Inside Hong Kong’s cage homes


It’s more expensive to live in Hong Kong
than anywhere in the world. Hong Kong has been ranked the least affordable housing
market in the world eight years in a row and by a long shot. Housing prices are now almost 20 times more than annual income. That means that
a household making $50,000 USD would on average be looking for
a house that cost $980,000 USD. And it’s getting really bad. Hundreds of thousands of residents now squeeze into incredibly
small apartments, most of them no bigger than a parking space. So these are cage
homes, which basically fit one person and their belongings. And they basically
stack these in a room in order to fit as many people as they can in the room.
And yet the price per square foot for these smaller houses just keeps shooting
up. I visited these homes to try to piece together an explanation for this trend
and to meet the people who are being squeezed by the world’s least affordable
real estate market. There are now tens of thousands of
people in this city who live in spaces that are between 75 and 140 square feet.
For some perspective a typical parking space in the US is 120 square feet. One of the most common strategies for small space living is this subdivided house model. This big space that’s been divided up into a bunch of tiny little
living spaces. These people basically have room for a bed and a table and a
few belongings. What makes this model work is that they have a bigger
communal space where they’re able to have their cooking and their washing and
the bathroom open to everyone, so that they can save space and save money in
their actual living quarters. So this is the kitchen for this space which is
shared by four families. The tempting
explanation here for why the prices are so high is land scarcity. You know, seven and a half million people crammed into this series of islands, it’s gonna drive up
the prices. The same story in a lot of places that have run out of land that
are in high demand — in San Francisco or New York City. Okay this might be the
story in New York City and San Francisco, but is Hong Kong actually running out of
land? Let’s see what the drone says about this. Flying over Hong Kong you start to
see that, while yes, there’s a very dense urban landscape, there’s also a whole lot
of green space. Government land-use data says that 75 percent of the land in Hong
Kong is not developed. Now some of that is mountainous and rocky and not easy to
build on, but certainly not all of it. So I posed this question about density
to two experts, one is a Hong Kong citizen and the other is a 30-plus year
resident. Both are advocates for better urban design. Are high prices primarily
the result of land scarcity? No. No. There’s a land-use issue, because also
land is being inefficiently used or conserved. The problem isn’t the shortage
of land the problem is bad land management. Land use, land management, what
these experts are referring to is that of all the land in Hong Kong only 3.7% is zoned for urban housing. But it’s not because of
mountains, it’s because of policy and this gets to the heart of the
explanation of why more and more people are living in homes the size of parking
spaces. The first thing to note if you want to understand the real explanation,
is that the government owns all of the land in Hong Kong. Well, all except for
this one church that the British built here when they ruled it back in the 1800s
and it kind of just escaped the whole government-owns-all-the-land thing. So the government owns all the land and it leases it out to developers, usually for
50 years in an auction process where the highest bidder gets the contract. With
such scarce and valuable land zoned for housing, real estate companies more and
more of them coming from mainland China with lots of money, will duke it out in
these auctions. And will end up at an astronomically high price. Like this plot of land that was just leased out for 2.2 billion dollars, which
set an all-time record for the most expensive land of ever leased by the Hong
Kong government to a developer. So the way the government zones and leases
land is the first part of this. The other part of this explanation has a lot to do
with taxes. If you’re the type of person who navigates away from this video when
you hear the word tax policy, stay with me here. This place loves low
taxes. It’s a great place to do business, because the corporate tax is low
no value-added tax, no sales tax, free market economics, low taxes. That’s
embedded into the fabric of this place. Look at all those low taxes doing their
work, building up those skyscrapers, slapping on those bank logos all over
town. So if the government isn’t getting revenue from taxes, it really needs it from
another source and in the case of Hong Kong that source is land sales. A lot of the government revenues here driven by land revenues and it’s about 30% of government public financing income. The government of Hong Kong can
lease out this land to developers at astronomical prices, make a ton of
revenue from that and not have to raise taxes on the people or the corporations
that reside here and they still proudly retain their ranking
as the freest economy on earth. What this means is that the Hong Kong government
doesn’t have a huge incentive to free up more land and lower prices, but while
this current arrangement of bidding and auctions is really good for revenue for
the government and good for the market generally, it’s not super good for the
people of Hong Kong. Of all the small spaces, this is easily the most cramped. These are
coffin homes. Could I ask you just a quick question about your living space? The government is slowly working on this
problem. Year after year new policies come in
that are meant to fix this, but they’re slow to change, mainly because they have
an incentive to keep the status quo as it is. Out here at this industrial
complex in Hong Kong, I met with a guy named Eric Wong, a local inventor and
businessman who has seen a business opportunity in the midst of this space
crisis. Eric grew up in Hong Kong and has been
thinking about small-space living for a long time. Oh it has WiFi. These capsules come in one or two-person sizes and are meant to provide a more
efficient and hygienic version of the cage and coffin homes, all at a
relatively low price. Down here there’s a little box where you can put all your
valuables and so there’s mirror lights, there’s reading lights. But these capsules,
innovative as they are, really just put a band-aid on this housing problem.
They don’t serve as a real solution. A real solution would need to come from
something that’s much less profitable and fun to look at: Government policy and
zoning reform that will free up more land and put the interests of the people
above the interests of the market, but until the government can make that
happen people in Hong Kong will continue to squeeze into smaller and smaller
spaces.

