Tiny Apartments and Punishing Work Hours: The Economic Roots of Hong Kong’s Protests
Few places to build
Move Over, New Yorkers: You Have No Idea How Small an Apartment Can Really Get
Manhattanites, think those 300-sq.-ft. apartments in the Big Apple are small? Please.
One property project under development in suburban Hong Kong caused an uproar in the semiautonomous Chinese territory late November, when its developers revealed that the smallest studio suites in the completed apartment block would measure just 128 sq. ft. — or nearly 12 sq m.
No, that’s not a typo. A property developer in one of the world’s key financial hubs is offering apartments only two-fifths the size of what New York City’s then mayor Michael Bloomberg referred to as “micro-units.”
The Hong Kong project attracted even more ridicule when a representative of the developers told local media that the Lilliputian units — to be sold to grown-up buyers as condominiums — took inspiration from student accommodation.
But even those 128-sq.-ft. “gnat flats,” as they’re sometimes called locally, are out of reach of many young people, never mind owning a palatial 300 sq. ft. of real estate. The latter is an extravagant fantasy.
“You wouldn’t think [owning a micro apartment is] exceptionally good” Joe Kok, 24, tells TIME. But “It is the stuff of dreams for many people. The price of everything just keeps growing exponentially.”
Crazy property prices in this freewheeling metropolis, where a cup of coffee can set you back by $8 on average, are nothing new. Just this January, an international survey bestowed upon Hong Kong the dubious achievement of having the most unaffordable housing in the world, for the sixth time in a row. The territory’s latest Gini coefficient, as reckoned by Hong Kong’s Census and Statistics Department in 2011, is just 0.537. That makes it the world’s 10th most economically unequal place according to the CIA World Factbook. Only places like Haiti and the Central African Republic have greater economic disparity.
During Hong Kong’s boom years — the 1970s and ’80s — social mobility was fueled by home ownership. Couples and families found it easier to save and put a down payment on that first apartment, flip it within a year or two, and move up both the property and social ladders. But, as is the case in many North American and Western European countries, owning property has become practically out of reach for the average millennial.
“Just when they start thinking about it, people might already realize [buying a home] is unfeasible,” says Ricky Wong, 26. “Society must’ve run into problems, such that people can’t buy a home even if they’ve worked hard their whole lives.”
A man looks at a model of Park Vista, a residential property developed by Sun Hung Kai Properties, at a sales exhibition in Hong Kong, on Feb. 3, 2016
Edward Yiu, an urban-studies scholar and one of Hong Kong’s leading voices on housing-related issues, tells TIME that rise in both rent and home prices has far outstripped the growth of salaries.
“Seeing such movement in property prices, people in Hong Kong would conclude that the housing market is out of reach for them,” he explains. “With a population so disgruntled, there is simply no way for the city to be well-governed.” (Yiu was elected to the territory’s legislature in September, but the fate of his seat is hanging in the balance at the time of writing: He’s one of many liberal lawmakers targeted by the emboldened local government’s legal maneuvers.)
The lack of personal space, perceived or real, are causing jitters of all sorts among the city’s youth. As one 25-year-old local politician put it bluntly in October, “If we want to bang, there’s no room to bang in … This is a very realistic problem.”
Hongkongers’ relentless pursuit of a roof to call one’s own — or even just to move out of the family home — sees ingenious property developers and entrepreneurs push things to their rational conclusion, and then some. A recent rental listing featuring so-called space-capsule apartments, modeled after Japan’s famed capsule hotels, captured the attention of both local and international media.
One report called them “luxury cage homes,” alluding to the territory’s notorious slums where tenants renting only bed spaces are literally caged in. Citing the onslaught of press interest, the space capsule apartment’s landlord declined TIME’s request for a visit and an interview.
Despite the territory’s housing crisis, many balk at the idea of renting a pod for $644 a month. “I’d rather live with my family,” says Wong.
As for proper apartments, the 128-sq-ft units are far from an outlier in the market. A slew of new residential projects unveiled in the second half of 2016, all with significant numbers of minuscule studios on offer, best exemplify how developers are cashing in on limited space. Several developers made local headlines when their projects were revealed to contain studios ranging from 128 sq. ft. to 166 sq. ft. In the words of local Chinese-language media outlets, these are “smaller than a single-person prison cell” or “just larger than a Honda Jazz car.”
