Housing, Home Ownership and Social Change in Hong Kong

James Lee

• Publisher: Taylor & Francis
• Year: 2019
• Print ISBN: 9781138340589
• eBook ISBN: 9780429803420
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Social Policy
• Index: Politics & International Relations

First published in 1999, this volume examines the issue that, in the last two decades, the housing system in Hong Kong has witnessed a slow but consistent transition from a tenure dominated by public rental housing to one dominated by private home ownership. This book seeks to explain the unique social organization of home ownership in contemporary Hong Kong. Specifically, the book deals with the genesis of home ownership from three areas: housing histories, family culture and capital gains from home transactions. It is agreed that extreme deprivations in housing conditions in early lives, a strong family culture of mutual help as well as unprecedented capital gains, all contribute towards explaining the complex nature of home ownership growth. In conclusion the book suggests that with China regaining sovereignty after July 1997, the social organization of home ownership will be further complicated by more internal migrations from other parts of China, making housing problems even more acute.

Part One

THEORY AND METHOD

1 Introduction

This study starts with three simple observations of the housing scene in Hong Kong in the recent two decades. First, house price inflation in Hong Kong has been extremely phenomenal. At the peak in mid-1997, average house price of a 500 square feet flat was 15 times of the price in 1980. Even after the Asian economic crisis, house price in mid-1999 is still twice as much as houses in the Silicon Valley, the most expensive house price regime in USA. Why is there such phenomenal growth in house prices? Second, while housing is not affordable for many, Hong Kong sees many middle class people craving for home buying, mobilizing all kinds of financial resources they can lay their hands on, including hard earned money from their parents. Third, buying and selling of homes has become an extremely important part of middle class life in Hong Kong. Many people have made substantial capital gains through home purchase. There are claims that in Hong Kong everyone is addicted to a home buying culture. To what extent are these observations true and what are their social implications?

These initial observations on the Hong Kong housing system form the basis of the current study. However, the rationale of the study emanates from a fundamental concern with the way housing studies have hitherto been developed. Over the last three decades, housing sociologists have developed keen interest in identifying social processes underlying housing development. Their interests have largely been concerned with the way growth in home ownership has affected consumption and social divisions. One of the key theoretical arguments put forth is that mass home ownership represents a new social division. While this theoretical debate has somehow subsided in recent years, its influence on home ownership studies could not be neglected. This book argues that contemporary housing research has adopted a rather narrow and confining focus, to the extent that it has effectively neglected a number of important social processes, for example, the role of the family, cultural values, and their relation to home ownership. Housing studies rarely confront the question of place-boundedness, which implies that the housing system represents the result of a complex system of interactions between the individual, the family, the state, the housing market and the society over time. Housing theories were often applied uncritically across national boundaries, to the extent that they hindered the development of a fuller body of research - one that is more sensitive to local culture and specificity (Williams, 1983; Ball, Harloe & Martens, 1988). Although some researchers have sought to remedy this deficiency at some point, development to this end has remained relatively weak (Dickens, Duncan, Goodwin & Gray, 1985, Forrest & Murie 1995).

One purpose of this study is to bring back the discussion of the role of family and culture into the main stream discussion of home ownership and social change. In this respect, Hong Kong is taken to be a case analysis since the city offers a good example of cultural and institutional diversity between the East and the West. This then leads us back to the primary focus of this book - home ownership and social change. The transformation of Hong Kong from a predominantly public rental tenure to burgeoning home ownership represents the most dramatic post-war social change. The shifting tenure and the vibrant housing market have profoundly transformed Hong Kong’s urban structure and the political economy. Anyone walking around the Eastern District, Hong Kong Island, or strolling along the promenade of Tsim Sha Tsui, Kowloon Peninsula, could easily notice the massive urban transformation of the built environment. This book explores how the growth of owner-occupation in recent decades have been affected by both societal and policy shifts. How owner-occupation as an emerging tenure has impacted upon social life and opportunities? How individual housing experiences have come to be shaped by societal forces? In sum, it is about the complex relationship between a shifting housing sector within a rapidly changing society.

This study also arises out of a discontent with the current state of local housing research. For two decades, housing studies have been largely dominated by economic geography and traditional social policy analysis focusing largely on the public housing sector. Little research has been devoted to home ownership. In addition, traditional local housing policy analyses have been largely confined to the housing sector itself and rarely situate the housing question in a wider social context. It is argued that Hong Kong needs a radically new focus on housing research by re-instituting home ownership studies into local housing studies.

