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Executive Summary

I. Increasing housing supply is the long-term solution to Hong Kong’s
housing problem. In the short term, a more effective approach lies in
revamping our current public housing model.

II. As it is, Hong Kong’s public housing, far from being cost-effective, has
failed to address residents’ needs. Mobility among public rental hous-
ing (PRH) tenants has remained low. Even after changing jobs, receiv-
ing a promotion, getting married, or having to take care of grandchil-
dren or elderly parents, unless they voluntarily give up their housing
units and rent subsidy, there is simply no way for them to move to
another unit that suits their need better. The resources mismatch
resulting from this rigid system is such that for every $1 subsidized by
taxpayers, $0.25 to $0.39 of public money goes to waste.

III. Over the last few decades, trapped in the public housing system, the
increasingly impoverished tenants and growing numbers of elderly
PRH tenants units have been hard pressed to gain wealth or unlikely
to find the incentive to wean themselves off Government assistance.
Coupled with an ageing population, this will put an ever-heavier wel-
fare burden on the Government.
IV. Recent years have seen the rising prices and rents of private housing
far outstripping the increase in median income, making homeowner-
ship well beyond the means of the general public. Sub-divided units
(SDUs) have become ever more common, testifying to the increas-
ingly abject living conditions. As the local community is divided into
the “haves” and the “have-nots”, social conflict has intensified, making
effective governance even more of a challenge.

V. The three future objectives of housing policy are as follows:

i) Home ownership first, wealth gains later: Enabling citizens to gain
wealth through subsidized homeownership.

ii) Enhanced efficiency and better use of resources: Increasing the value
of public housing units through gradual marketization and recovering
part of property prices to ease the long-term strain on housing and
welfare expenditures; and
iii) Less polarization and a more unified Hong Kong: Bridging the gap be-
tween the haves and the have-nots, building a harmonious society,
and unifying Hong Kong by helping aspiring home owners to realize
their dreams.

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