Commercial and residential buildings stand in the West Kowloon district in this photograph taken with a tilt-shift lens in Hong Kong on July 21, 2016
Residential units of this size are not unheard of in Hong Kong, but previous iterations have mostly been created by dividing large apartments in older buildings. According to the most recent official numbers, nearly 200,000 people in Hong Kong (including those only living in the city temporarily) live in so-called subdivided units — a lamentable figure for one of the world’s financial capitals. A majority of residents in these cramped homes, often poorly illuminated and ventilated, are of lower socioeconomic statuses. Such subdivisions are usually unofficial — creating fire and other hazards for residents along the way — but they so ubiquitous that the territory’s Buildings Department feels the need to address it with a whole dedicated section of its website, and they have become the target of local satirists.
What’s new about the matchbox developments of 2016, though, is the fact that they are new housing projects built from scratch. Buying any one of these pint-sized apartments would cost on average by almost $400,000 — about 17 times a Hongkongers median annual wage.
And yet, according to Yiu, they are still an understandable buy.
“The existence of minuscule residential units can be rationalized both in economic and policy terms.” He explains that the government’s measures of additional stamp duties for repeat buyers and foreigners, first implemented in 2012 and 2013 to cool the property market, inadvertently drove investors’ demand to smaller flats as a way of minimizing their tax burden.
For its part, the Hong Kong government moved early November to raise the stamp duty rate for property transactions to 15%, regardless of the size or price of the property changing hands. (First-time buyers who are permanent residents of the city are exempt from this, as well as previous additional stamp duties.) Activity in the local property market slowed somewhat in the immediate aftermath, according to the South China Morning Post — but whether these measures would allow more people to buy affordable homes in the long term remains to be seen.
In this Jan. 25, 2013, photo, 62-year-old Cheng Man-wai lays in his cage, measuring 16 sq. ft., which he calls home, in Hong Kong
Authorities in the territory repeatedly maintain that much has been done to both increase the quantity of housing supply and damp down property prices, mainly by seeking additional land for public housing and ramping up sales of subsidized housing. But the average price level of private housing in Hong Kong rose by a staggering 47.4% from the time Leung Chun-ying, the current chief executive (as the city’s top official is called) assumed office in July 2012 to October 2016.
But Yiu tells TIME that, instead of finding extra land on which to build houses — something “which doesn’t help solve the problem of housing and home prices” in Hong Kong — he thinks that investors and speculators should be separated from prospective buyers only looking for a place to call home, in part by bringing home-building models like housing cooperatives to the city.
“If a family chooses not to flip houses, it should be able to opt for its right to housing while foregoing any potential income from treating housing as a form of investment,” he tells TIME.
For now, that isn’t much help to the city’s young, who see no way out of their dilemma. Says Gian Lau, 23: “If I look at, say, five or 10 years down the line, I still see myself rather far away from buying my own property.”
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Tiny Apartments and Punishing Work Hours: The Economic Roots of Hong Kong’s Protests
A typical subdivided flat in Hong Kong
By Jin Wu/The New York Times; Photograph by Tyrone Siu/Reuters
A typical subdivided flat in Hong Kong
By Jin Wu/The New York Times; Photograph by Tyrone Siu/Reuters
A typical subdivided flat in Hong Kong
By Jin Wu/The New York Times; Photograph by Tyrone Siu/ReutersHONG KONG — Rents higher than New York, London or San Francisco for apartments half the size. Nearly one in five people living in poverty. A minimum wage of $4.82 an hour. Hong Kong, a semiautonomous Chinese city of 7.4 million people shaken this summer by huge protests, may be the world’s most unequal place to live. Anger over the growing power of mainland China in everyday life has fueled the protests, as has the desire of residents to choose their own leaders. But beneath that political anger lurks an undercurrent of deep anxiety over their own economic fortunes — and fears that it will only get worse. “We thought maybe if you get a better education, you can have a better income,” said Kenneth Leung, a 55-year-old college-educated protester. “But in Hong Kong, over the last two decades, people may be able to get a college education, but they are not making more money.” Mr. Leung joined the protests over Hong Kong’s plan to allow extraditions of criminal suspects to mainland China, where the Communist Party controls the courts and forced confessions are common. But he is also angry about his own situation: He works 12 hours a day, six days a week as a security guard, making $5.75 an hour. He is one of 210,000 Hong Kong residents who live in one of the city’s thousands of illegally subdivided apartments. Some are so small they are called cages and coffins.