Posts Tagged with…

Reader Comments

  1. Vox

    Cage homes are just one fascinating product of Hong Kong's unique composition and history. For more check out the full Vox Borders Hong Kong playlist here: http://bit.ly/2OIuyUb

  2. William Limarjo

    It is HK own decision. China Central Government is not allowed to interfere with HK Economy Capitalist System.
    HK has their own currency, Central Bank and Reserves.
    They should aks their own government to provide young couple with affordable Apartment not China.

  3. July Rain

    I live in New Zealand and we even have a shortage of housing but we shouldn't. We have so much land . And we don't have billions of people crammed into our little country

  4. bunkerhillct

    It creates a huge social issue. People in Hong Kong used to be able to show off their wealth to mainland relatives and fee good by doing so-a relief to their daily stress; but now many mainland residents do the same thing to them, the daily life is unbearable for some in turn.

  5. Clodagh McPhelim

    1:58 looks very similar to the housing situation in Dublin at the moment. I know people who are living 12 people to a typical 3 bedroom house

  6. Chi Ming Fung

    Now I feel lucky for my grandparents and uncle in Hong Kong.
    When I visited them I already feel that it's much smaller and more expensive than our house in the US and I can't imagine there are such small coffin-like houses in HK.

  7. Dwayne Dwayne

    No, it says in the 1800's when the British ruled the land. I am 48 and when I was a kid the British still owned the land. I took the day off school and watched the monarchy give the land back.

  8. Jai Comiku

    Don't mean to be insulting, just pointing out the smallest things that no one cares about. 2:19 the guy doesn't say: "Nothing fancy here." He actually said: "it's really simple." Again, I don't think anyone cares. But I pointed it out anyways.

  9. Michael

    Even though Europe has its problems, I'm so glad I live here. If that was happening in any country in Europe people would be on the streets burning the country. No person deserves to live like this

  10. ChiGuaGua Le

    Lacking of living space is the the most serious problem in HongKong right now, and it’s the hardest problem to be solved by the government. On the surface, government owns the other 75% of land in HongKong, the problem seems mainly comes from the government that wasn’t willing to develop the land, however, the government wanted to solve the problem since right after HongKong’s returning to China in 1997. HongKong has been served by four chief executives since returning to China. The first executive, , Mr Tung Chee-hwa, has proposed a policy address regarding the living space problem, called the 85,000 Housing Project, which means government will help to increase not less than 85,000 residential units a year. He hope that 70% of the households in Hong Kong can buy their own homes in 10 years. The average waiting time for public rental housing will be reduced from 6.5 years to 3 years. From 1997- 1999, the government sold a lot of land for the construction of residential. After the year 2000, the first batch of units built during the "85,000" project were launched, and 85,710 residential units were completed. In 2001, the total number of residential units were increased to 100,000. The ironic part is, Hong Kong's economy is heavily controlled by real estate developers. Before Hong Kong was handed over to China by the British, The Sino-British Joint Declaration limits the amount of land sold in Hong Kong each year, so that the colonial government will not sell the most important land resources of Hong Kong before the transfer of sovereignty, and then take the fiscal reserves away. In this context, Hong Kong's demand for real estate has continued to rise due to continued economic growth. However, Hong Kong's land supply has not increased. This historical issue resulted a bubble economy in the 1990s. Many people get rich by speculating on stocks and real estate. The financial industry and the real estate industry have become important pillars of Hong Kong's economy. According to statistics, the overall property price in Hong Kong increased by 68% within 3 years and 10 months in the peak period from January 1994 to October 1997. However, due to Mr. Tung’s 85,000 Housing Project in 1997, huge amount of housing supply destroyed the real estate market. Coupled with the Asian financial turmoil, it caused Hong Kong property prices to plummet. The majority of private properties have depreciated by 70% in about five years. Many middle classes have become negative assets and Hong Kong's economy is in a slump. The "85,000" policy became one of the most criticized policies of Tung Chee-hwa. At that time, many people thought that the "85,000 Housing Project" was the culprit in the decline in property prices. People hope that the Government will amend this policy to curb the fall in property prices. As a result, on July 1, 2003, about 500,000 people in Hong Kong held the largest anti-government demonstrations on the basis of against 23 legislation. Although Beijing has repeatedly indicated that it supports the Hong Kong government headed by Tung Chee-hwa, but one year later, on July 1, 530,000. People (FNL data) held anti-government demonstrations again. Since then, under the pressure of Hong Kong people, medias and the business community, in 2005, Tung Chee-hwa announced his resignation on the grounds of physical discomfort. After all these things happened, successive Hong Kong government has become very cautious to increase supply and lower housing prices. Since the early 2000s, the Hong Kong SAR Government has implemented a number of measures to reduce the supply of housing, resulting in a significant reduction in the number of newly built public and private housing. By February 2011, Hong Kong’s overall residential property prices have surpassed the previous highs of October 1997. Some newspapers pointed out that the rent of property prices has risen sharply, the public grievances have increased, and people's livelihood has been greatly affected. In 2011, the middle class found that they could not buy a house because the price was too expensive. In 2012, people began to think that Tung Chee-hwa’s "85,000 project" was correct. If there were no 85,000 in the same year, young people in Hong Kong can only live in cage homes and subdivided units. How to deal with this ambivalent problem? It’s a very difficult challenge for the Hong Kong government.

