"Reforming the housing policy to resolve the housing problem" (2021/07/14)

"Reforming the housing policy to resolve the housing problem" (2021/07/14)

MR YIU SI-WING (in Cantonese):

Housing is the most basic life necessity. Having a stable and comfortable home is the basis for people to plan their family life. As the saying goes, "only when people have a comfortable place to live can they work happily". According to survey reports published by a number of organizations, Hong Kong has been the world's least affordable housing market numerous times. Hong Kong people need to save up for 20 years without spending a single dollar on food and drinks to afford a home.


Between 2004 and 2020, the median household income only increased by 78%, while property prices surged by 3.9 times in the same period. Meanwhile, the waiting time for public rental housing ("PRH") shows an upward trend. As at the end of March 2021, the average waiting time for general applicants was 5.8 years. Hong Kong people are caught in a vicious cycle of "decreasing living space and escalating housing expenses".


President, I support Mr Tony TSE's motion on comprehensively reforming Hong Kong's housing policy to resolve people's housing problem. Hong Kong's housing problem is intricate, with the housing problem of the grass roots being the most difficult to solve. At present, the grass roots living in PRH account for 44.6% of Hong Kong's population. As land for housing is as valuable as gold in Hong Kong, waiting for PRH is still the best hope for people to solve their housing problem. Families which are fortunate enough to be allocated a PRH unit only need to pay a monthly rent of $2,800 for a unit with a "saleable area" of some 300 sq ft. They do not need to pay miscellaneous charges or worry about substantial rental increases. As they do not have to face the pressure of forced eviction, they tend to live there for their whole life. Even if there are new family members and their income and savings have increased, most of them are unwilling to give up their existing PRH units. One of the reasons is that the vetting for the allocation of large units is not easy to pass. The second reason is that private housing is too expensive and the supply of Home Ownership Scheme flats is limited. As a result, between 2006 and 2016, the turnover rate of private housing was 7.9% on average, but that of PRH was only 0.8%. This shows that, on average, the turnover rate of PRH is one tenth of that of private housing. Given the low turnover of PRH and excessive demand, it is no surprise that the waiting time for PRH becomes longer and longer.


President, while it is certainly important to boost supply, it is equally worthwhile to explore ways to increase the turnover of the existing 1.2 million PRH units in order to maximize their use, as the review of the policies on well-off tenants and under-occupation households in PRH and examination of the introduction of subsidized rental housing with higher rents proposed by Mr Tony TSE. The Government may introduce a ladder of swapping units to PRH to encourage tenants who want larger units to make their own choice. At present, the authorities have a similar mechanism in place, which only allows tenants to move to larger units when their families have grown in size. I think the Government can introduce a points system to select eligible tenants who want to move to larger units according to the total points they get in terms of their length of residence, household size, location, justification, etc. The rent paid by these tenants should be higher than double rent paid by well-off tenants at present. The authorities may consider setting the rent at one third of market rent, or even higher. This can gradually improve the living environment of families in PRH, providing them with a more spacious living environment without affecting PRH supply, and also increase Government revenue. Why would the authorities not do so?


Of course, any scheme should be implemented only when there is sufficient land supply. Just after the return of sovereignty, the SAR Government announced the housing policy of "85 000 units". The financial turmoil erupted afterwards put the Government under fire, prompting it to make a U-turn by propping up the market with reduced land supply and inactive land sales for at least seven consecutive years. In consequence, Hong Kong's housing supply has been tight for quite some time. Even though the Governments of the previous and current term have expedited land supply, it is difficult to rectify the long-standing situation. Land and housing problems are still Hong Kong's deep-seated problems which are hard to resolve. The Government said that it will not give up and will seek to identify land to satisfy the current and future development needs (The buzzer sounded) … but I think the Government should continue its efforts to formulate better policies.