We’re not a loan: Housing Ladder, People Suffer

Local Activists Hold Protest Inside “Asia-Pacific Housing Forum” Against Financialization of Housing
We’re not a loan: Housing Ladder, People Suffer

3rd September 2015 – Hong Kong

In October 2016, United Nations Human Settlements Programme (UN-HABITAT) will hold UN Habitat III, a once-every-twenty-year congress on reviewing and generating ideas of the implementation of the UN rights to adequate housing. In the conference, policies and strategies harnessing the power and forces behind urbanization will be discussed, and the direction of implementing the UN rights to adequate housing in the next 20 years is expected to be decided.

Habitat for Humanity International (HfHI), an international NGO aiming at providing decent housing to “everyone”, have signed a memorandum of understanding with UN-Habitat to promote and discuss the issue worldwide, nominated as the “civil society representative”. On 3-4 September, HfHI holds its 5th Asia-Pacific Housing Forum in Hong Kong, which is also foreseeable to give a great impact on the content of UN Habitat III.

We appreciate the effort of HfHI on fostering the right to adequate housing worldwide. However, we ought to raise our concern on the orientation of the forum. On the 1-2 September, Wharton Business School of the University of Pennsylvania is welcomed to partner with HfHI to offer its exclusive Housing Finance Course to discuss the Asia-Pacific region mortgage finance market. One of the tracks will emphasize on developing the housing market, including designing housing finance for the lower-income people.

We feel worried that, the orientation will influence UN-Habitat to recognize the resort that the government could be withdrawn from providing adequate housing, and transform the national/regional housing problem into the problem of personal debt. During the unstable economic situation, lower-income people would most probably be the first to suffer from wage decrease or unemployment. If mortgage turns out to be the resolution of housing for all people, the lower-income people will subsequently lose their right of housing. Therefore, recommending housing finance to be the solution of housing problem fundamentally contradicts the UN rights to adequate housing.

The closing plenary of the forum is “Empowering community to move up the housing ladder”, for which Hong Kong can be a lively model. After the implementation of Long Term Housing Strategy in 1987 in Hong Kong, in the name of “establishing housing ladder”, on top of public rental housing, the Housing Authority and Housing Society started to implement Home Ownership Scheme, Home Starter Loan Scheme and Sandwich Class Housing Loan Scheme, in order to increase the proportion of home ownership. Furthermore, some of the households in public rental housing were allowed to own the house they are renting, and the flats could also be traded in the free market.

As real estate sector became one of the few main industries in Hong Kong since 1990s, home prices rise constantly and rapidly, and the government seldom set up measures to hinder the rise of home prices. The exception is when Hong Kong suffers economic crisis, but subsequently quite a few people lost their job and unable to cope with loan repayments and default on their mortgages.. Since the abolishment of rental control in 2004, the rent of flats also increases rapidly. Lower-income people can only rent sub-divided flats without sufficient space, good ventilation and daylighting. Due to the incentive of profits in urban renewal, tenants are expelled from the flats by the owner, and smaller owners are often threaten by developers. Lower-income people hence face poor and insecure living conditions. The economic policy in Hong Kong is biased to the real estate sectors, and always loosens the restrictions on the profit making activities of the sector. The provision of public housing is, in contrast, shrinking. Lower-income people are exposed to the free housing market with uncontrollable rising price, and hence have poor living conditions and are at risk of homelessness.

According to Hong Kong Monetary Authority, the amount of outstanding residential mortgage loans owed by private individuals in Hong Kong has increased to 1,030 billion HKD in June 2015 (1). Moreover, as for household indebtedness, the steadily increase of mortgage lending lifting the household debt-to-GDP ratio to reach record high of 65.8% in the first quarter of 2015 (2).

Hong Kong as an example demonstrates that, if the government gives up the role of housing provision, and leave it to the market, the only parties who benefit are private developers and bankers. Lower-income people spend most of their money and life, only for mortgage loans and undignified housing. “NO FLAT SLAVE”, as an organization against homeownership in Hong Kong, therefore always shows our stand resist any policies that provide incentive to home-purchasing, and transfer the public housing to the free market.

The objective the action today is to express our concern on the “UN-habitat III” that may force people to engage in housing market. We hope “UN-habitat III” would bear it in mind that, government-provided housing pays an essential role of realising the right to adequate housing.


Notes:
1. HKMA: Residential Mortgage Survey Results
2. HKMA: Domestic and External Environment