Think Getting an Apartment in New York Is Tough? Try Hong Kong
WHY YOU SHOULD CARE
Because the wait for public housing here is longer than it’s been in nearly two decades.
By Ben Halder
Applying for low-income public housing is rarely a walk in the park, but in Hong Kong, a city already bursting at the seams thanks to limited usable land and soaring real estate prices, the process is better described as a crawl. Across the East China Sea, winners of Japan’s welfare housing lottery generally wait five months to a year for a unit to be allocated. In the U.S., the latest report from the National Low Income Housing Coalition — a welfare housing association — puts the average waiting time for public housing at 1.5 years. London is a mixed bag, with vastly different figures reported from council to council, but across the city, 56 percent wait less than a year for social rental housing.
Singapore has developed an internationally lauded public housing system in which 80 percent of the population live in state-managed accommodation; those who can’t afford rental rates are provided with heavily subsidized units. The success of the city-state’s approach is often used as a contrast to the struggles in nearby Hong Kong. According to a May report by the Hong Kong Housing Authority:
The average wait for public rental housing in the city has reached 5.3 years, the longest in 18 years.
“Insufficient, ineffective and outdated” is how 29-year-old Hongkonger Abi Chui describes the current system. Having helped her mom begin the application process last year, Chui expects it to take three more years for her mother’s claim to be accepted, then another two years before an apartment is allocated. “I think the concept is great,” she says, “but the system doesn’t work for Hong Kong today because there are too many problems associated with housing in the city.”
The prospects for Hong Kong’s seniors are a little less dire. But with an average wait of 2.9 years for the city’s elderly, it puts huge pressure on their children to carry the burden. According to the 2016 by-census — limited research conducted halfway between the once-a-decade census — 48.5 percent of over-65s in Hong Kong live with their children. There are strong social and cultural reasons for this, but the struggle for public rental housing (PRH) doesn’t help.
Each year only 7,000 apartments re-enter the system due to a change in tenant circumstances.
The debate around repurposing recreational land for residential use has been raging for years, and usually circles back to 420 acres of land in northern Hong Kong currently occupied by the Fanling golf course. The subject has sparked several public protests. Hong Kong Golf Club, which operates the course, has vowed to challenge in court any plans to repurpose the site. With huge multinationals like KPMG and HSBC among the club’s corporate members, any decision that affects the course is likely to be subject to judicial review, allowing public entities to question government decisions in court. According to research by the South China Morning Post, one of the plans put forward could use one-tenth of the site to build 5,000 to 6,000 housing units. Estimates indicate that the whole site could accommodate 13,000 apartments.
Third-party organizations can help, to a degree. In July, the Hong Kong Housing Society, a not-for-profit housing association, opened applications for 200 new public housing units — and more than 1,340 families applied to fill them. One option is to free up a greater number of existing units by targeting tenants who abuse the system and continue to claim public housing long after they fail to qualify for it. Each year only 7,000 apartments re-enter the system due to a change in tenant circumstance, including the successful eviction of those abusing the system. This amounts to about 1 percent of total units.
“The income and asset limits for requiring a ‘well-off’ household to vacate their PRH are still quite lenient under the revised policy [introduced in October 2017],” says Betty Yung, a visiting fellow at City University of Hong Kong. There are ways of working the system to make it look like households are below requirement. “Some ‘well-off’ households may make applications for the deletion of young, working household members from the tenancy of public housing so that their family income and assets will not exceed the limits,” she says.
The incredible demand for real estate is putting increasing pressure on housing authorities. In December 2017, the government announced it would fall 43,000 short of the 280,000 additional PRH units planned by 2027. For those left out in the cold, the alternatives are gloomy. Many Hong Kong families have been forced to live in subdivided apartments only slightly larger than the average American bathroom. At the start of 2018, more than 210,000 people resided in these units — and with demand for public rental housing unlikely to abate anytime soon, these tiny units are likely to be the only option for an increasing number of Hong Kong’s residents.
- Ben Halder, OZY Author Contact Ben Halder