23 October 2016
Despite poor conditions and soaring rents, sub-divided flats are the only option for several Hong Kong residents.
Despite poor conditions and soaring rents, sub-divided flats are the only option for several Hong Kong residents.

What’s the way out for sub-divided flat tenants?

In a joint operation on April 29, Hong Kong’s Buildings Department and the police busted two units that contained 21 sub-divided flats at an industrial building in Tsuen Wan. A total of 15 households were evicted and became homeless.

Later, members of these households and their supporters went to the headquarters of the Buildings Department in Mongkok to protest against the eviction and to demand immediate relocation. After hours of negotiation representatives of the department promised to relocate them to a temporary shelter in Tuen Mun.

However, given the poor living conditions at the shelter, the evicted tenants then decided to stage a sit-in to ask for a meeting with the director of the Buildings Department.

Although the government is justified in demolishing illegal sub-divided flats, it is also imperative that the affected tenants are rehomed properly, and those who are eligible for Public Rental Housing (PRH) flats should be helped to move in promptly.

But the fact is that when the government demolishes illegal sub-divided flats, the affected tenants are not always taken care of. The reason: from the point of view of the administration, it is their fault to rent these illegal flats, and therefore it is not the government’s responsibility to provide housing to them.

All the Buildings Department would do is arrange for them to move into temporary shelters, where they can only stay for a maximum period of three months, after which they will be left to their own again.

The majority of these evacuees are likely to return to illegal sub-divided flats since it is the only kind of accommodation they can afford.

This vicious circle in which people continue to move back into sub-divided flats after being evicted is a cause for concern.

According to a survey conducted by the Society for Community Organization, almost 40 percent of the tenants of sub-divided flats have been forced to move at least twice in the past three years, mainly due to soaring rents, which are up by an average of 16.7 percent year-on-year.

The average rental price per square foot for a sub-divided unit in Tsuen Wan has already hit somewhere between HK$38 and HK$48, far exceeding the average rate of HK$32.8 of the top 100 private housing estates across the city. But for tenants who cannot afford any other form of accommodation, they have little choice.

Given that the government is unwilling to reintroduce rental restrictions, and housing supply continues to fall behind demand, it is no wonder that illegal sub-divided flats are booming in the black market.

In order to stem the skyrocketing rents in Hong Kong, the government must waste no time in reintroducing rental restrictions and setting limits on rent increase.

Meanwhile, while the government is outlawing sub-divided flats in industrial buildings, it must also formulate a set of relocation policies to ensure that those living in illegal sub-divided flats won’t become homeless.

For example, the government can build more Interim Housing Estates and PRH flats for sub-divided flat renters who lose their homes. Moreover, authorities should refine our property rental market by providing more information on rental vacancies through the Housing Society and NGOs in order to foster market transparency.

Also, the administration can adopt measures to provide incentives for landlords to rent their properties out at a lower rate in return for tax allowances or lower property taxes.

Meanwhile, social enterprises can continue their efforts to team up with conscientious landlords and help them refurbish their aged properties so that the units can be leased out to families with urgent housing needs.

This article appeared in the Hong Kong Economic Journal on May 5. [Chinese version 中文版]

Translation by Alan Lee

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Secretary of Community Development Alliance

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