Inside Hong Kong’s cage homes

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.

Comments

  1. Post
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    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

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    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.

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    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.

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    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?

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    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.

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    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.

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    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.

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    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

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    SavedByGrace

    Why don’t you tell the truth? Why don’t you explain the difference between free market capitalism and crony capitalism? Instead of acting like the free market created this problem when your experts explained that its government zoning. Get the government out, open up the free market and watch their economy boom.

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    Richard Hofman

    These are the sad consequences of Chinese lack of democracy and full freedom!
    Then such extremes like in Chinese territory Hong Kong would never happen!
    Once all China will enjoy its full democracy and freedoms then the USA will become to be an absolute world outsider compared to them!!!
    Asia is one extreme to another and the people are forced to deal with these extremities!

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    Trịnh Tuyền

    It makes you wonder, what is the true value of the house. What matter more? Spending your life in an "expensive" cage house in the city, or in a "cheap" spacious house in the countryside. If it was me, I'd probably rent out the city house and use that money to live in the countryside.

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    Trịnh Tuyền

    Can you live in China and drive to HK to work? I've heard from some people that you can live in Malaysia and go to Singapore just to work.

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    Anthony Coca

    I’ve seen dog kennels that are more spacious then these “living quarters”.
    How sad. How depressing. To be so constricted in life must take its toll.
    What kind of outlook do they have when they toil away at work all day only to return home to a cage as if they were no more than human hamsters? I can’t imagine it to be a happy or fulfilling existence.

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    Shadows Within

    That's not a good way to treat human beings, I get that they don't want to raise taxes.
    However people living that way, does not seem good. Business makes a lot of money, maybe raise corporation taxes.
    Business can afford it, whereas those people's health cannot.

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    Joe Shmoe

    Oh boy and I thought my apartment in Tokyo was TINY… No kidding but these people live in a space I called my bathroom. And at least I had one…

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    mommy licious

    Hong Kong is beautifil outside, but inside, the people are suffering.. go to mainland china and the space is very vast..even the bike lanes are the size of car lane

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    LMS

    An explanation? 1-2 billion people dude. Do you need more explanation then that? I dont think so. We have issues over here and we are just 10 million people. Its not like we build buildings that fast.

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    2011Mraym

    Thank you . That is one of the root causes of current social unrest. Hong Kong people have been so patient to see the government inch forward. The disparity of the rich and the poor is at a tipping point, however , the government was not sensitive enough to sooth the hardship and discontent of Hong Kong people. People are desperate for change.

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    陈明涛

    Your video has brought too much politics… Hong Kong's real estate is controlled by the four local families. You better understand .ok. This is the Western media's discrimination against China. This is the result of insisting on Hong Kong people ruling Hong Kong for 50 years. Finally, the UK is really a crowbar.

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    Fat Cat

    I think I'd rather be homeless than live in a "home" like this. Because then, if I get a bike, the whole city can be my home.

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    Raymond

    Heritage Foundation. This is what these right wing lunatics want for America. Cage homes, coming to a boring suburb near you.

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    Alexa Soundzen

    may god protect these habitants from a fire in one of those towers sighs because fire truck ladder wont reach that huge middle range nor an helipad on the roof

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    Patthon Sirilim

    this is the real reason for the hongkong riots no matter how much money there is when alot people is force to live a space worst then my dog and im from thailand and in no way very rich man you have revolution on your hands

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    Like a Pro

    Few years later: HEAD OF THE LINES
    Mongolia is now the most densely populated country in the world followed by Namibia
    If didn’t get what i meant is that those two country have too much land too spare and ppl r going to immigrate there sooner or later that’s if overpopulation doesn’t stop,we’re talking crisis here.

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    Henry Hernandez

    3:12 I live in San Francisco, it's not that bad compared to Hong Kong, you pay like $1M for like a entire apartment the size of hella parking spaces

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    Tony Conrad

    In a way it is easier to share a kitchen if you are all Chinese. It wouldn't work in muilti cultural Britain which is beginning to have massive space problems because of continuous mass immigration.

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    TeaAlamode

    When I went to Hong Kong for a vacation,, all i could see were apartment buildings. and there were a lot. Im pretty sure the ones in the beginning are the ones I saw. I did not see a single house.

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    kkura chan

    The conclusion from this is that: Hong Kong's government cares about their own and investors' bank accounts much more than their people- the welfare of the masses. And they're proud of it.

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    iwe s

    I live in Indonesia, my income is only $200 per month. I feel very lucky, even though I live in a 3rd world country but I can own a 100m2 house and its much better than living in a cage like them. (sorry for my poor English)

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