“Why not just bury us in coffins and be done with it?” is the headline of an article posted in the Hong Kong English journal South China Morning Post in October 2016 by journalist Yhonden Lhatoo, despairing at the tiny houses that property developers in Hong Kong have produced to profit from at the expense of humanity. People love talking about and dreaming about their existing or future homes because it is so important for people to feel secure and comfortable where they live. As a practising interior design professional involved in creating people’s homes and large-scale residential development work, I can truly empathise with that. Achieving that dream home is the aspiration of both rich and poor. That is why housing affordability is a constant concern in many developed and developing countries.
In Singapore, this has been a hot topic since the beginning of this decade, but the real impacts of housing affordability and quality of housing are especially felt in Hong Kong. In this article, I draw comparisons between Singapore and Hong Kong to discuss the economic and social impacts of housing, the quality of housing and some lessons to be learnt, including why government policy and management of affordable housing is so important to the well-being and happiness of its citizens.
HOUSING CRISIS: AFFORDABILITY AND AVAILABILITY
I have regularly visited Hong Kong for many years and have long admired its people’s determination to succeed and prosper. The infrastructure projects connecting the city to its international airport hub on the island of Chek Lap Kok and to the future Hong Kong–Zhuhai–Macau Bridge is nothing short of outstanding and visionary. However, in the past few years, despite the gleaming towers of commerce in the city skyline, I was astonished at the poor conditions of the footpaths and roads at the street level in many parts of the city—especially in Central—which was not befitting of a global metropolis such as Hong Kong. The crumbling and deteriorating infrastructure at the pedestrian level is a metaphor of what is actually happening to the city at its lowest socio-economic echelons. Hong Kong is facing its biggest crisis in housing affordability in recent history. A significant number of its citizens live in desperate housing conditions despite Hong Kong enjoying one of the highest GDP per capita in the world and being listed in the top 20 in 2016 by the International Monetary Fund (IMF).
It begs the question, what have they done? Or more importantly, what have they not done? Unlike Singapore where land is utilised and managed carefully due to its limited supply as outlined in its Concept Plan Review on Land Allocation report (December 2000),Hong Kong has not optimised its more generous land supply properly and should have conceived a more well-considered plan. The Hong Kong Government’s most important goal is to come up with a longterm strategy of its land use. The acute lack of supply of public housing coupled with the slow release of private housing, compounded with the allegation from the public that private developers are hoarding large land banks to keep prices artificially high, are major contributing factors to this housing affordability crisis.
THE SUBDIVIDED FLAT
From the lack of housing supply emerged the subdivided flat. These units are often derived from subdividing an existing larger flat and offered for rent to the poor by private landlords.
According to a survey by Platform of Concerning Subdivided Flats, a nongovernmental organisation (NGO) in Hong Kong, at least 2.6 persons lived in flats measuring an average of 132 square feet (12.26 square metres). This equates to 60 square feet (5.57 square metres) per person, which is 15 square feet (1.39 square metres) less than the minimum in public rental housing. According to the local journal Wen Wei Po, an individual cell in Stanley Prison is about 80 square feet (7.43 square metres). The major concerns about subdivided flats include adverse impacts on the occupants’ mental well-being, physical health and safety. Data obtained by another NGO, Society for Community Organization, found that the internal temperatures of these units could be far hotter than the outside temperature due to the lack of or non-existing natural and/or mechanical ventilation. Lack of hygiene, due to water seepage occurring from improper alterations and addition works to plumbing works for kitchens and bathrooms, is also a major concern. Due to cramped living conditions, conflicts occur among occupants who are competing for space. Also, occupants tend to become more introverted and less sociable as living in these conditions lowers their self-esteem. Apart from occupant density, safety issues arise due to the potential adverse effects of unauthorised structural alterations and narrow corridors in the event of fire.
While the subdivided flats are taken up by the poor due to accelerated rents in Hong Kong across all housing types, there are reports that this housing concept is even available in wealthy middle-class areas such as Mid- Levels, although in much better conditions.
THE RISE OF THE NANO APARTMENT
While the subdivided flat is not a new trend as it has existed for decades in Hong Kong, the trend in the past five years is the emergence of the nano apartment developed by the private sector, measuring less than 200 square feet (18.58 square metres). An evolution from the micro apartment or shoebox flat, this worrying trend of the nano apartment has seen units shrink even more.
Take for example the nano apartment currently being developed in Happy Valley, Hong Kong, in 2017 by private developer Emperor International Holdings—at approximately 120 square feet (11.15 square metres) in size and with a basic living space of 61.40 square feet (5.70 square metres), it is about the size of a car parking space. These apartments are so small that the locals refer to them as ‘mosquito flats’.