  11. Maori Tane

    This country's leaders need a good spanking western world styles to knock there crocked brains back into reality or just catch up with the rest of us you fools.

  12. S Kim

    Watching this video really makes me wonder…..why do those ppl still choose to live in HK in those cage homes? Even though the tax rate is low, wages are not high enough so it's still not a big gain is it? When I was there, public transportation was super packed, and cars on the street were expensive ones. So where are general ppl spending their money at? Unless you're filthy rich, I don't see why you choose to live there amidst of all that.

  13. William Doyle

    This is why I hate humanity….we are so greedy for money and power that you leave other people behind. Homeless and making housing so expensive that they can barley pay for….

    Shame on humanity

  14. Bramleyhousemedia

    This is eerily reminiscent of a sci-fi novel I read years ago, Billennium. The only difference between that novel and the Hong Kong housing is the lack of crushing crowds…

  15. Yerin Smile

    I’m from Hong Kong, and I can tell you the real problem is the environmental department in Hong Kong (sorry idk what’s it’s called). Hk has over 60% of country parks, and everyone has been begging the environment department to free out some land for more housing, but they just won’t do it because they wanted to protect the title of having the most green space in such as small place

  16. Lionel Lim

    Well, it's the downside of capitalism & free economy. That's why I dont get why people are protesting so much there. U need a model where some form of socialism steps in to correct and improve your living conditions/quality of life.

  17. Cin Harris

    Build tiny homes? Take up less space. They need to redesign everything and find a more reasonable way to live. No matter what anyone's opinion is, almost no one wants to live that way.

  18. Rose Leniha

    I just….I can’t believe how much space I truly have, five living spaces for myself and my family and not including kitchen etc and yet somehow don’t think I have any space because there is always one person per living space. And yet 10+ people live in a space that’s the size of my kitchen. Hong Kong is so beautiful and I really hope that change happens, the capsules would be only good for a time but as time goes on without change, how small of a space will a person be forced to live in?

  19. M Z

    This is communism/socialism. This is what a powerful centralized government does to it's people when there is no incentive to keep them free and healthy. This is what you get when you allow government to have control over everything…including ownership of the very land you step on.

    And yet people keep voting for more and more and larger and larger governments.

  20. RedPillMale

    Having zoning laws doesn't make them free at all. BS.

    By the way, the overprinting of money by the Chinese central banks is the heart of this problem, not low taxes. This is a socialist central planning problem, not free market economics. We're printing tons of money here by way of our Federal Reserve, however the problem is not surfacing because we export our inflation to other parts of the world. Just wait though, when the world starts rejecting the dollar.

  21. TheKing0fHalo

    It’s getting bad everywhere. Here in Florida I’m going to pay $1115 a month for a 550 square foot apartment. Even at $20 an hour wage I barely qualified for the required income to rent it.

  22. Madina Zhanibekkyzy

    Omg,i am student in HK and for now i have dormitory,but after 2 years i must look for apartment.Seems like i will be homeless or live in library

Write a Comment

Your email address will not be published. Required fields are marked *