Behind the gleaming skyscrapers and multimillion-dollar homes that have made this city the world’s most expensive real estate market lies a far less attractive parallel reality: one of the world’s seemingly most intractable housing crises.
Welcome to Hong Kong, where the average home sells for well over a million dollars – and even a parking space can cost close to a million – but where more than 200,000 people have been waiting at least half a decade for subsidized public housing.
Far below the billionaire line of The Peak and its ultra-exclusive properties that routinely change hands for hundreds of millions of dollars, one in five people lives below the poverty line – previously defined in Hong Kong as 50% of median monthly household income on welfare – and many call it home a cramped living unit or even a cage in a run down apartment building.
The root cause of the problem is relatively simple, according to city officials: a chronic shortage of services that can’t meet the needs of more than 7 million residents crammed into areas that are already among the most densely populated in the world.
Housing “is high on the agenda,” stressed the city’s chief executive, John Lee, in his inaugural address in October, when he pledged to build 30,000 units over the next five years — a pledge that corresponds to an order from the central government in Beijing follows prioritizing housing spending.
But critics have long been skeptical about this Local government reliance on land premiums, sales and taxes, which account for about 20% of its annual revenue. Critics say this stream of income provides an incentive to keep supply tight, limiting the ability to address the problem.
CNN has asked the Hong Kong government if its property sales revenues and bonuses affect its housing policies, but has yet to receive a response.
Now, the recent abrupt lifting of the city’s tough anti-Covid measures has thrown a tipping point into the mix that – according to the same critics – offers a litmus test of the government’s resolve to solve the problem.
Many are now urging authorities to repurpose the massive Covid quarantine camps the city built during the pandemic to isolate hundreds of thousands of people, which currently lie empty and unused.
As Paul Zimmerman, a councilor in Hong Kong’s Southern District and co-founder of urban planning advocacy group Designing Hong Kong, put it, “Now the question is: what to do with them?”
The answer to this question is perhaps less simple than it first appears.
Alongside the world’s longest mask mandate and mandatory hotel isolation periods of up to three weeks, the camps were among Hong Kong’s more controversial anti-Covid measures and, at the time of their construction, were met with opposition not only from those who denounced what they were seeing draconian quarantine regulations.
The camps also raised hackles from government critics, who said their quick and expensive construction belied the narrative that Hong Kong’s housing problem was simply unsolvable.
Hong Kong authorities have not revealed to the public how much the network of quarantine facilities costs. However, total spending on the pandemic over the past three years has been US$76 billion (HK$600 billion), according to the city’s finance secretary. CNN has approached the Office of the Chief Executive, the Office of Security, the Office of Health and the Office of Development regarding the cost of building and operating these quarantine camps.
Public housing plans are usually subject to years of bureaucracy, but in the case of the quarantine camps, the government suddenly managed to “find” around 80 hectares of land and build 40,000 prefabricated metal units in a matter of months.
Brian Wong of local think tank Liber Research Community is among those who wonder why the government can’t take a similarly quick approach and bypass bureaucracy to solve a self-acknowledged urgent housing crisis.
Wong and others argue with the government’s accusation Dependence on land revenue risks making housing a “structural problem” that cannot be “sensibly solved”.
“Even if the government wants to make land affordable, it won’t because the stakes are too high,” said Wong, who criticizes what he sees as official indecision and inaction, which he says comes at the expense of the city’s poorest People.
He sees the empty warehouses as a litmus test of the government’s resolve to act and has called for the units to be converted into social housing, arguing that “it would be very embarrassing if these containers were left empty or wasted”.
CNN has asked the Hong Kong government what it plans to do with the former quarantine camps. It said it would announce its plans “after a decision”.
Only three of the eight purpose-built quarantine and isolation camps were actually used; the remaining five were placed on standby as vaccination rates rose and infection rates fell.
The largest and perhaps most notorious of the camps is Penny’s Bay, a location next to Hong Kong’s Disneyland, where more than 270,000 people stayed in nearly 10,000 units during its 958 days of operation, which ended March 1. A second is located next to the Kai Tak Cruise Terminal and a third near a shipping container port. The rest are scattered on the northern outskirts near the border with mainland China.
At around 200 square meters, each unit is about the size of a car parking space and contains a basic toilet, shower and bed. Only some have a kitchen.
Though the units are spartan, many argue they might still offer an attractive temporary solution for those who can’t afford the city’s high rents. In Hong Kong, even “nano-apartments” measuring 215 square feet have recently been selling for as much as $445,000 — more than $2,000 per square foot, according to real estate agency Centaline.
Francis Law, who was sent to Penny’s Bay in late 2022, said the facilities, while basic, were sufficient to meet a person’s basic needs and would provide an attractive temporary option for those on public housing lists.
“If the government rents out the units for around HK$2,000 to 3,000 a month [$254 to $382] and arranging a bus route to the nearest train station, I think it would attract many applicants even if it’s far from the central business district,” he told CNN.
While some of the camps were built on land owned by local tycoons and loaned to the government, some argue that because the units are modular and relatively easy to dismantle, they could be moved to more permanent locations – if the government so wished.
“We obviously have land in Hong Kong, we have a lot of rural areas… but what we don’t have is land that’s readily available for residential or commercial development,” said Ryan Ip, vice president and co-lead researcher at Hong Kong’s Our Think Tank Foundation.
“What matters is whether the government actually accelerates its procedures.”
Others have more creative suggestions, taking inspiration from how some of the units have been temporarily repurposed during the pandemic doldrums.
At one point, some of the units at Penny’s Bay were being used to hold a university entrance exam for secondary school students who had close contacts with infected cases. at another time the camp housed a small polling station.
Hong Kong-based architect Marco Siu is part of a group calling for the blocks at Penny’s Bay to be converted into a temporary health and wellness centre, arguing that this would require minimal transformation and give authorities the opportunity to convert it to reopen should another outbreak happen.
Designing Hong Kong’s Zimmerman said the land adjacent to Disneyland could be used to expand the theme park or repurposed into a new town.
It remains to be seen whether the government will follow these suggestions. So far, you’ve kept your intentions covered.
A spokesman told CNN: “Detailed analyzes and studies are being carried out with the relevant government offices and departments. Future plans and arrangements will be announced once a decision has been made.”
However, a spokesman for the development office added that the units at Penny’s Bay and Kai Tak are “structurally designed for a 50-year life cycle” and confirmed that they are designed to be “dismantled, transported and reused elsewhere”. .
For now, those hoping for a glimpse of government thinking at the Penny’s Bay closing ceremony earlier this month will likely have been disappointed.
A band played “Auld Lang Syne” as the gates closed and Michael Cheuk, the Under Secretary of State for Security, fitted a giant cut-out padlock to the bars.
“Penny’s Bay Quarantine Camp has accomplished its mission,” Cheuk told the crowd.
The same words were inscribed on a banner that hung over the locked gates.