So what does it feel like to live in 50 square feet, less than half the space of a parking lot? Chun Wo Property Development’s TPlus apartments in Tuen Mun will set the Hong Kong record—and quite possibly a world’s first—for its Lilliputian-size apartments when they are completed in September 2018, as reported in the journal South China Morning Post (23 December 2016). Sizes start from 128 square feet in the 356-unit complex. After deducting the space set aside for a balcony, a toilet and an open kitchen, the owner will be left with 50 square feet of living space, according to Jones Lang LaSalle’s(JLL) managing director and head of capital markets Joseph Tsang. Each of the 52 parking lots in the complex, at 134 square feet, will be larger than the apartment itself.
On Hong Kong Island, the record belongs to Henderson Land’s One Prestige apartments in North Point. In September 2016, a buyer paid HKD3.9 million for a 163-square-foot unit.
Nano flats are all the rage in Hong Kong, as average home prices have soared beyond the reach of the average salary earners, prompting developers to scale down unit sizes. As many as 5,000 of the small flats are in the pipeline every year until 2019, almost triple the average in the past decade, according to a projection by JLL.
LEADING FROM THE HEAD AND NOT THE HEART: CORPORATE SOCIAL RESPONSIBILITY
While I admire the business acumen of Hong Kong people, I find that Hong Kong leads by the head and not the heart. I do not believe that putting people first instead of profit are as mutually exclusive as some people may think.
In our interior and architectural design practice, we work with many leading property developers throughout the Asia-Pacific. As consultants, we have a responsibility to ensure that we continue to educate our property developer clients about giving superior and innovative products that attract people.
At Cameron Woo Design, when we meet with new clients, we share with them that our mandate is to create desire: to produce something that people crave to have. Some property development clients are actually surprised to learn this, as they have not actually dissected what this actually means. Even though the statement is simple, knowing how to achieve this objective is not. It is this knowledge and expertise that we have that is our core competency.
I like to remind property developer clients that providing homes, and not just habitats, for people lasts for a very long time. Therefore, a property developer’s legacy is left for society to see and judge. For that reason, the business of creating homes carries not only a social responsibility for creating communities, but also long-lasting memories associated with one’s brand and reputation.
THE SHRINKING HOUSEHOLD
Like Singapore, there is no standard for minimum living space in Hong Kong prescribed by the government for private housing; whereas, there are specified minimum living space metrics for public housing prescribed by the governments in both cities.
In Singapore, the Concept Plan Review on Land Allocation report in December 2000 from the Ministry of National Development recognised that while household sizes are to reduce from four to three persons per household, Singaporeans want to live in more spacious homes. Based on the latest data available from the Singapore Department of Statistics, the average household size in 2016 is 3.35 persons. Therefore, the space standard for new high-density public housing is increased to 40 gross square metres (31 net square metres) per person, except in the New Downtown area.
In comparison, the allocation standard for public housing prescribed by the Hong Kong Housing Authority is no less than 7 net square metres per person, or 22 per cent of Singapore’s standard. The Hong Kong Census and Statistics Department projects that average household size for the next 30 years from 2016 would fall from 2.8 to 2.7 persons. Therefore, the equivalent public housing sizes between Singapore and Hong Kong for a three-person household are about 93 and 21 square metres respectively, with Singapore’s public housing unit being more than quadruple in size compared to its Hong Kong equivalent.
QUALITY OF HOUSING
Although prescribing minimum area calculations per person are important, I do not believe this should be the only or most important metric when determining high density housing. The quality of space is what I often talk about with my clients beyond quality of materials and finishes. People often think about their homes in terms of the space contained within four walls or the shell, when in fact, it is also about the community, facilities, amenities and environment.
Just think about cultures where people lived in small spaces but in communities in their natural environments, like the Native Americans, Inuits (Eskimos), traditional Mongolians and Australian Aborigines. Of course, I am not making a direct comparison of past traditional living to modern urban living, as that would be wrong, but it is more about the concept of what makes a home.
Undeniably, people do want space to relax and rejuvenate, but where it cannot be given for whatever reasons, the opportunity to relax and rejuvenate is still offered beyond the four walls by way of communal facilities and amenities in a well-designed environment. By understanding this, the benefits of happy people in happy built environments contribute towards social harmony and increased productivity.
GOVERNMENT INTERVENTION
Based on the Hong Kong Housing Authority’s (HA) Housing in Figures 2016 report, the average living space per person was found to be 13.10 square metres/141.00 square feet (net internal area). This was calculated by taking the average of the living space per person of all public rental households (PRH). The living space per person of each PRH household is defined as the ratio of the internal floor area of the PRH flat occupied by the PRH household and the number of authorised persons in that household.