Organization of the Book

Following the Introduction, Chapter two provides a general mapping of the social, economic, and political restructuring processes that have taken place in Hong Kong over the past two decades and examines in detail how they bear upon the main focus of this book. The chapter revolves around three issues: (1) the loss of legitimacy in governance by the receding colonial government before 1997; (2) the economic restructuring of Hong Kong from a manufacturing-centred economy to a service-based economy since the 1980s; and (3) the emergence of the middle class as a major contender for housing resources. The chapter concludes by posing the housing question as having both an economic as well as a social root. It is suggested that local housing research has thus far been largely dominated by economics and related studies based on rationality to the extent that social explanations of the housing question are often undermined or trivialized by economic explanations.

Chapter three describes the structure of housing research in Hong Kong as well as the social organization of housing and home ownership. The aim of the chapter is to provide a socio-spatial mapping of the housing situation. Given the fact that owner-occupation is a relatively recent phenomenon, it is argued that the middle class is facing the greatest challenge in meeting their housing needs. The chapter also demonstrates that housing research thus far has been much biased towards a uni-focus orientation and needs to be properly expanded to cover home ownership. The lack of local home ownership research means more than just a research gap. It is a form of structural hegemony in research tradition aiming at legitimizing the role of the government in housing intervention. As a concluding remark, the chapter briefly introduces the methodological basis of this study and explains why a housing history approach is a preferred method.

Chapter four outlines the contours of contemporary theoretical debates in home ownership in Western literature. I would argue that deeply embedded in the rhetoric of Western housing studies is a social relation of housing that is highly ethnocentric. It is, therefore, necessary to carefully examine the ideological underpinnings of these debates when they are applied to societies with a different cultural background. The chapter examines two broad debates in home ownership: the consumption sector cleavage debate and the meaning of home. Using the work of Bourdieu, the chapter tries to develop a cultural perspective as an alternative theoretical framework.

Chapters one to four together form the backbone of Part One of the book, which attempts to deal with issues surrounding housing policy, home ownership and housing theories as against the socio-political context of Hong Kong in the post-war era. From Chapter five onwards, the book turns to the main body of this study. Empirical results have been organized around three themes: (1) housing history and social values; (2) family and its impact on housing choices and home ownership; and (3) capital gains from home ownership and their impact on the formation of middle class. The purpose of Part Two is to delineate the relationship between home ownership, family and class formation.

To illustrate the importance of an individual’s early housing experience and its impact on housing consumption, Chapter five provides a qualitative description of individual housing histories for the period from the 1950s to the 1970s. It goes from inner-city old tenements, squatter huts, to the first resettlement housing estates built by the government. It reveals a housing picture of extreme spatial deprivation. This carries deep impacts on an individual’s desire for home ownership.

Chapter six focuses on the relationship between home ownership and the Chinese family. The broad theoretical question being addressed is how important is inter-generation family support in home financing contributes to the development of home ownership. The chapter concludes by challenging some of the traditional assumptions in Western home ownership studies which tend to take family relationships as given and fail to take into account the impact of the family on the desire for home ownership.

Chapter seven takes on board one of the most salient themes of Western home ownership studies - capital accumulation through home ownership. It examines the relationship between middle class formation and wealth accumulation through house price inflation. The findings of this study reveal that, while the wealth accumulation effect of home ownership fragments the middle class, on the whole, it is fair to say that positive wealth accumulation effect of home ownership far outweighs the burden of home financing. It is also argued that the enormous wealth accumulation opportunities of home ownership in the past two decades have exacerbated an already divided middle class. This poses a tremendous threat to the balance of power between various sectors of an already politically fragmented society.

Chapter eight is divided into two sections. The first section reexamines the major findings and debates advanced in this book by linking it to a broader context - housing policy in a small high-growth Asian city. Based on the discussions surrounding the following four factors: (1) extreme geographical constraints; (2) impact of an individual’s housing history, (3) the influence of the Chinese family, and (4) the wealth accumulation effect of home ownership, the chapter examines the social consequences of a home ownership policy in a congested and high-growth city. The second section of the chapter tries to make a preliminary evaluation of the impact of the recent Asian economic crisis on home ownership. It is argued that for a high-growth, export-oriented city like Hong Kong, home ownership has both a stabilizing and destabilizing effect. A housing system so much dependent on home ownership could be highly risky for both the individual and the economy. Hence, the state must take great caution not to adopt any policy measures which, intended or unintended, increase the vulnerability of the housing system. As far as Hong Kong is concerned, the problem lies in the social construction of home ownership as a preferred tenure. It is argued that, within an inherently constrained environment like Hong Kong, housing policy choices are extremely limited. Therefore, it is more a question of what modes of state intervention in housing rather than what is the best tenure choice. The chapter concludes by calling for a thorough re-examination of role of the state in housing.

