Upward mobility of bottom rung of housing ladder : investigate the challenges face by public rental housing tenants during the transition of public rental housing to subsidized sale flats

Abstract

The housing ladder can be viewed as the vision of a country's housing strategies, as a positive housing ladder has the effect of "an increase of housing equity at the bottom of the ladder tends to translate into a trading up activity that will both increase housing market turnover and buoy up the entire housing market" (Ho and Wong, 2008). However, there is an issue that the turnover rate of public rental housing is reported to be remarkably low, merely reaching 1%, indicating a severe problem in Hong Kong's housing development, which is lacking upward mobility on the bottom rung of the housing ladder. It reflects that the majority of PRH tenants are stuck in the PRH and are unable to progress to the next milestone, which is achieving homeownership by purchasing a subsidized sale flat. It is completely undermining the positive housing ladder. In this regard, quantitative research has conducted to investigate what is the challenges are those PRH tenants face and what is the problem of housing policy leading to the failure to promote upward mobility. The findings show that most of the respondents are concerned the financial issues as various extra costs have to be paid by a homeowner, not only the rental fee. Besides, as they have to dedicate a lot of money and time, availability and accessibility are also the concerns of PRH tenants to find the best housing options. Regarding this point, household composition plays a crucial role even overriding other factors like age and education level that would normally predict higher residential mobility as they typically have higher housing demands, more caregiving responsibilities, and a limited availability of appropriate housing options. The challenges that PRH tenants are facing are also related to the imperfect housing policy, including over-emphasizing public rental housing, indulging in white form secondary market property speculation, inefficient planning of the Hom Ownership Scheme (HOS), and selling financial assistance. As a result, policymakers should prioritize the long-term development of Hong Kong's entire housing ladder. This includes allocating resources to the construction of subsidized sale flats (SSF) and adjusting the PRH-to-SSF ratio to 5:5. Furthermore, the study suggests that the practice of property speculation in the white form secondary market should be addressed because it reduces affordability for PRH tenants. The planning and location selection for new SSF developments are also emphasized as critical factors that can influence accessibility and desirability for PRH residents. Last but not least, the study suggests providing after-selling financial assistance as an adjustment period to assist PRH tenants in adapting to a new life pattern.