26 October 2016
Lai Tak Tsuen near Causeway Bay is considered to be a 'king" in public housing estates due to its convenient location, spacious units and harbor view. Photo: Billy Yellow
Lai Tak Tsuen near Causeway Bay is considered to be a 'king" in public housing estates due to its convenient location, spacious units and harbor view. Photo: Billy Yellow

Public rental flats: Why the queues will only get longer

In mainland China, living in a public rental home is not something that people will boast about, even though many are forced to live in such units.

The reason why people tend to keep it a secret is that public housing tenancy comes with the stigma of being poor, leading to all sorts of discrimination.

A mainland woman, for instance, wouldn’t want her daughter to marry a guy who lives in a “cheap rent flat”.

Demand for the units has also been falling as most such estates are built in remote locations outside cities, with authorities reluctant to allocate or rezone prime plots for low-cost housing.

Now, look at the situation in Hong Kong, where the picture is totally different.

With property prices way beyond the reach of average citizens, and living in cramped spaces a stark reality in the city, there is a mad, open scramble for cheap public rental units here.

Those who get allotted a public rental home are considered lucky. Compared to Hongkongers living in shoe-box sized, subdivided flats, residing in a public rental home is seen as a boon.

Now, let us look at all the tangible and intangible benefits if one grabs such a home in the city.

Government statistics show that as of end-March 2014, rents of public rental homes built by the Housing Authority ranged from HK$290 to HK$3,880 (US$38-500) per month, with the average at about HK$1,550.

The Housing Department’s revised income and asset limits for flat application, meanwhile, is set at no more than HK$21,050 per month and HK$417,000 in total assets for a three-person family.

Excluding the rent, it’s likely that an average family living in a public housing estate may have in hand between HK$10,000-15,000 left at their disposal for other expenses.

That is not bad at all considering that it’s not uncommon in Hong Kong for rentals or mortgage payments to eat up 60 percent of the monthly household income of tenants of private rental homes or grassroots homebuyers.

And, don’t forget that wavier equaling to one to two months’ rent is now almost a routine part of the government’s relief measures announced in the Budget each year. In 2013, for instance, the government paid the rent in full for all public housing tenants, totaling 710,000, in August and September that year.

The disposable income of the public housing tenants becomes evident when one looks at the array of medium-to-high range theaters, seafood restaurants and retailing outlets near the estates.

One should also note that Link REIT and the Housing Authority are continuing to build and renovate malls and shopping centers in Wong Tai Sin, Lok Fu and other districts where the majority of residents live in public housing units.

Looking at the neighborhoods, it becomes clear that the so-called “poorer families” are quite willing to spend on dining and entertainment, as they are freed from the heavy burden of rent or mortgage payment.

In this sense, the lifestyle of some of these tenants could even be better than that of their middle class counterparts living in private housing who have to scrimp as much as possible to meet their rental or mortgage obligations.

Moreover, many public housing estates can be on par with high-end private developments in terms of size, location and amenities. The government regularly invests extra funds on public recreational facilities like playgrounds, swimming pools and libraries in close vicinity of these estates.

One example is Lai Tak Tsuen in Tai Hang, an expensive upmarket residential neighborhood near Causeway Bay and Victoria Park. Some blocks in Lai Tak have distinctive cylindrical design, and flats on high floors command sweeping panoramic views of Victoria Harbor.

Another much sought-after estate is Kwun Lung Lau in Kennedy Town.

Redevelopment by the Housing Society has added two 45-storey towers on a steep slope with direct escalator access to the nearby MTR station, and virtually all flats enjoy views of the western entrance of Victoria Harbor and neighboring country parks.

Average monthly rent at Kwun Lung Lau is capped at HK$4,300 but a similar two-bed room flat in Kennedy Town now goes for well over HK$15,000 to rent in the private market.

With all these benefits, it’s little wonder that many college graduates are now queuing up to apply for the public rental units. To meet the income eligibility criteria, many youngsters are even willing to forego high-paying jobs and accept employment at firms that offer modest wages.

This has led to some distortions in the market and fueled questions about the prospects facing our younger generation.

Is it desirable that our youth should sacrifice their career prospects just so that they would be able to have an affordable roof over their head? — This is the question that social concern groups are asking.

The debate will continue to rage, but in the meantime the queues for public rental housing will only get longer.

With 280,000 people currently on the waiting list, the government’s promise of a maximum three-year waiting time now seems like a joke.

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Newly built public housing estates usually boast sound planning with adequate retail, leisure and recreational facilities that can be on par with private developments. Photo:

The 45-storey Kwun Lung Lau twin towers in Kennedy Town command sweeping sea views. Photo: Minghong

EJ Insight writer

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