Housing affordability
The affordability of housing has been a chronic problem in Hong Kong, which is multi-faceted and complex due to the fact that high property prices, inadequate supply of land, and discrimination stemming from different socio-economic backgrounds co-exist. A prime characteristic of Hong Kong’s housing market is its high price-to-income ratio, which is consistently among the highest in the world. In 2023, Hong Kong’s median multiple (median house price divided by gross annual median household income) stood at 20.8, according to the Demographic Report, which was substantially higher compared to those of the other major cities. This shows an extreme unaffordability whereby the median household income would pay over 20 years of income without spending on any other item to afford a median-priced home. From a policy angle, scholars such as Wong et al. (2022) point out that the reason for the crisis is land scarcity and how the government charges immense premiums on land sales because land represents a huge chunk of its revenue. Such scarcity is further aggravated by Hong Kong’s geographical constraints as well as its policy to preserve 40% of land as country parks. There has been extensive debate tackling the role of the government in supplying and pricing land, whereby Liang et al. (2021) argued that the government needs to be more innovative and should take an aggressive front on its land reclamation and development projects.
Another side of the problem emanates from the socio-economic context of unaffordable housing. As Li and Shamsuddin (2022) have noted, the cost of buying a house in Hong Kong has been astronomically high to such an extent that wealth inequality is rife, and social inequality also goes without saying. The predicament of owning or even renting a decent home takes on massive repercussions upon the quality of life, which in turn gives rise to smaller living spaces and ‘cage homes.’ Such a phenomenon disparately affects lower-income groups and young professionals, thereby letting loose the social tension. On the other hand, Liang et al. (2021) argue that Hong Kong’s high property prices are due to being a city’s global financial hub, which is considerably attractive for real estate investments. This view sees housing affordability as a product of global capital flows rather than simply local policy failures. The other dimension is given by the effect on the station of Hong Kong’s housing market exerted by the COVID-19 pandemic. With this context in view, Li et al. (2020) observed how property prices had a temporary decrease at the start of the pandemic, but the market quickly rebounded, which again highlighted the resilient characteristics and strong demand Hong Kong still possesses over its real estate sector despite affordability problems.
Urban livability
In 2022, according to the United Nations Population Division, Hong Kong had an urban population that was 100%, thus reiterating the need to explore the issue of urban livability within this context. Li et al. (2021) conducted exhaustive research on numerous factors impacting housing prices in Hong Kong as an important part of the city’s livability. They found that economic factors, either of supply or demand for houses, were significant influences affecting house prices, while statistics relating to demographics proved less influential. This was derived from an analysis of environmental databases in combination with census data. In contrast, transportation factors showed more pronounced effects in the short term than in the long term. Importantly, the number of hot night hours along with the Annual Air Quality Index (AAQI), nitrogen dioxide (NO2), and particulates (PM10) as environmental factors demonstrated a significant and changing impact over time on housing prices as per Li and Shamsuddin (2022).
Regarding Hong Kong land and housing issues, Das (2021) reasoned along the lines of justice and social values. Yung appositely concluded that the land policies, as led by the government, had basically been overrun with economic needs, which over time led to a housing affordability problem plus a rising inequality trend. The author was for a more holistic approach that considers social values and community needs. Galster and Lee (2020), on the other hand, examine the ability to offer houses in New Territories as a solution to the housing critiques. Their study indicated the demographic pattern, characteristic transportation connectivity, and air quality in the New Territories compared to Hong Kong Island or Kowloon Peninsula. This leads the authors to suggest that attention from the government would be more evenly distributed, taking into consideration these social and environmental factors, varying way too much across different geographic areas.
The general urban form of Hong Kong has been emerging over time, with districts experiencing differing rates of population growth. The tripling and quadrupling that characterized the New Territories at times – were facilitated by new mass transit improvements easing access into the area. In Hong Kong, despite the high residential density characteristics as well as the mass transit system that is perceived to be efficient, there still are considerable traffic congestion problems that prevail and are key factors causing adverse impacts on the livability of cities, as per Leung and Yiu (2018). The approach adopted by Hong Kong in relation to potential urban sustainable growth has been one of the debatable topics. Whereas the government’s efforts around areas like air-quality standards and water supply management have been seen as inadequate, new regulations and increased public interest have spurred increasing engagement by private sector developers (Leung et al., 2020). Engagement among the government, private sector, and civil society is deemed crucial for addressing these challenges. Integration of railway infrastructure with urban development delivered in Hong Kong by MTR Corporation and the Fair Winds Charter is one such successful example. However, concerns continue to circulate as to how effective the government has or will be in interacting with these sectors and addressing such larger issues as air quality and the wealth gap.
