June 26, 2025 · 《Ming Pao》
“Public rental housing waiting time” is currently the Housing Bureau’s most important performance indicator. Over the past few years, the government has invested enormous public resources in shortening the wait, focusing on expanding public rental housing supply. It expects to deliver 110,000 public rental housing units and 30,000 Light Public Housing units over the next five years, and has built more than 18,000 transitional housing units.
However, a housing policy oriented around shortening the public rental housing waiting time is fundamentally flawed in concept and philosophy. Hong Kong now has 850,000 public rental housing units — a scale unmatched by any major city worldwide. Yet the current shortage of subsidised housing is, in fact, far more severe than the public rental housing shortage. Large numbers of citizens are unable to move up the housing ladder by buying subsidised flats, and have no choice but to join the public rental housing queue — and in order to do so, they cut back on work to meet public rental housing eligibility, artificially manufacturing demand for public rental housing. A housing policy that focuses unilaterally on building more public rental housing only treats the symptoms, not the root cause.
Today Hong Kong sees the bizarre social phenomenon of “he who gets public rental housing gets the world”, which is not only unfair to young people striving to get ahead, but also distorts Hong Kong’s economic and social development and worsens the government’s finances. In recent years the government has begun to attach importance to the supply and turnover of subsidised housing, and has adjusted the public rental housing-to-subsidised-housing building ratio — a welcome change, but one that needs to be deepened further.
1. The Subsidised Housing Shortage Is Far More Severe Than the Public Rental Shortage
The subsidised housing policy has always been a crucial part of the local housing ladder and of citizens’ upward mobility. In 1976 the government launched the Home Ownership Scheme, with the goal of subsidising lower- and middle-income families and public rental housing tenants to become homeowners. But in 2002, in response to the Asian financial crisis’s severe impact on the property market, the government halted both sales and construction of subsidised housing. Some commentators at the time actually recommended that the government stop sales only and keep building, to preserve flexibility — but unfortunately the government did not adopt this advice. Private property prices then rose for an extended period, and it was not until 2011 that the government announced the resumption of subsidised housing construction, and not until 2014 that subsidised housing went back on sale.
A 10-year halt in subsidised housing construction created a rupture in the homeownership ladder. Between 2014 and 2024, Green Form applicants (current public rental housing residents) applying for subsidised housing oversubscribed each round by an average of nearly 12 times; while general buyers meeting the income and asset limits — White Form subsidised housing applicants — oversubscribed by an average of 63 times. In 2014, 2018 and 2019, White Form oversubscription exceeded 100-fold, with only 1 in 100 families having any hope of being drawn — a vanishingly small chance.
In statistics, the expected number of draws can be treated as the “average subsidised housing waiting time”. If an applicant draws every year and the probability of success remains constant, the oversubscription multiple equals the average waiting time in years. The authors therefore estimate that between 2014 and 2024, the average wait for Green Form applicants was 12 years, while the average wait for White Form applicants was 64 years.
In 2024 the number of White Form subsidised housing applicants fell back, with an average waiting time of 18.2 years — but the latest average public rental housing waiting time is only 5.3 years. These figures show that the subsidised housing shortage is far more severe than the public rental housing shortage, and the homeownership ladder remains broken.
2. The Subsidised Housing Shortage Has Misled Society into ‘Public Housing Above All’
The Housing Bureau has made shortening the public rental housing waiting time the core of its work, focusing on building more public rental housing while ignoring the “subsidised housing waiting time”, leading to a persistent and severe shortage of subsidised housing supply. This is a misguided long-term strategy, and there are six reasons why.
First, a flawed theoretical foundation. The public queues for public rental housing not only because of a public rental housing shortage, but because subsidised housing supply is insufficient, causing a rupture in the housing ladder. Large numbers of citizens are unable to move up, and have no choice but to reduce work and queue for public rental housing.
