In the policy address released in mid-October 2023, Hong Kong Chief Executive John Lee proposed the "simple housing" policy, which aims to strengthen the control of subdivided flats (partitioned rental rooms) and change the name of subdivided flats that meet the standards. However, although this policy aims to improve the living conditions of subdivided flats, non-profit organizations concerned about the subdivided flat problem have expressed concerns that this policy may not effectively solve the subdivided flat problem, but may lead to rent increases.

Subdivided flat problem and "simple housing" policy background

Subdivided flats, also known as "subdivided building units", are a form of living in Hong Kong's old residential buildings that are divided into multiple small rental houses by owners or sub-landlords. These subdivided flats are usually small in space, lack independent sanitary facilities, and tenants need to share kitchens and toilets, and the living environment is poor. Many subdivided flats are even less than a few dozen square feet in area, and have serious health and safety problems.

Since taking office, John Lee has repeatedly proposed policies to improve the living environment of grassroots citizens in his policy address. In his latest policy address, he detailed the "simple housing" policy, stipulating that in the future, subdivided flats that meet the standards will have to meet the minimum area of 86 square feet (about 8 square meters) and have basic conditions such as independent sanitary facilities, fire detectors and open windows.

Institutional concerns: Changing the name cannot fundamentally solve the problem

Although the original intention of the "simple housing" policy is to improve the living conditions of subdivided flats, non-profit organizations are not optimistic about it. In an interview, Lai Jianguo, chairman of the board of directors of Lunju Social Real Estate, said that simply renaming subdivided flats as "simple housing" does not mean that the subdivided flat problem has been completely solved. He pointed out that although the policy has proposed new standards, it has not set a clear enforcement timetable or clearly stipulated the rental level of newly built houses.

Lai Jianguo added that although the government plans to impose severe penalties on owners who rent out subdivided flats illegally, the enforcement of the policy is still unclear. Even if the "simple housing" policy is passed, there may still be poor implementation and poor-quality subdivided flats may continue to exist.

The minimum area and rent of "simple houses" are in doubt

Lai Jianguo also questioned the minimum area of "simple houses". He pointed out that according to the estimation of architects, the minimum living area required for a person's life should be about 100 square feet, while "simple houses" are only 86 square feet, far below this standard. In addition, the new policy does not stipulate the per capita area, which means that even the smallest "simple houses" may accommodate multiple tenants.

In addition, Lai Jianguo is also worried that the policy of not setting a starting rent will provide landlords of subdivided flats with the opportunity to increase rents. He pointed out that although the policy address mentioned that the rental of "simple houses" is regulated, due to the lack of a starting rent, landlords may significantly increase rents in the initial stage, causing a heavier burden on grassroots tenants.

Dilemma faced by residents and landlords of subdivided flats

Against this policy background, many residents and landlords of subdivided flats are uneasy about future changes. More than ten years ago, 78-year-old Grandma Huang divided her home in Sham Shui Po into two parts, living in one half and renting out the other half at a monthly rent of HK$7,200. Granny Huang is worried that the new "simple housing" standard requires her to install an independent water meter, which will be a considerable expense. She hopes that the government can provide subsidies to help owners cope with these additional costs.

Meanwhile, Xiaoxiao, a 34-year-old single mother, also expressed concerns about the new policy. She currently rents a subdivided flat of about 129 square feet. The environment and conditions have improved compared to before, but she is worried that with the implementation of the "simple housing" policy, the landlord may take this opportunity to increase the rent, which will make her life more difficult. She hopes that the government can provide more support in terms of public housing waiting subsidies to help grassroots families like her tide over the difficulties.

Future Outlook: Policy Effectiveness and Implementation Challenges

Although the introduction of the "simple housing" policy is regarded as an important measure for the Hong Kong government to improve grassroots housing problems, its effectiveness remains to be seen. Lai Jianguo and other experts believe that whether the policy can truly solve the subdivided flat problem depends on the future enforcement efforts. Although the government emphasizes that it will take severe measures to ban low-quality subdivided flats, the implementation details of the policy are still not clear enough.

At the same time, with the aging of Hong Kong's population and the increase in the number of new immigrants, the demand for subdivided flats is still rising. According to statistics from the Hong Kong government, about 210,000 people live in 110,000 subdivided flats, and Li Jiachao estimates that about 30% of subdivided flats will be banned because they do not meet the "simple housing" standards. This means that there is still a large proportion of subdivided flats in the market, and the rents of these subdivided flats may rise further with the implementation of the policy.

Solving the subdivided flat problem requires more comprehensive policy coordination

Lai Jianguo said that although the "simple housing" policy is a manifestation of Li Jiachao's concern for grassroots housing problems, housing policies alone are not enough to truly solve Hong Kong's housing problems. He believes that in addition to improving the grassroots housing environment, Hong Kong needs to make more efforts in economic development and democratic processes to promote social progress in an all-round way.

In response to media questions, Deputy Secretary for Finance Wong Wai-lun also said that the government has no intention of solving the subdivided flat problem by simply changing its name. He emphasized that "simple housing" is to distinguish between rental units that meet the standards and those that do not, rather than solving the problem once and for all.

Long-term challenges of Hong Kong's housing problem

Hong Kong's subdivided flat problem has a long history. Although the "simple housing" policy, as one of the government's response measures, has certain positive significance, whether it can effectively alleviate the dilemma of subdivided flats remains to be tested by time. With the changes in Hong Kong's population structure and the continued increase in housing demand, the government also needs to formulate more detailed policies in housing supply, rent control, etc. to ensure that grassroots citizens can enjoy better living conditions.