Opinion | Attention to ripple effect of market when dealing with subdivided units
Hong Kong Chief Executive John Lee Ka-chiu proposed the establishment of the Task Force on Tackling the Issue of Subdivided Units (SDUs) and conduct an in-depth investigation into SDUs within 10 months in his Policy Address delivered last year. It is learned that the Task Force will submit a report.
Different political parties and professional organizations have put forward proposals to the government recently. For example, the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) has put forward 18 proposals to the Housing Bureau, including the establishment of an SDU registration system, the abolition of SDUs in phases, and the establishment of a minimum standard for the area and height of SDUs, etc.
It is evident from the government policies and the initiatives of political groups that there is an inevitable trend toward the abolition of substandard SDUs. I think the government and various sectors of the community should not overlook the chain effect on the market brought about by the improvement of SDUs as there may be an increase in rents because of the reduction of SDUs, which might greatly influence the life of SDU tenants.
There are about 110,000 SDUs in Hong Kong, of which nearly 30,000 are substandard, according to the DAB's estimation. Therefore, the DAB has put forward 18 proposals for "Bidding farewell to Subdivided Units 3.0", including adopting a scoring system for eradication of substandard SDUs in phases, and formulating a plan of enforcement based on a risk rating system, so that substandard SDUs of higher risks will be eradicated first.
Figures estimated by the DAB or other organizations may be overestimated or underestimated. For example, the figures may be underestimated if SDUs in industrial buildings are not included in the relevant figures because about 12,000 households rent SDUs in industrial buildings in Hong Kong, according to the estimation of some social organizations.
So is it possible to provide Light Public Housing (LPH) units and Transitional Housing units for about 40,000 SDU tenants?
I think the government and even the political parties have anticipated this problem, and thus proposed to allow SDU landlords to improve the environment of SDUs first, and eradicate substandard SDUs in phases.
However, another question dawns on me. There will be a reduction in the supply of SDUs in the market since substandard SDUs are eradicated in phrases. For landlords, they need to transform substandard SDUs into standard ones, which may cause them to raise the rent. There are probably some SDU tenants who can not afford the higher rents of standard SDUs, which is a dilemma that we do not want to witness.
As a result, it is supposed to consider the ripple effect of the SDU market when dealing with the issue. Otherwise, a series of social problems will arise if ordinary people can not afford the rent of standard SDUs.
(English editor: Anson)
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