Date
22 October 2017
Housing supply must be increased to alleviate the city’s rental affordability crisis. One way is to increase land supply by tapping into abandoned land used as makeshift parking lots and container yards. Photo: HKEJ
Housing supply must be increased to alleviate the city’s rental affordability crisis. One way is to increase land supply by tapping into abandoned land used as makeshift parking lots and container yards. Photo: HKEJ

How we can help ‘sandwich class’ families

Although Chief Executive Leung Chun-ying has vowed to tackle the housing issue seriously since his first day in office, four years later, the housing shortage and skyrocketing rents haven’t improved substantially.

A recent study by the University of Hong Kong showed we could be in the midst of the worst rental affordability crisis this city has ever seen, and the working poor who are renting flats in the private market are bearing the brunt of this crisis.

The study showed that the average monthly balance of income and expenditures of tenant households earning less than HK$20,000 (US$2,577) a month is below zero.

Even households making up to HK$30,000 a month have on average only HK$1,000 left at the end of each month.

The truth is, even though families of the  “sandwich class” in our city are earning more than the average household income, the vast majority of them are paying almost half their income on rent.

That is because, on one hand, they don’t qualify for the public housing safety net and, on the other, are unable to buy their own homes.

As a result, although they might be categorized as middle-class by common standards, many of them are actually living in poverty, because so much of their income has gone into the pockets of their landlords.

To address this pressing issue, I strongly urge the administration to help these working poor in the following ways:

1. The administration should promptly review the income and asset limits for applying for public rental housing flats, because the limits are already way out of touch with reality in the face of skyrocketing rents in the private market.

2. The government should enforce the “well-off tenants policy” more strictly to ensure that public housing tenants who earn more than the income limit must either pay rent at market rate or move out.

3. The administration should introduce tax allowances for rental expenses and study the feasibility of turning vacant industrial buildings into “transitional housing” for lease to those in need.

4. The government should increase land supply by tapping into existing brownfield areas, which cover a whopping 1,200 hectares and which consist mainly of abandoned land in the New Territories that is used as makeshift parking lots and container yards.

This article appeared in the Hong Kong Economic Journal on June 17.

Translation by Alan Lee

[Chinese version 中文版]

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FL

Legislative councilor and head of nursing and health studies in the Open University of Hong Kong

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