New York City apartment 414 square feet
Average living space per person
Average living space per person
Average living space per person
Average living space a person get in different cities
His room, by comparison, is a relatively spacious 100 square feet to sleep, cook and live. He sometimes struggles to make his $512 a month rent after paying for food and other living costs. The numbers are striking. Hong Kong’s gap between the rich and the poor is at its widest in nearly half a century, and among the starkest in the world. It boasts the world’s longest working hours and the highest rents. Wages have not kept up with rent, which has increased by nearly a quarter over the past six years. Housing prices have more than tripled over the past decade. The median price of a house is more than 20 times the annual median household income.
How affordable are Hong Kong homes compared with other cities?
Hong Kong
A typical home in Hong Kong costs more than 20 times the median salary.
Hong Kong
A typical home in Hong Kong costs more than 20 times the median salary.
Hong Kong
A typical home in Hong Kong costs more than 20 times the median salary.These issues were at the fore five years ago, when protests known variously as Occupy Central or the Umbrella Movement shut down parts of the city for weeks. Similar protests, such as the Yellow Vest movement in France, echo worries that a booming global economy has left behind too many people. Today, protesters are focusing on the extradition bill, which Hong Kong leaders have shelved but not killed, and a push for direct elections in a political system influenced by Beijing. Hong Kong, a former British colony, operates under its own laws, but the protesters say the Chinese government is undermining that independence and that the leaders it chooses for Hong Kong work for Beijing, for property developers and for big companies instead of for the people.
“It’s dreadful, the living situation there,” said Kenneth Leung, of his subdivided flat in Hong Kong’s Sham Shui Po district. Like many protesters, he wears a mask to avoid identification by the police. Lam Yik Fei for The New York Times
Supporters of Carrie Lam, Hong Kong’s top official, say she is trying to fix the city’s problems, though they acknowledge she has made missteps. The long term solution, pro-Beijing officials say, is greater integration with the mainland, not less. Young people could take advantage of a program in which the Hong Kong government helps entrepreneurs to set up a business in the Greater Bay Area, a new economic zone that links Hong Kong with the mainland, said Felix Chung, who leads the pro-Beijing Liberal Party in the Legislative Council, the city’s lawmaking body. “What’s the big deal if you have to travel from Zhuhai to Hong Kong?” Mr. Chung said, referring to a nearby Chinese city that is part of the program. “The Hong Kong people are spoiled,” he added.
For Philip Chan, those responses show how out of touch Hong Kong’s leaders have become. A 27-year-old protester and nurse at a public hospital, Mr. Chan still lives with his parents and shares a bunk bed with his 30-year-old sister. He sleeps on the bottom. “The Chinese government cannot guarantee us anything. Take for example freedom of speech,” Mr. Chan said, citing Beijing’s blocking of internet apps like Facebook and WhatsApp. “How can we live?” Housing lies at the root of many of the frustrations. So many people are priced out of the housing market that it is unusual to meet a young adult who does not still live with parents or family members. “Many Hong Kong people face serious financial problems like the high price of housing,” Mr. Chan said. “They try to work hard but they cannot earn enough money to have a better living condition. They cannot see their future so they are frustrated.” Perched on a series of islands and a swath of mountainous land descending from mainland China, Hong Kong already has relatively little space for housing.
Few places to build
Between steep slopes , protected parks and high-density neighborhoods , Hong Kong has little space for new housing development. Some experts say some government land and brownfields could be better used.
Some developed land, called brownfields , is vacant or underutilized, experts say. This government land is vacant or could be made available for housing in the future, experts say. Most of Hong Kong has slopes that may be too steep for major construction.
Few places to build
Between steep slopes , protected parks and high-density neighborhoods , Hong Kong has little space for new housing development. Some experts say some government land and brownfields could be better used.
Some developed land, called brownfields , is vacant or underutilized, experts say. This government land is vacant or could be made available for housing in the future, experts say. Most of Hong Kong has slopes that may be too steep for major construction.
Few places to build Between steep slopes , protected parks and high-density neighborhoods , Hong Kong has little space for new housing development. Some experts say some government land and brownfields could be better used.
