(Introduction to Social Administration)
Name: Lo Dick Chung
University number: 2007280142
Question: Discuss the debate evolved around the privatization of the public housing in Hong Kong. Use the issue of The Link to illustrate your discussion. What are the pros and cons of this scheme?
The public housing development has a long history in Hong Kong. According to statistics, more than 50% of the population resides in the public housing estates. Among this, 30% of them are living in rental unites while the other 20% are residing in the H.O.S. flats (Yeung, 2008). By the end of 1990s, a total number of 654, 000 units have been provided to the community at affordable rentals and 308,000 households own their home through different schemes introduced by the Housing Authority (HA) (Poon, 2004). Hong Kong is even the city which owns the second largest number of housing stocks in the Asia Pacific Region (HKHA, 2005). Undoubtedly, the housing policy in Hong Kong plays an extremely important role in people’s welfare. To cater such a large demand, housing has become a large financial burden to the government. Therefore, the government has started the privatization of public housing bit by bit since 1970s. For example, the Long Term Housing Strategy suggested in 1987, as well as the appointment of the Private Management Agencies (PMAs) to manage the HOS in 1990 (Poon, 2004). Yet, there is a turning point in 2004. The set up of The Link REIT has triggered a huge debate in the society. In this essay, the function of public housing will be firstly defined. Later, the privatization of housing in Hong Kong will be explored. Furthermore, the background of the Link REIT will be introduced and its pros and cons will be comprehensively investigated. B. Housing Policy development in Hong Kong
The housing development has changed over time and there are some major policies of housing in Hong Kong.
Since a fire sparked off in Shek Kip Mei squatter area in 1953, the government needed to implement a resettlement policy in order to rehouse the affected people who had lost their home in a short period of time. This actually is the starting point of government intervention of the housing policy in Hong Kong. The government changed the laissez-faire policy in housing and began to produce the subsidized flats directly for the lower income group who cannot afford to buy a living unit from the private market (Chiu, 1994).
The government intervention in the housing policy was no longer a short-run action since 1973 and it has become a continuous program. There was a Ten Year Program which aimed at housing 1.8 million with self-constrained units. The quality of living then became a concern for the housing development.
In 1976, the Home Ownership Scheme which gives people a chance to buy or rent their own flats in lower price was announced. It is managed by the Housing Authority and financed by the government, which implies a start of the privatization of public housing.
In August 1991, the Sales of Flats to Sitting Tenants Scheme was introduced. Although this scheme was not so attractive and was failed since the tenants need to pay a higher monthly cost to purchase the same property, it intensified the trend of the privatization of the public housing (Chan, 1995).
The proposal of building 85,000 units of living flats which announced by Mr Tung Chee Wah (the former Chief Executive) in 1997 to made 70% homeownership of people within 10 years was put to a halt in 2001. The construction of the Home Ownership Scheme was then postponed since 2003 due to the drop of the property value in the private sector.
Moreover, there is a launch of the LINK after some legal disputes put up by the tenants in 2005. This launch, in fact, raises the social concern towards the privatization of public housing in...