City with world’s most expensive housing asks: what to do with 40,000 empty quarantine units?

Hong Kong (CNN) Behind the gleaming skyscrapers and multi-million-dollar homes that have made this city the world’s most expensive property market, lies a far less attractive parallel reality: one of the world’s toughest housing crises.

Welcome to Hong Kong, where the average home sells for north of a million dollars — and even a single parking space can go for close to a million — but where more than 200,000 people have been granted concessions to the public. Housing has to wait at least half a decade.

Far below the billionaires’ row of The Peak and its ultra-exclusive properties, which regularly change hands for hundreds of millions of dollars, one in five people live below the poverty line – 50% of the median monthly household income in Hong Kong Before welfare defined as – and many call home a cramped subdivided unit or a cage in a dilapidated tenement block.

According to the city government, the cause of the problem is relatively simple: a chronic lack of supply that is unable to meet the demand of more than 7 million residents in what are already some of the world’s most densely populated areas.

Housing is “at the top of the agenda,” the city’s chief executive, John Lee, insisted in his first policy address in October, as he pledged to build 30,000 units over the next five years – a promise that has attracted criticism from Beijing. The problem follows the order of prioritization by the government.

But critics have long been skeptical Local government’s reliance on land premiums, sales and taxes, which account for about 20% of its annual revenue. Critics point out that this income stream provides an incentive to keep supply tight, doing what can be done to solve the problem.

CNN has asked the Hong Kong government whether its revenue from land sales and premiums affects its housing policy, but has not yet received a response.

Units at the Penny’s Bay Community Isolation Facility are vacant on March 1, 2023.

Now, a curveball has been thrown into the mix by the recent sudden unfolding of the city’s draconian anti-Covid measures which – according to those same critics – presents a litmus test as to the government’s determination to tackle the problem .

Many are now calling on the authorities to repurpose the vast Covid quarantine camps built during the pandemic to isolate hundreds of thousands of people and which are currently empty and unused.

As Paul Zimmerman, a councilor for Hong Kong’s Southern District and co-founder of the urban-planning advocacy group Designing Hong Kong, puts it: “The question now is: what to do with them?”

Covid hangover and a litmus test

The answer to that question may be less straightforward than previously thought.

The camps were one of Hong Kong’s more controversial anti-Covid measures – with the world’s longest mask mandate and mandatory hotel isolation periods of up to three weeks – and at the time of their construction there were protests not only among those who cry Were. Seen as strict quarantine requirements.

The camps also irked critics of the government who said their rapid and expensive construction belied the narrative that Hong Kong’s housing problem was simply intractable.

Hong Kong authorities have not told the public how much the network of quarantine facilities has cost. But according to the city’s financial secretary, its total spending on the pandemic has risen to $76 billion (HK$600 billion) over the past three years. CNN has reached out to the Office of the Chief Executive, the Security Bureau, the Health Bureau and the Development Bureau about the cost of building and running these quarantine camps.

Public housing schemes are usually subject to red tape, but in the case of quarantine camps the government suddenly “finds” about 80 hectares of land and builds 40,000 pre-fabricated metal units in a matter of months.

Brian Wong of the local think tank Lieber Research Community is among those who question why the government can’t take an equally quick approach and bypass red tape and solve what it itself has admitted is a problem. There is an urgent housing crisis.

Wong and others allege the government’s alleged Dependence on land revenue risks turning housing into “a structural problem” that “cannot be meaningfully resolved”.

“Even if the government wanted to make land affordable, they would not do it because there is too much at stake,” said Wong, who has been accused of what he sees as official indecision and inaction. The city comes at a cost. the poorest people.

He sees the empty camps as offering a litmus test of the government’s determination to act and has called for the units to be repurposed into social housing, arguing that it would be “a great shame if those containers were left empty or be destroyed.”

CNN has asked the Hong Kong government what it plans to do with the former quarantine camps. It said it would announce its plans “once a decision has been made”.

small, but still desirable

Of the eight purpose-built quarantine and isolation camps, only three have actually been used; remaining five was placed on stand-by as vaccination rates increased and the number of infections decreased.

The largest and perhaps most notorious of the camps is Penny’s Bay, a site next to Hong Kong’s Disneyland where more than 270,000 people stayed in approximately 10,000 units during its 958 days of operation that ended on 1 March. A second is located next to the Kai Tak cruise terminal and a third near a shipping container port. The rest are located on the northern outskirts of the city near the border with mainland China.

Measuring about 200 square feet, each unit is roughly the size of a car parking space and has a simple toilet, shower and bed. Only a few have kitchens.

Yet, while the units are spartan, many argue that they can still offer an attractive temporary solution for those who cannot afford the city’s high rents. In Hong Kong, even “nano-flats” measuring 215 square feet have recently sold for as much as $445,000 – the equivalent of more than $2,000 per square foot, according to data compiled by property agency Centreline.

Francis Law, who was sent to Penny Bay in late 2022, said that while simple, the facilities were sufficient to meet a person’s basic needs and provide an attractive temporary option for those on the public housing list. Will do

“If the government rents the units for about HK$2,000 to HK$3,000 a month [$254 to $382] And arrange a bus route to the nearest train station, I think it will attract a lot of applicants even though it’s away from the main central business district,” he told CNN.

While some camps have been built on land owned by local tycoons and loaned to the government, some argue that since the units are modular and relatively easily dismantled, they can be moved to more permanent locations. Is – if the government was so inclined.

A temporary isolation facility near the Kai Tak Cruise Terminal in Hong Kong on April 6, 2022.

“Obviously we have land in Hong Kong, we have a lot of rural areas … but we don’t have land that is readily available for residential or commercial development,” said Ryan Ip, vice president and co-chairman of research said the chief in our Hong Kong Foundation think tank.

“The key is whether the government really speeds up its processes.”

getting creative

Others have more creative suggestions, taking inspiration from how some units were temporarily remodeled during the pandemic.

At one point, some units at Penny’s Bay were used to hold a university entrance exam for secondary school students who were close contacts of infected cases; At another time, the camp hosted a small election polling station.

Hong Kong-based architect Marco Siu is part of a group calling for the block in Penny’s Bay to be converted into a temporary health and wellness centre, arguing that it would require only a minimal redesign and that authorities would be able to rebuild it. Should be given the option to open from, if another outbreak should happen.

Zimmerman of Designing Hong Kong said the land next to Disneyland could be used for an expansion of the theme park or repurposed into a new city.

Michael Cheuk, Under Secretary for Security, at the closing ceremony of the Penny’s Bay Community Isolation Facility on March 1, 2023.

Whether the government will heed any of these suggestions remains to be seen. It is still adamant on its intentions.

A spokesperson told CNN that, “Detailed analysis and study will be done with relevant government bureaus and departments. Future plans and arrangements will be announced after a decision is made.”

However, a Development Bureau spokesman said that the units at Penny Bay and Kai Tak were “structurally designed for a life cycle of 50 years” and confirmed that they would be able to be “dismantled, transported and reused in other locations”. designed for.”

For now, anyone hoping to catch a glimpse into the government’s thinking at the finale of Penny’s Bay earlier this month will have been disappointed.

A band played “Auld Lang Syne” as the gate closed, and Undersecretary of Security Michael Cheuk placed a giant cut-out padlock on its bars.

“Penny’s Bay Quarantine Camp has accomplished its mission,” Cheuk told the crowd.

The same words were pasted on a banner at its closed gates.

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