’s housing inadequacy will become more glaring. Spending weeks in one of Hong Kong’s tiny apartments, let alone one of its subdivided flats, would be unbearable at best, and potentially dangerous and harmful at worst.
Home to a multitude of global firms and high-net-worth individuals, Hong Kong is one of the world’s leading financial centers. It is also one of the world’s most unequal places. The city’s rampant inequality is epitomised by its struggles with housing affordability. Due to high demand, low interest rates and constrained space, Hong Kong has been the world’s most unaffordable housing market for over a decade. The average wait time for public housing is 4.7 years, showing a clear need for a significant increase in housing construction.
The administration of Chief Executive Carrie Lam has pledged to increase the supply of housing units, yet the provision of units is actually set to decrease in the coming years. The government is the city’s biggest landlord: land sales and property-related transactions are the primary contributor to Hong Kong’s public revenues. Thus, there is little incentive to implement measures to cool the property market.
Time for a Rethink: Hong Kong's Housing Crisis
GIFT facilitated the 2017 Hong Kong Young Leaders Programme with support from various organisations, ranging from the Hong Kong Housing Authority to Habitat for Humanity. The goal was to develop a long-term solution to the housing crisis. The report took a holistic view of the housing crisis: not just increasing land supply, but also institutional changes, reducing construction costs, conducting market interventions and improving housing quality.
Responsibility for land and housing is currently divided between the Development Bureau and the Transport and Housing Bureau. This leads to confused and misaligned policymaking. The proposal recommended the creation of a new structure, where a dedicated Housing Bureau would manage all departments related to land and housing. This would lead to a more coordinated effort to manage the problem of housing affordability. A “Housing Policy Commission”, filled by a cross-section of society, would act as an independent platform to review the housing situation and oversee policy implementation.
Land supply in Hong Kong tends to be increased through reclamation projects. However, the cohort decided to look at how much land could be unlocked without resorting to reclamation. Hong Kong has a lot of underutilised land, ranging from brownfield sites, private land banks and nearly 200 vacant school premises. Particular interest was paid to the 60 hectares of land reserved for the expansion of Hong Kong Disneyland, and other land from the potential relocation of Kwai Tsing Port and other underused sites. The 2017 proposal found almost 4,400 hectares of land, which could provide roughly 2.9 million units: only 28% of this land would be enough to help meet Hong Kong’s housing target by 2046.