Hence, it begs the question: is there any coincidence between the new nano apartment sizes—120 square feet/11.14 square metres to 150 square feet/13.93 square metres—offered by private developers and the average living space per person of 141 square feet/13.10 square metres, as calculated by the HA? While the government has not explicitly encouraged the trend in tiny flats, it has not enacted any planning controls to discourage such developments either. Either way, the government needs to act. The implementation of applying additional stamp duties with loan limits and steep down payments with the intention of restraining increasing real estate prices has essentially failed. This is largely due to buyers competing for the limited private housing supply available and the fear that prices will continue to rise drastically.
It seems odd to me that the minimum area allocations per person apply only to public housing planning policies in both cities. There are many other countries that have minimum area allocations per person in their planning policies for housing, such as the United Kingdom. I think that it should apply to both private and public sectors for medium- and high-density housing. Without this planning compliance, it implies that the private sector will produce well-designed medium- and high density housing for sale. Unfortunately, the examples given here demonstrate that this expectation is not met.
AFFORDABILITY: THE QUANTUM SUM CONUNDRUM
Some supporters of these tiny apartments in Hong Kong have argued that the availability of these units is positive because it makes it affordable for people to purchase homes; it helps increase supply to meet the government’s target of private housing supply; and tiny apartments are a fact of living in global cities like New York City. However, for many people living in these global cities, it is normally at a stage of life whereby one is living in a tiny apartment as a student or single person starting one’s career. Moreover, there are options available for New York residents to live elsewhere in New York state or nearby in less expensive New Jersey.
Anybody seeking to buy a decent-sized home in Hong Kong is not left with very many options, since prices have outpaced income growth and soared beyond the reach of average earners. For people in Hong Kong, apart from public housing, which is in acute shortage, the nano apartment is final. There are virtually no reasonable options available for purchase due to affordability other than to buy small, buy old or buy far away. Many young residents are resigned to the fact of never being able to afford their own homes, or think that it is better to own a nano flat than renting a decent-sized flat forever.
Hong Kong’s average apartment prices stand at a record 19 times gross median income, according to a January 2017 survey by United States-based Demographia, which defines any region with median multiple higher than 5.1 as ‘severely unaffordable’. Hong Kong banks deem mortgage repayments exceeding 50 per cent of one’s monthly income to be unaffordable, while research shows that—on average—tenants of subdivided flats pay 40 per cent of their monthly incomes towards rent.
AVAILABILITY
From 2011 to 2016, applicants for Rental Public Housing (RPH) increased by more than 170 per cent from 89,000 to 151,000. From 2016 to 2021, there will be an increase of 8,000 rental public housing units from a present 63,000 units in 2016 to 71,000 units in 2021—only a 12 per cent increase, according to the HA’s Housing in Figures 2016 report.
Based on the Hong Kong Government’s Long Term Housing Strategy dated 16 December 2016, the Hong Kong Government adopted a housing supply target of 460,000 units for the 10-year period from 2016/17 to 2025/26, with a public/private ratio of 60:40. Therefore, it aims to provide 180,000 units (18,000 per year) supplied by the private sector and 280,000 (28,000 per year) units from the public sector. However, this supply target is already short by 16 per cent—or 44,000 units—as disclosed by Hong Kong’s Secretary for Transport and Housing, Professor Anthony Cheung Bing Leung, in December 2016.
In fact, Our Hong Kong Foundation, a think tank headed by former Hong Kong Chief Executive Tung Chee Hwa, found that public housing would fall short by 30 per cent. Their study found that the supply of private housing would meet the government’s target of 90,000 in the next five years, but only 100,000 public housing units are expected to be completed by 2020 which represents only two-thirds of the government’s target of 140,000. This finding is supported by the Transport and Housing Bureau’s estimate of 97,100 public housing units that would become available in the next five years. The think tank explained that the reason for the shortfall in the number of completed public housing units in the first half of the government’s 10-year strategy is due to delays arising from land use rezoning.
HOME OWNERSHIP
According to the Hong Kong Census and Statistics Department’s Population and Household Statistics Analysed by Council District report published in March 2017, only 50.40 per cent of households on average are owner-occupied, in contrast to 90.90 per cent of owner-occupied households in Singapore as shown in April 2017 by the Singapore Department of Statistics. From the same reports, 45.90 per cent and 80.00 per cent of households are public housing in Hong Kong and Singapore, respectively.
