As the world’s population grows at an exploding rate, people flock to cities for better opportunities, adding housing pressures to the metropolises. Hong Kong is no exception, along with other cities like Amsterdam, Sydney and Los Angeles.
Housing experts at this year’s ULI Asia Pacific Summit, held by the Urban Land Institute in Hong Kong on Wednesday, point out that cities around the globe are all facing largely the same challenges – inflated property prices and lower home ownership rates are driving the need for public housing.
ULI has answers
In the times of globalisation, cities are hosting people from a wide range of backgrounds, and diversity is key to leading changes and advancement. Affordable housing is needed for cities to thrive.
Tim Williams, Cities Leader for Australasia at Arup, calls on addressing housing affordability. “We need to talk about where financialisation of housing has gone furthest,” he says.
According to Williams, Hong Kong and Sydney rank first and second in least affordable housing, with the median multiple of both cities standing at 19.4 and 12.9 respectively. Meanwhile, home ownership rates for those aged 18 to 39 have been sliding, down some 10 percent in 10 years’ time.
Long term earnings
Williams urges the private sector to look beyond the market value and think more of social return. “It isn’t just about morality. It’s also for macro-economic reasons,” he says. “New business models are vital. They should be less based on land risk, sales and capital gains, but more on long term income streams.”
The government has a role to play as well, Williams says. “It needs to mandate inclusionary zoning at 20 to 30 percent on public land and get less money from the private sector for higher public return.”
Bob van der Zande, director residential development for the city of Amsterdam, also stresses the need for affordable homes.
“We have had the Housing Act since 1901. That’s 118 years of social housing in place,” says van der Zande when speaking of Amsterdam. As property prices have surged 65 percent in four years, the Dutch capital is striving to build more homes through urban renewal and preservation, while keeping social housing at roughly 60 percent in the market. The Dutch have prided themselves on being a successful model in Europe with its public housing sector, where the maximum monthly rent is set at €710.68 for the lower income group.
As global leaders are calling for affordable homes, so are Hong Kong citizens, who are very much in need of them. While the Hong Kong government strives to provide more, demand always far exceeds supply.
Hong Kong solutions
The government is working to provide 2,800 subsidized homes to working youth aged 18 to 30, building six youth hostels where flats will be rented 40 percent cheaper than the private ones. The first hostel providing 80 vacancies is set to be completed in the first quarter next year in Tai Po, Chief Secretary Matthew Cheung Kin-chung wrote in his blog on Monday.
For those who have been waiting for public housing for at least three years, the government is also giving them an option to live in prefabricated units. A project that offers 90 stackable flats in Sham Shui Po is ongoing, after funding of $35.7 million was approved in early June.
But as Williams and van der Zande suggest, more must be done. Government policies should be in place to guarantee the minimum number of affordable homes, housing policymakers should have a forward-looking vision, and private sectors should think with social responsibilities and less about short-term returns – if Hong Kong hopes to stay competitive as a global city.