Hong Kong's Cage Homes


Hong Kong's Cage Homes


Though being a beautiful city and a place filled with wonderful attraction cites and blooming industries, it is more expensive to live in Hong Kong than anywhere else in the world. Hong Kong is ranked as the number one least affordable housing market in the world, which is 20 times the annual income for Hong Kong residents. This translates to that a household that is making  $5,0000 annually will be looking for houses that are worth over a million dollars. What this indescribable cost of living lead is cage homes, where people are living in 75 to 140 square feet spaces, which is roughly the size of a parking space. In Hong Kong, one singular apartment unit is divided up to tiny living quarters, where each unit houses about 4-5 cage homes. That is ten to twelve people to be fit into a three living room one bathroom apartment. Within these apartment units, resident shares bathroom and kitchens, and often time have to eat on their bed because there are nowhere else to put a table. 

So why are the prices so high? 
The tempted answer is land scarcity. However, this is not the case. Among Hong Kong's industrial and urban landscapes, there is still a lot of green space that surrounds high-end mansions. Hong Kong's government land-use data suggests that 75.6% of Hong Kong 's land is undeveloped. The problem with Hong Kong's insane house prices is not related to land scarcity but has everything to do with poor management. According to government data, 3.7% of Hong Kong's land is high-density urban housing. The problem of the insane cost of housing has nothing to do with land scarcity but everything to do with poor management. In fact, the government owns all of the lands in Hong Kong and leases to developers by an auction. The developer with the most bid gets the ownership of the land for a 50 year period. To make up for their bidding costs, the developers charge insane about of money for their housing. 

Another reason for the high cost of housing is taxes. The Hong Kong government poses low corporal and sale taxes, which makes Hong Kong an amazing place for businesses. However, to make up for the lower taxes, the government obtain their money elsewhere, specifically through land sales. 
Land sales make up 30% of Hong Kong's public financial income. Though Hong Kong retains the title of the freest economy in the world, the burdens to retaining such title are passed down to the people.



Comments

  1. AnonymousMarch 21, 2019 at 3:18 PM

    Interesting post, Austin! I knew that housing was scarce in Hong Kong, but not to the extent where people were living in cages. I wonder why the Hong Kong government is prioritizing income and money above the living conditions of their people—perhaps because they're still trying to build up the region's infrastructure and reputation in the world? I read that this rise in housing costs is mainly due to the influx of rich, Mainland Chinese citizens into Hong Kong. By increasing income inequality, those at the bottom of the ladder (workers, laborers) are forced to face lower standards of living with their limited income. And despite the high rates of pest-transmitted diseases and respiratory problems within the citizens of these "cage" homes, there's a waiting list of over 200,000 people trying to find public housing!

    Source: https://allthatsinteresting.com/hong-kong-housing-crisis

    ReplyDelete
  2. AnonymousMarch 26, 2019 at 8:45 AM

    I'm curious to know if it is working well for their economy. The fact that it is 30% of their financial income seems like a large proportion, but I wonder how that ranks up to the competition. If they were to rectify housing prices would it come back to its citizens somehow in another way? Could it cause an economic crash?

    ReplyDelete
  3. AnonymousApril 3, 2019 at 9:15 AM

    It is not a secret that Hong Kong has the most demand for the housing, but due to the scarcity in the land, it has the low supply. There is not much of livable land in Hong Kong. In addition, the supply of housing in Hong Kong is controlled by the government. This means that half of the housing is only provided to low-income families, and for those who don't qualify for low income families, the supply of the housing is only half of the private market. Ultimately, it creates a competition among buyers and raises the housing price even higher. Another reason why Hong Kong housing is so expensive is that due to its approximate distance to Mainland China, Chinese developers got into Hong Kong's real estate business, and as a result, they raised the private market price through paying a much higher price in buying the land in which this price later got distributed into the higher price for buyers in order to compensate the high cost in the construction.

    Source: https://www.cnbc.com/2017/04/09/heres-why-hong-kong-housing-is-so-expensive.html

    ReplyDelete

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