Commentary on Political Economy

Tuesday, 19 January 2021


Hong Kong’s Slum Landlords Put Everyone at Risk

Tenement blocks in crowded Kowloon have driven up Covid-19 cases. It’s high time to tackle substandard housing in one of the world’s richest cities.

In Sham Shui Po, one of Hong Kong’s poorest districts
In Sham Shui Po, one of Hong Kong’s poorest districts Photographer: ANTHONY WALLACE/AFP

The Covid-19 pandemic has ravaged Hong Kong’s economy. It should also press the government to tackle an enduring stain: The reality that too many, in one of the world’s richest cities, live in informally partitioned homes no bigger than a parking space.

With stringent measures, the city kept coronavirus cases under control for much of 2020. Now, though, it is struggling to contain a renewed surge centered on decrepit tenement buildings in southern neighborhoods of Kowloon, where many low-income residents live in overcrowded conditions. Now thousands, many of them South Asian migrants, are under mandatory testing orders.

Facing The Waves

The tenement outbreak is prolonging Hong Kong's latest Covid-19 spike

Source: Bloomberg

Subdivided apartments — cubicles carved out of existing flats or buildings — are an emblem of the government’s failure to tackle the city’s housing shortage, an abdication of responsibility that has already contributed to widening inequality and rising social tensions. The waiting time for a public housing unit is almost six years, and often considerably longer for those who aren’t treated as a priority.

Hence these homes. Hong Kong’s entrepreneurial landlords never saw a need they couldn’t meet, at a price. More than 200,000 people pay extravagant rents to live in ramshackle structures with poor ventilation and makeshift plumbing and sewage systems.

Caged In

Crowded Kowloon is home to more than half of Hong Kongers living in subdivided homes

Source: Hong Kong By-Census 2016

Such residents —  and many more in unsafe housing elsewhere in Hong Kong nearing the end of its design life — have little political heft so are easily ignored, especially by an unrepresentative government that is deaf to the demands even of large and well-supported public lobbies. The virus surge in the Yau Tsim Mong area arrives as a reminder that neglecting to take care of the weaker members of society can pose a danger to the community as a whole, even the rich and politically friendly. As our Bloomberg Opinion colleague David Fickling observed last year, failure to grant the underpaid and under-employed the same protections afforded to the better off is a Covid-19 co-morbidity among societies worldwide.

Cramped quarters are fire risks. They are also the ideal environment for an airborne virus to spread. The median per capita floor area of Hong Kong’s subdivided apartments was 5.3 square meters, or about 57 square feet, according to a 2016 report by the government’s census and statistics department. That compares with a per capita median of 161 square feet for Hong Kong as a whole. Singapore’s average was 323 square feet, according to a 2015 study cited by the Economist Intelligence Unit.

Disasters have prompted action in the past. A blaze that ripped through makeshift shacks on the hillside of Shek Kip Mei on Christmas Day in 1953 sowed the seeds of Hong Kong’s first major public housing programs.  More recently, the 2003 Severe Acute Respiratory Syndrome epidemic led to changes in public health policy that served the city well, even if the current outbreak has shown how incomplete they remain. Back then, badly maintained pipes cost lives. In Amoy Gardens, a housing estate where the virus was found to have spread through bathrooms in the 48-square-meter flats, 329 people were infected, two-fifths of them residents in a single building. In all, 42 died, more than 10% of Hong Kong’s SARS fatalities.

SARS prompted the government to pay more attention to the importance of air flow in one of the world’s most densely populated cities, and it adopted a ventilation assessment system in 2006. As a result, the plan for the Tseung Kwan O new town was altered, reducing the building height and development density, cutting the projected population to 456,000 from 480,000, and introducing air corridors.

Granted, the continued existence of tenements is a more intractable challenge. The housing shortage has its roots in the post-1997 price collapse, when the government froze land supply to support the market. Since the trough in 2003, home values have risen more than fivefold to become the world’s most unaffordable. Dealing with the issue will mean reshaping Hong Kong’s political economy, which entwines the government and property developers in an unhealthy symbiotic embrace.

Bubble Territory

At nearly twice New York's average, Hong Kong homes are the world's priciest.

Source: CBRE Global Living Report 2020

So far, the government has shown minimal political will for the task. Subdivided apartments aren’t technically illegal, though it’s a safe bet that many are contravening buildings ordinances of one kind or another. 

The government’s chief proposal to address the housing crisis is the grandiose “Lantau Tomorrow Vision,” an environment-destroying $80 billion plan to build 1,000 hectares of artificial islands in the waters west of Hong Kong island that promises to be another boondoggle for developers. More sensible, and cheaper, proposals such as making brownfield sites easier to redevelop, have received less attention.

More ambition is needed. If a public health crisis won’t do it, what will?

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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