Some developed land, called brownfields , is vacant or underutilized, experts say. This government land is vacant or could be made available for housing in the future, experts say. Most of Hong Kong has slopes that may be too steep for major construction.
Few places to build Between steep slopes , protected parks and high-density neighborhoods , Hong Kong has little space for new housing development. Some experts say some government land and brownfields could be better used.
Some developed land, called brownfields , is vacant or underutilized, experts say. This government land is vacant or could be made available for housing in the future, experts say. Most of Hong Kong has slopes that may be too steep for major construction.
Few places to build Between steep slopes , protected parks and high-density neighborhoods , Hong Kong has little space for new housing development. Some experts say some government land and brownfields could be better used.
Some developed land, called brownfields , is vacant or underutilized, experts say. This government land is vacant or could be made available for housing in the future, experts say. Most of Hong Kong has slopes that may be too steep for major construction.
Few places to build Between steep slopes , protected parks and high-density neighborhoods , Hong Kong has little space for new housing development. Some experts say some government land and brownfields could be better used.
Some developed land, called brownfields , is vacant or underutilized, experts say. This government land is vacant or could be made available for housing in the future, experts say. Most of Hong Kong has slopes that may be too steep for major construction.Critics say government policies that favor property developers make it even worse. The government makes money off sales of land to property developers, so it paces sales to maximize revenue and favors luxury developments over affordable housing, they say. They cite the time last year when activists asked city officials to consider turning a golf course into public housing. The 54-hole course, the anchor for a 2,600 member golf club nestled amid Hong Kong’s landscape of concrete dominoes, could have housed apartments for 37,000 people. In the end the government chose to set aside less than one-fifth of the land. “The whole system is totally controlled by the vested interests of the elite,” said Cheuk-Yan Lee, the general secretary of the Hong Kong Confederation of Trade Unions, a supporter of the protest movement. The government has also favored wealthy mainlanders, believing that Chinese buyers could push up property values and make Hong Kong households feel richer. Hong Kong officials loosened limits on mainland investment after protests in 2003 against a contentious proposal that would have prohibited sedition, subversion and treason against China. Though the proposed bill was defeated, the overall result was a surge in property prices that enriched homeowners but priced a generation of people out of the market. “Many young people see there is little way out economically and politically, and it is the background of their desperation and anger at the status quo,” said Ho-fung Hung, a political-economy professor at Johns Hopkins University. The city’s affordable-housing program has not kept up.
A government-run affordable-housing development in Hong Kong’s Cheung Sha Wan district. Critics of the city’s government say officials want to avoid building more. Lam Yik Fei for The New York Times
Currently, over 250,000 people are waiting for access to public housing. The number could be even higher, but Hong Kong officials have kept the cutoff at income of less than $12,000 per year. The critics say city officials refuse to change the threshold because it would mean Hong Kong would have to build even more public housing. “The government requirement for eligibility for public housing is not realistic in terms of people who are living in poverty,” said Brian Wong at Liber Research Community, an advocacy group. Wages haven’t risen as quickly as the cost of living, particularly at the low end. Hong Kong’s minimum wage is the equivalent of $4.82 an hour, a figure the government updates every two years. A number of nonprofit organizations have called on the government to raise this to $7, which the British charity Oxfam calculated was a “living” wage for the city based on the average household cost. Lawmakers point out the latest increase in minimum wage earlier this year was the biggest since Hong Kong put in place a statutory minimum. But they also emphasize the importance of keeping Hong Kong competitive for foreign companies. Corporate tax in Hong Kong is among the lowest for major global cities. Many of the protesters say direct elections would give them a greater say in these crucial economic matters. One protester, Roger Cheng, a 52 year old consumer products salesman, was marching peacefully on July 1 when another nearby group began to ram metal rods through the glass doors of the Legislative Council. Like others around him, he was unwilling to oppose the violence. “We prefer a more peaceful way of protesting,” Mr. Cheng said. “But we do not oppose the more radical way, because the Hong Kong government is not responsive at all.”
Ezra Cheung contributed reporting. Sources: Liber Research Community; Demographia International Housing Affordability Survey; Hong Kong Transport and Housing Bureau; Hong Kong Lands Department; New York City Department of City Planning; The National Institute of Statistics and Economic Studies (France); New York City Board of Standards and Appeals; OpenStreetMap
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