Background of Housing condition in Hong Kong
The issue of urban livability within Hong Kong, in particular the one related to housing, is a multidimensional challenge that is embedded within socio-economic dynamics and government policies. Of all the households in the area, flats for public rental housing number about 189,600 elderly households or 24%, according to a report by the Hong Kong Housing Authority in March this year. Besides, the proportion of owner-occupier households in Hong Kong fell from 52.1% in 2011 to 48.6% in 2021, with a sharper drop in young households owning their homes falling from 49.7% to 41.5% over the same period (HKGov, 2024). Hua et al.’s (2020) study gives a political-economic account of the Hong Kong housing crisis as he highlights how the government’s political-economic background with the global economy and government ideology impact the situation in housing worse. Chan recommended that some of the possible alternatives may be increasing the supply of public housing and setting out stable living arrangements by providing affordable prices of housing or rented flats as well as social housing.
Wong and Chan’s (2019) work mirrored similar sentiments as he specifically highlighted the implications of government land policies driven by economics. This has seen a shortage in affordable housing that would also amplify the wealth gap. Wong and Chan (2019) advocate a more balanced government strategy that accommodates social values as well as community needs in a comparatively excellent balance. According to Gou et al. (2018), they go deeper into the nano-apartment context discovered in Hong Kong, which reflects the synergy of rights, choice, markets, and regulation. The authors favor government strategies of balancing social values and community needs by offering more affordable housing options for low-income families.
Research by Lau and Wei (2018) shows that the increasingly dark outlook on the housing crisis in Hong Kong is one driven by economic forces, government policy, and social needs. One of the most noteworthy deficits felt within the youth and elderly populations is the decline in owner-occupied units, which shows an increasing amount of unaffordability cited as a barrier to residential access. Consequently, the stress on improving the supply of public housing, along with the disciplinary mechanism of the housing market, insinuates a move towards more interventionist government policies to ensure houses’ affordability and quality. Secondly, the emphasis on social values and community needs suggests an increasing recognition of the need for urban development to strike a balance between economic growth and social equity or sustainability.
Socio-economic factors
Wang et al. (2018) suggest that Hong Kong combines low government subsidies with low homeownership rates, said to be the ‘worst of all worlds.’ This is because of the government’s dependence on revenue from selling land to the private housing sector and relatively limited welfare expenses towards public housing. This model has made real estate costs go up, and living situations deteriorate in comparison to other developed economies. The divergence with Singapore’s housing model, however, is particularly telling because of its objective of the private housing configuration mainly for foreign buyers and only a small percentage of wealthy local residents, while Hong Kong’s private housing is intended mainly for local middle-income ratepayers.
Chong and Li’s (2019) findings on the socio-economic implications of home ownership in Hong Kong by the Legislative Council Secretariat highlight that home ownership has not only tangible social benefits but also a sense of community identity and socio-political stability. Nonetheless, the Hong Kong home ownership ratio plunged to a 20-year low at 49.8% in 2019, well below the benchmark of 60% usually associated with affluent economies, as per Chan (2020). But the most striking aspect of weak home ownership is a big decline among young people, where those under 35 heading home-owning families fell to 7.6% in 2019 compared to 22.1% in 1997 (Chan, 2020). The trend is being blamed on severe land shortages and worsening affordability. Moreover, the ownership rates do not present an assurance of financial security given that although a bigger percentage of the share in homeownership refers to elderly persons, many of these old families owning most of these assets are under poverty levels. Renting can, in fact, be seen as a significant alteration of the tenure landscape and the implications on wealth distribution and social mobility that could derive from it.
These studies have, in fact, portrayed the housing market within Hong Kong as a complex relationship between the government’s policies, economic landscape, and social living. These are some of the challenges facing this city and others in a similar position of high dependence on land sale for revenue and low provision of public housing, which calls for more detailed views of issues, taking into perspective the big picture with regard to the relationship between affordability of housing and ownership on socio-economic stability to social mobility as suggested by Leung et al. (2022). Confronting these challenges requires a joint effort for both reform in policies and the increase of housing supply as well as improvement in the balancing of sustainable and equitable urban development.
Hong Kong’s Housing Issue (social and community issue)
There are many reasons for housing issues in Hong Kong that plague this key social and community concern, from governmental policies to economic forces and social dynamics. Kockelkorn et al. (2022) observe that high housing prices in the city, cheesy living areas, and cruel social polarization have generated in youth a sense of disappointment. This generation is confined between the housing choices made available to the very rich and those made available to low-income groups with hardly any backup for their housing needs. Equipped with one of the world’s largest volumes of public rental housing, Hong Kong, on the other hand, has failed to tame its runaway housing crisis. The problem is attempting to find a proper equilibrium between excessive intervention by the government and allowing market forces to operate freely within a modern neoliberal economy. Its substantial role in housing through public rental and subsidized home ownership hasn’t effectively bridged the gap for the middle class, particularly the youth, affording to belong, whose affordability and accessibility remain neither here nor there.