Second, the housing market is distorted. The consequence of relentlessly building more public rental housing while neglecting subsidised housing is that citizens live in ever smaller spaces, with each generation’s quality of life worse than the last.
Third, the labour market is distorted. Large numbers of citizens deliberately cut their working hours to stay under the public rental housing income limit, and are tied to public rental housing locations that prevent them from working near home, leading to wasted labour resources and sacrificing Hong Kong’s economic vitality and competitiveness.
Fourth, it is grossly unfair to young people striving to get ahead. Young people find it hard to get into public rental housing and must shoulder the high cost of private-market housing. They have elders above and children below, and still have to bear this kind of housing-cost pressure. This state of “he who gets public rental housing gets the world” effectively punishes ambitious young people.
Fifth, it runs counter to Hong Kong’s economic development direction. Hong Kong now needs to “build itself into a high ground for international talent”, which requires high-end talent. However, a housing policy that focuses unilaterally on building public rental housing while neglecting subsidised housing and rebuilding citizens’ homeownership ladder is not conducive to expanding the supply of quality units, and hinders the attraction of high-end talent.
Sixth, it causes the government’s finances to deteriorate rapidly. Building public rental housing on a large scale produces fiscal deficits. The government is currently committed to accelerating public rental housing construction and expects to build around 200,000 new units in the future, with total expenditure potentially exceeding HK$200 billion. Public rental housing rental income is only enough to cover routine maintenance, let alone recoup construction costs. By contrast, subsidised housing prices not only cover construction costs but generate a sizeable surplus. The construction cost of each newly built subsidised-for-sale housing unit is HK$1.15 million, but its market price reaches HK$4 million. Even at a 75% discount, building 25,000 units per year could generate a net gain of approximately HK$46.25 billion.
3. Specific Recommendations: Build More Subsidised Housing, Deepen Housing Reform
The private market today cannot meet the housing needs of economic and social development. The government must take the initiative to address the shortage of subsidised housing and high-quality flats, and redesign a housing policy that is unfair and out of step with the times, in order to support economic development and youth mobility.
Fortunately, the Housing Bureau has already begun reform. The Director, Ms. Winnie Ho, has worked tirelessly for the people, holding to the four goals of “increasing quantity, accelerating speed, raising efficiency, and improving quality” (提量、提速、提效、提質), and is committed to enhancing citizens’ well-being. Her policies include cracking down on public rental housing abuse and revising the “well-off tenants” policy, making her a model reformer. The Director has also repeatedly stressed the importance of building more subsidised housing and increasing its turnover.
The authors fully agree with the current direction of reform, but data research clearly shows that the effort is still insufficient. Facing the subsidised housing shortage crisis, the authors recommend:
- Further adjust the public rental housing-to-subsidised-housing construction ratio. Over the next five years, the Housing Authority and Housing Society expect to build around 166,000 units in total, comprising 110,000 public rental housing units and 56,500 subsidised housing units — a ratio of roughly 2:1. The authors recommend revising the ratio to 5:5 as soon as possible, and then considering a further revision to 3:7 in due course.
- Actively prepare for the further deepening of housing reform, including how to increase turnover in the subsidised housing market, improve the subsidised housing pricing method, build more high-quality flats, and establish a mechanism that can balance supply and demand — with the goal of rebuilding a sound homeownership ladder.
The authors’ previous articles in this column have pointed out that housing reform is the foundation of Hong Kong’s “transition from governance to prosperity” (由治及興), and is also key to Hong Kong’s future economic development — of the utmost importance, and overdue.
(Translation supported by AI)
Related articles:
- Will Public Housing Reform Undermine the Private Market? by Michael Wong, Alex Ngau and Yun-wing Sung
- Tenant Purchase Scheme: From Failed Lessons to Universal Sharing by Michael Wong, Alex Ngau, Yun-wing Sung
- Stagnation in the Subsidised Housing Resale Market — Buying and Selling Restrictions Must Be Significantly Eased by Michael Wong, Alex Ngau and Yun-wing Sung
