Public and Affordable Housing
Hong Kong is distinguished from the other Asian dragons by having a large and successful public housing sector, akin to British council housing. From its early days as a replacement for informal slum housing in response to a devastating fire in 1954, public housing has progressively expanded quantitatively and raised the quality standards of its stock as well as supporting the expansion of industry, the redevelopment of slum areas and the extended urban footprint in terms of new towns. Public housing has at times accounted for up to half of new development.
With free land provided from the state’s land bank of raw, redeveloped or reclaimed sites, and building fairly small units at high densities, the public housing authority have been able to provide rental housing on a self-financing basis that is affordable to the lower-income population (those for whom private renting would be unaffordable) (Chiu 2008, p. 72). The share of public housing is relatively high in Hong Kong at 36 %. Furthermore, it is claimed that the volume of provision has been sufficient to exceed an official target ‘waiting time’ of three years to gain access to such housing.
Since the 1970s, a second strand of subsidised affordable housing has been promoted in the form of the ‘Home Ownership Scheme’ (HOS), a subsidised build for sale scheme with associated indirect assistance with mortgage insurance and funding of deposits, which now accounts for around 12 % of households. The scheme entails purchasers buying typically a 60—70 % share of the equity, and has been popular with buyers, although lobbying by the private development sector led to the scheme being suspended for a number of years after the 2003 recession. It is interesting that the HOS appeared to be a source of subsidy for public housing, which suggests that it could more than ‘wash its face’ as a selffinancing activity, given access to free (serviced) land. There is a clear parallel here with the role of low-cost home ownership (LCHO) in the mix of affordable provision in the UK, where it has also been clearly seen as a source of cross-subsidy by social housing providers. This kind of home ownership-oriented subsidy has been the dominant form of intervention in Singapore, and also quite significant in other Asian dragons as well as in mainland China.