In 2022, the Legislative Council (LegCo) characterized Hong Kong’s housing situation as characterized by a lack of affordable housing, high property prices, and a constrained land supply. First, the high demand for affordable housing is rendering the government’s move towards providing public rental houses and redeveloping old urban areas unable to meet the need. Second, it has been criticized that the public house allocation lacks transparency and accountability. Van et al. (2021) continue the discussion by adding momentum that the housing issue is not purely an economic issue but also a social and political issue. The close relationship between the government and property developers has been coupled with an inability to meet people’s needs, which has had the effect of aggravating the housing problem. According to Van et al. (2021), this poses the solution whereby the government plays a more proactive role in terms of regulating the property market and putting an assurance on affordable housing.
Modular housing can solve if proven to be effective and economical, the public housing crisis, particularly in high-land value areas such as Hong Kong and Kowloon. The same developments, however, may be more likely in the New Territories, but there is no indication as yet that prefabricated housing will increase in this area rather than high-rise apartment blocks. Dieter (2019) posits that the reliance on land sales for revenue that is supported by an attracting tax regime to foreign capital and corporations further compounds the complexity of the housing problem in Hong Kong. This creates a scenario where the only way to bring down housing prices would involve hiking taxes, an aspect that may not go in favor of these companies. Also, given that the local property market has turned into the center for people holding huge sums of money, investors, and speculators globally, houses have become unattainable for the locals.
Impact on Vulnerable populations
Among such essential demographic revolutions in Hong Kong, there is an increasing ratio of the elderly population that influences the housing policy. In 2018, the percentage included 24.6% of the entire population, which had risen in comparison to the previous years. Around 47% of elderly households living in Hong Kong were then living in public rental housing, and another 10% lived in subsidized sales flats (Legco, 2023). It is a challenge in how to provide for them in terms of housing and making the facilities more accessible to this section of the population since their contribution is significantly lower towards the economy. Some indications from the profiles show a dire need for reorientation of housing policies to meet the growing needs of an aging population. The relationship of housing with vulnerable populations has been widely researched across the globe. Leung et al. (2022) argue that poor conditions in housing can have a tremendous impact on health and remarkable fear in vulnerable groups incl, including low-income families, elderly people, as well as disabled people. The research does not only underline that bad housing can create high levels of stress, bad mental health, and an increased risk for many diseases, but also due to elements like sanitary conditions, bad ventilation, and especially overcrowding.
In Hong Kong, this situation is acute due to a constant shortage of land, high population density, and skyrocketing property prices exceeding rental incomes. According to Siu (2020), the high cost of living, which has driven housing far out of reach for many and created extreme shortages of affordable units, has consigned tens of thousands of Hong Kong residents to crowded, fire-prone, subdivided properties. This includes subdivided units and ‘cage homes’ where elderly adults and low-income lay their subsistence. Living in such a way, there are a lot of health concerns like respiratory diseases and mental disorders. The housing of vulnerable populations has also been one of those subjects about which the Hong Kong government’s approach has been studied. Wang et al. (2018) discussed Hong Kong’s public housing policy, one of the most developed policies eras globally. However, the policy is meant to provide for affordability in housing poor residents, and long waiting lists and requirements for eligibility commonly result in the burden disproportionately falling on those most afflicted. This problem is heavily represented by the elderly component of the population, as they make up a large percentage of applicants for public housing overall.
Another view comes from Li and Shamsuddin (2022), who look at the socio-political influences of housing in Hong Kong. Elements of the article bring to the fore that when people are struggling for basic accommodation and live under deplorable conditions, it creates a climate conducive to social upheaval and political turmoil. The youth, in particular, have been alleged to face considerably hostile conditions in relation to affordable housing, and this explains their feeling of being disenfranchised and socio-political activism. On the health-related impacts, a study by Van et al. (2021) looks primarily into mental health effects when occupants are exposed to poor housing conditions in Hong Kong. The research also showed a strong relationship between the quality of housing and mental health, with those staying in bad houses reporting high-stress levels and anxiety. This is especially important to children and the young, who are highly susceptible to the effects of the long-term experience of poor housing. The United Nations (UN) clings to ensuring that every vulnerable population group acquires this necessity, viewed by many quarters as one of the basic requirements in life. Access to adequate, safe, and affordable housing for every person is thus a contribution to the UN’s framework of Sustainable Development Goals (SDGs) set (Chan & Wong, 2021). This global framework zeroes on the fact that a decent home is a basic human right central to all aspects affecting general social and economic development.
References
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