Hong Kong is a politically conflicted city and country on the South China Sea, described as employing a ‘one country, two systems’ state. It is an ex colony of Britain that is in a transition stage between British rule and Chinese ownership. In 1997 it was agreed that Hong Kong would be handed over to China as an SAR, ‘Special Administrative Region.’ However it still has much autonomy and is governed by a separate system than mainland China, with its own economic policies, government and legal system. Hong Kong has a complicated history, but it is a global financial centre and it is considered to be one of the most developed cities in the world. This is showcased by its infamous skyline with countless skyscrapers belonging to various firms, including the global headquarters of both HSBC and Hang Seng Bank, as well as the mobile company ‘3’ ’s  global headquarters. Despite all this, it has a Gini coefficient of 51.8, the 9th highest in the world. The Gini coefficient shows the income inequality in a country, which in turn can reflect on other inequalities, such as housing inequality. Housing inequality is extremely significant in Hong Kong and the private housing market there is hugely expensive.

Leaving aside the Gini Coefficient, the housing inequality in this city is clear to see. The extravagant buildings found in the central district of Hong Kong are often located right next to government provided council houses (as in the photo above), which are generally dimly coloured blocks stuffed with tiny apartments. These apartments are frequently made up of SDUs (Single Dwelling Units). In 2021 there were 210,000 people in Hong Kong living in 97,000 SDUs. They are often owned by landlords who want to exploit lower income families, and thus they do not spend the money they need to on meeting the certain safety or building requirements. Because many of the SDUs lack the aforementioned safety requirements, SDUs can pose significant risks to residents. Furthermore, according to the Hong Kong Council of Social Service the average size of an SDU is about 50 square feet, but with an average of about 2.5 people per SDU, that’s only 20 square feet of space per person; this is almost nothing compared to the 290 square feet of housing per person in the UK (for rented properties in 2020 according to Hamptons Letting Agency). However, as SDUs are illegal, statistics are hard to calculate, and so all of these numbers are merely estimations from either the government, the Chinese University of Hong Kong, or from other independent sources.

Subdivided units are a prominent issue, and the Hong Kong government are fully aware of it, and have tried to combat it over the last few years. However, what’s important to note is that SDUs are only an issue because they are unregulated and because of the safety problems associated with them. These small housing units are necessary for lower income citizens because private housing prices in Hong Kong are at the very top of the list globally. In 2021, the Demographia International Housing Affordability report placed Hong Kong at the top of their list for the 11th year running. Their metric compares median house prices to median income, and so relative to income, houses in Hong Kong are the most expensive in the world according to this report. Of course, this is an issue in itself, but the government are more focused on providing safe and legal houses for lower income groups; they have implemented a few different methods to help improve SDUs.
 

One method they used was regulation. This began in 2019, where the government did around 70,000 inspections of SDUs and other illegal structures, ordering 16,000 of them to be shut down or improved to meet legal requirements. They also implemented a rise in the fine for unauthorised structures like SDUs tenfold, from about £40,000 to £400,000, and included the threat of imprisonment. They then proceeded to license 9,000 higher quality SDUs by April 2021 and encouraged landlords to come forward and license their property if it has SDUs. 

But there are some limiting factors and it is debatable how effective regulation has actually been in reducing the amount of unsafe and illegal SDUs in Hong Kong. Whilst the licensing of 9,000 SDUs was a step forward, many landlords are still unwilling to admit their ownership of SDUs, despite the potential upside of licensing them. This is due to the process of getting them licensed being time-consuming and landlords feeling as if they will make less profit if they license them. Furthermore, as so many SDUs are still unlicensed, they feel as if they can get away with it. These landlords don’t see the point in paying more money just to be bound by regulations when they can easily avoid the red tape and line their pockets with extra profits. SDUs are still a huge problem in Hong Kong, and most likely will remain to be over the coming few years.

To contrast with this, at the other end of the spectrum lies a well-known luxury real estate market. It has properties in the most exclusive parts of the city, like the Peak or Repulse Bay, all with swimming pools, 24 hour security and exclusive communities. One such community is found in ‘The Beverly Hills.’ People drive around in golf carts because in this secure and gated community cars are not permitted. Instead of cars, residents use golf carts or other electric vehicles to move around. It is an exclusive area with plenty of amenities and luxury housing. There are plenty of other high priced communities in Hong Kong, but this clearly shows the division between the higher and lower income groups in terms of housing. 

Hong Kong is a brilliant city, but from my personal experience, it is obvious that there is a big inequality gap in the housing market. The future requires new solutions, or better  commitment and enforcement of old ones, if housing inequality is ever going to be significantly improved in Hong Kong.