HA, Hong Kong’s equivalent of Singapore’s Housing & Development Board (HDB), offered the sale of public housing through its Home Ownership Scheme (HOS) due to the rapidly rising house prices in the lead-up to the handover of Hong Kong from Britain to China. However, after the handover in 1997 as well as due to the Asian Financial Crisis in 1998 and the subsequent SARS epidemic in 2002, where house prices plummeted, HA changed its focus to providing Rental Public Housing (RPH) instead for low-income citizens. Since that time, HOS was essentially suspended and the government practised a strategy of minimum intervention in the property market. Although the property market in Hong Kong dropped again in 2008 due to the Global Financial Crisis, it rebounded boldly post 2009 and sharply increased since then. HA failed to keep up the supply of public housing for both its low-income and sandwich classes (lower-middle- to middle-income groups) during this time.
In his policy address in January 2013, the immediate Chief Executive Leung Chun-ying stated the government’s guiding principle with regards to housing as follows: “Some people believe home ownership is not the only way to meet accommodation needs: it can be met just as well by rented flats. But I believe that home ownership by the middle class is crucial to social security. The government is therefore determined to uphold the principle of assisting grassroots families in moving into public housing and middle-income families in buying their own homes.”
STRATEGIC PLANNING
As aforementioned, a major roadblock in making land available to develop is due to the politics of land use from both community and commercial parties with vested interests, including red tape in town planning. However, the real reason for this is the lack of a complete and agreed land resource allocation and urban planning management plan that is to be enforced by the government.
Singapore’s Master Plan 2008, developed by Singapore’s Ministry of National Development, regularly reviews opportunities to optimise, redevelop and reclaim land. Such a strategic plan needs to be reviewed regularly to incorporate new social and technological changes in society.
Currently, the Hong Kong Government is preparing a blueprint for the development of the city beyond 2030 titled Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030, a large-scale planning study on how the city should cope with its growing population, which is expected to hit 8.47 million by 2041. Its last similar study was in 2007.
When it comes to housing policy and strategy, Singapore’s model of providing a high-quality and standard of affordable public housing available for rental and ownership to its lower-income and middle-class citizens, respectively, is an excellent example for many. Its management and planning of a global city is also well-admired. This stems from the Singapore government’s constant review and execution of its strategic Master Plan. Notwithstanding, like Hong Kong, Singapore has made mistakes too. An important example of where this occurred is when it underestimated its economic and population growth, and hence delayed the roll-out of important infrastructure and facilities. This caused much unhappiness among its citizens. As a result, nationalistic feelings and xenophobia emerged, playing into local politics in the first half of this decade.
CONCLUSION
The Singapore model of public and private housing based on its strategic Master Plan demonstrates that some government intervention and regulation is required. To achieve a balance between public interest, social inclusion, profit and commercial feasibility in both cities, it is necessary for governments to continually review its policies to innovatively manage its limited land resources due to social, economic and technological shifts in society.
Quality of housing especially relates to the physical health and mental well-being of its occupants. It is important to remember that people strive their entire lives to own a place to call home, where they feel safe and comfortable because it is their sanctuary. It is interesting to note how some people shared their experiences of living in both cities as expatriates on online forums by using the garden and jungle similes. Some people compared living in Singapore to being in a garden and Hong Kong to being in a jungle. The garden (Singapore) is cultivated and managed, whereas the jungle (Hong Kong) is free and wild. Civilised societies exist in a man-made framework for the benefit of its people, whereas the ‘law of the jungle’ is an oxymoron not applicable to any civilised society.
CAMERON WOO
Cameron Woo, founder of Cameron Woo Design (CWD), is celebrated as one of the world’s top interior designers. His firm has been featured in the interior design bible, Andrew Martin Interior Design Review, the Oscars of the interior design world, and has won multiple awards from the International Property Awards, London for World’s Best Interior Design, Asia Pacific’s Best Interior Design and for Singapore. CWD’s clientele include many of the world’s leading property developers such as Kerry Properties, Swire Properties, CapitaLand Residential, Ho Bee Group and Mulpha International.
Cameron Woo has been invited to speak at international interior design conferences such as 100% Design, China International Interior Design Cultural Festival, One to One with World Class Designers and Hong Kong International Lighting Fair. He is also the Chair of the Industry Development Programme for the Interior Design Confederation of Singapore (IDCS).
CWD has collaborated with some of the world’s largest consumer and prestige brands such as Dulux, Louis Vuitton and Philips Lighting. Cameron Woo is a panellist on Akzonobel’s Colour Futures and is currently a guest judge and mentor on the hit international interior design reality television show The Apartment (Season 5), with 11 million viewers in Southeast Asia alone.
