2.4 Housing Need and those Inadequately Housed
2.4.1 Much has been made by many groups over the sad state of accommodation for those living in sub-divided flats and in bedspace apartments. These living conditions are just not acceptable in a modern wealthy city like Hong Kong and they should be given the highest priority. The problem can be reasonably quantified as government has a definition for those inadequately housed and has assessments as to the numbers of households involved.
2.4.2 The numbers are surprisingly low at around 115,000 households or 5% of all households. The focus of public housing eligibility should be on these households rather than on those who are adequately housed. This is explained in the tables below.
2.4.3 A focus on removing the problem for these 115,000 (approximately) households would remove the most critical issue. It is important that on rehousing the residents of the subdivide flats that the subdivided units be removed and returned to the original state so that the problem does not reoccur.
2.5 Affordability and Housing Prices
2.5.1 The government does not define housing affordability. Without a definition it is not possible to identify a problem or to solve it. Hong Kong is a high cost place to live in and it is evident that on a regular occurance all flats put for sale in the primary market are quickly sold, despite the restrictions that government has imposed to dampen demand. These demand side controls are in themselves making it more difficult for Hong Kong people to buy an apartment. It has significantly reduced sales activity in the secondary market where entrants into the property market would most likely begin. There is also evidence to show that the price of property in the Hong Kong market does nof really correlate to the supply of new flats. The trend is that there is a constant growth in property prices with a few minor fluctuations.
2.5.2 The following slide indicates that the overall expenditure on housing, including public housing, is around 35% which is reasonable in comparison with other similar cities. Some definitions on affordability in Australia and the USA use 35% as a criteria.
2.5.3 The Supplementary Data in the following table indicates a comparison between public and private housing. Here it can be seen that for public housing around 11% to 13% is remarkably low, while the private housing at 42% to 44% is relatively high. However, given the characteristics of the Hong Kong housing market, spending 45% on housing is common and accepted as affordable if wanting to live in this city.
2.5.4 The pie-chart below indicates that 75% of households are living in affordable housing. Therefore if affordability is to be a significant driver for more housing production, a clear working definition needs to be made so that it justifies the allocation of resources to resolve an identifiable problem.
2.5.3 The Supplementary Data in the following table indicates a comparison between public and private housing. Here it can be seen that for public housing around 11% to 13% is remarkably low, while the private housing at 42% to 44% is relatively high. However, given the characteristics of the Hong Kong housing market, spending 45% on housing is common and accepted as affordable if wanting to live in this city.
2.5.4 The pie-chart below indicates that 75% of households are living in affordable housing. Therefore if affordability is to be a significant driver for more housing production, a clear working definition needs to be made so that it justifies the allocation of resources to resolve an identifiable problem.
2.5.6 Administrative Measures making Housing Unaffordable
Hong Kong has a lot of restrictions on the purchase and sale of flats in the private market. These are imposed by the government and the Monetary Authority and are summarised in the following table. The need for these restrictions, especially those related to purchases in the secondary market, are a major constraint on people being able to buy a flat. These controls need to be re-assessed as to their impact on affordability, particularly on the best use of the land that is available to make housing affordable for younger Hong Kong households.
2.6 Increasing Development Density
2.6.1 In our work in relation to the NDA’s we have identified an unnecessarily low production rate in terms of numbers of flats and population capacity. Representations have been made to the Town Planning Board on this and we summarize the missed opportunities in the following table. We have not proposed major revisions to the OZP’s but mainly minor changes in development density in accordance with the Hong Kong Planning Standards and Guidelines. By these simple changes an additional 60,000 flats could be produced, making better use of the land that is going to be produced and service by infrastructure.
2.6.2 The principle must be that the production of development from the available land should be optimized within the normal planning standards that apply. There is therefore additional capacity in the NDA’s that has unnecessarily been forgone and the government should review the densities of development in a systematic way. The assumption must be that government is going to invest in the necessary infrastructure so that the best use of any new land will eventuate.