A steering committee led by a group of housing professionals has recently launched a consultation paper on Hong Kong’s housing plans for the next decade. Among all recommendations, the committee proposes the government to consider introducing a licensing system to better regulate and monitor safety and hygiene conditions of subdivided units. While the licensing system is meant to benefit tenants, it may bring unintended consequences which may worsen current housing problems.
It has long been argued that the Hong Kong government failed to provide sufficient housing for lower income households and needy people. As such, some of these people have to live in poor and unhygienic living places, such as subdivided units. Subdivided units refer to a residential unit that is split into two or more smaller units for domestic use to accommodate the additional housing needs of those who cannot afford to live in private housing or those who are waiting to move into public housing units.
Currently, the government estimates that there are about 66,900 subdivided flats in Hong Kong, with about 171,300 people living in them. Of these, about 46% are not equipped with essential facilities inside the unit, such as kitchen and bathroom. In addition, the living spaces are very small, with the average living space per person standing at 70 sq ft (gross). As these units are constantly overcrowded, fire and safety hazards, building maintenance and sanitation problems exist in these buildings.
Of course, safeguarding the homes and safety of tens of thousands of the city’s poorest people is unquestionably important; however, a licensing system will likely push rents higher if landlords have to meet new standards, pay for any necessary remedial work, and cover increased operating costs. Meanwhile, the government has to ensure the city has sufficient temporary housing in case tenants are forced out of subdivided units either because of higher rents or a lack of habitability. Nevertheless, the number of temporary housing units is very limited at this point and I reckon the government should wait until there are enough ancillary facilities before implementing such a licensing system.
Similar to the private residential sector, the root cause of the subdivided housing problem is due to a supply-demand imbalance in the public housing sector. As of 30 June, the number of family and elderly applicants on the waiting list for public housing stood at 118,700, while the number of non-elderly one person applicants was 115,600. However, it is estimated that Hong Kong will only have some 82,000 public rental units in the next five years. Therefore, the housing strategy for the next decade should also focus on increasing the number of public rental housing adequately so as to provide good shelter for the needy and thereby improve social stability for the city.
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