Hong Kong

Hong Kong- background A Very Compact City - A Special Administrative Region of China - “One Country, two system” - Area : 1,104 km-sq; Paris metro 17174.4 km-sq in total - Population : About 7mil ; Paris: 10 mil including Metropolitan Area A Very Compact City

Hong Kong- background (cont’d) - Developed region in China - Economic: Financial hub, high GDP(PPP) per capita :7th - Shops, Restaurants , Civic Infrastructure - eg Complete Public Transit Network (MTR, Taxi, Bus, TRAM, etc…) An illusion, economic development, structural /materialistic

Hidden Problems Huge and widening wealth Gap Housing Living Standard

Inequality in Wealth distribution GC is defined by referring to the Lorenz Curve (obtained by plotting the cumulative percentages of household income against the cumulative percentages of number of households). Its value ranges from 0 to 1, and is equal to (i) the areas between the Lorenz Curve and the line of equality divided by (ii) the total area under the line of equality. The higher the GC, the more the disparity it implies, >0.4 , implies there is inequality Civic Exchange: “Despite having strong economic growth for many years and accumulating substantial wealth, Hong Kong’s economy has certain interesting characteristics when examined against OECD experience. Hong Kong’s Gini coefficient is close to Mexico, the poorest and most unequal OECD country. Hong Kong also fares worse than many Asian countries, which are much less developed and considerably poorer Source: http://www.insitu.com.hk/blog/?p=2045

High Population Density http://www.nationmaster.com/country-info/stats/Geography/Area/Land/Per-capita 8.94 /1000ppl france Wikipedia

Population Density Vs France 8.94 sq-km 4.21 Oxfam Hong Kong interviewed a total of 501 low-income families not receiving Comprehensive Social Security Assistance from August to October 2012. Most of the respondents were on the waiting list for PRH.13 The survey also found that the median rent-to-income ratio was 30.1% for the respondents, which was higher than that of overall private housing tenants at 24.3%. Despite paying high rent, private housing tenants' living density per person was inversely high. According to the survey, 68.3% of the respondents were now living in cubicles, bedspaces or subdivided flats. The median living space per person was about 45 sq ft, below the minimum living space standard of 59 sq ft per person according to the Hong Kong Housing Authority.

Affordability problem Ratio of Official data from Rating and Valuating department: http://www.rvd.gov.hk/doc/en/statistics/graph2.pdf

Affordability problem Price/Income Source: http://www.globalpropertyguide.com/most-expensive-cities ; http://www.numbeo.com/property-investment/gmaps.jsp

Affordability problem Housing far exceeds the average purchasing power of the general public Most cannot afford the to buy a property Cannot afford the initial deposit/ High burden from the installment payment Can hardly rent a place in reasonable price range High demand on subsidized housings from the government Ratio of

Lack of proper supply Low Availability of affordable Housing The Overheat property Market due to speculating activities Developers seems to position their product as luxury price The growth rate of housing (due to land shortage)<growth of population , Including the Public Rental Housings(PRH) for the Grassroots, ON AVERAGE, a applicant have to wait 2.5 years before his/her grant a PRH. It properly will take longer

<< Supply Problem Supply Demand Waiting Time : 2.5 yr (2010) Private sector -Mainly Luxury -Low new affordable housing Waiting Time : 2.5 yr (2010) Government HKHA -Subsidized Home Ownership -Public Rental Housing --Housing for Elderly People 2.5 year Find supply data

http://www.cou4.com/subdivided-flat-rent/, in 2010 rooftop housing Cage-House Cubicle apartment Sub-divided FLats <$7000 http://www.cou4.com/subdivided-flat-rent/, in 2010

170,000 Sub-divided Unit Inhabitants - Flat divided into small units ILLEGALLY - around 3.72 sq-m - Temperature - Safety 2013 : More than 170,000 Inhabitants

Further/ rooted problem Developer Hegemony - A book Land and the Ruling Class in Hong Kong (Second Edition) - When developers dominates in different markets Supermarket , Utility , Mobile , Restaurants, mobile network, …  Ruling Class of HK, by Controlling all the choices & eliminate competitions  Lower Social mobility (Widening gap between “Clasess”)  Income inequality continue to deprive wealth from the labors, * Working class v. the bourgeois in an extreme case

Discussion -Possible solutions ? Divide properties into 2 categories– investment/ resident Welfare system / Subsided housing supply from the government Migrating system Lobby with the Banking sector/ -Is the widening wealth gap inevitable or a centralized power like the developer hegemony inevitable under the market operation? If yes, What is the solution for ? http://www.independent.co.uk/news/uk/politics/government-accused-of-secret-deal-to-go-easy-on-bonuses-2180275.html