2 Socio-Political Change, Economic Restructuring and the Housing Question

By Western standard, Hong Kong is not a democracy. Until 1 July 1997, when sovereignty was returned to the People’s Republic of China under the Sino-British Agreement, Hong Kong was still very much a British colony in the legal and political sense. The last British-appointed governor, Chris Pattern, reiterated this point all the more clearly during his first two years of governorship in 1994. However, Hong Kong society had undergone tremendous changes in the last two decades. Such changes were unprecedented and had profound impact on social development. While the British government still exercised considerable control in its daily administration of Hong Kong during the transition period, the British colonial legacy was fast fading. In many ways, Hong Kong was already well advanced into Chinese rule before 1997. Major public works projects, such as highway construction, new container terminals and the new airport construction, had to seek the consensus of the Chinese government before they could be effectively implemented. For the ordinary people, the hard fact to swallow was that they must look North instead of West for solutions to their problems. In the decade prior to 1997, political groups were travelling much more frequently to Beijing for consultation on major policy issues rather than looking up to the colonial government for support. In this chapter, I shall demonstrate that ahead of the 1984 Sino-British Agreement, Hong Kong had already set in motion a number of social processes that eventually brought important bearings on the housing market. The combined effects of these processes provided the necessary social conditions in predisposing Hong Kong for an impending housing crisis. In particular, this chapter will examine three processes, namely: (1) political restructuring; (2) economic restructuring; and (3) the emerging middle class. The main argument is that rapid socio-political transformation in the last two decades has greatly affected housing development and home ownership. To unravel the complexity of the Hong Kong housing question, it is necessary to first make explicit these social processes.

The Crisis of Legitimacy: Political Restructuring and the 1997 Question

Hong Kong had never had an elected political leader. Before 1997, the colonial governor, who was appointed by the Queen through the recommendation of the Foreign and Commonwealth Office of the British government, was the Chief Executive of Hong Kong. He was assisted by two councils: the Executive Council and the Legislative Council. The Executive Council, which was composed of appointed members including important heads of government departments and community leaders, claimed to represent important factions of social and economic interests and acted as the central decision-making body of the government. The Legislative Council, which enacts legislation and approves the government budget through its Finance Committee, was composed largely of appointed members from a very exclusive group of business and community leaders. Through a public appointment system, a unique blend of politics called the politics of administrative absorption, where the government skillfully screened and absorbed indigenous political leaders into the central decision-making council to ensure political acquiescence, had successfully come to dominate the Hong Kong political arena for the past hundred years (King, 1975).

Indeed, this political structure was what happened before the 1980s. To a great extent, this constituted the backbone of legitimacy for the colonial government before that period. Nonetheless, when the Sino-British Agreement was reached in 1984, both the Chinese and the British governments were well aware that legitimacy was no longer a matter of administrative absorption politics. For the Agreement to be widely accepted, there must be new political devices to ensure the continuation of the much needed legitimacy and political stability for a smooth transition in 1997. To achieve this, the first White Paper: The Future Development of Representative Government in Hong Kong, was published in 1984. The major recommendation in the White Paper was the introduction of a minimal representative element to the legislature through the introduction of the functional constituencies, members of which were indirectly elected through various occupational sectors (e.g., business, banking, engineering, legal and medical professions, etc.). This particular constitutional change was meant to kill two birds with one stone. First, it aimed at achieving political consensus through the introduction of corporatist strategies, but without conceding any diminution of government’s authority (Scott, 1989). Second, for a highly sensitive period of Sino-British relations in the postagreement era, it was thought that minimal changes to the legislature would be welcomed by the Chinese government. Despite all the good intentions, the plan failed to work. The 1984 proposal unintentionally triggered a time bomb in 1987.

The Touchstone of Post-agreement Politics: The 1987 Review on Direct Elections

One of the recommendations of the 1984 White Paper suggested that direct elections on a geographical constituency base might be considered in the 1987 Review. This created both political obligations for the government as well as high hopes amongst emerging liberal political groups. In 1987, the government published a Green Paper to seek the views of the community on how a system of representative government should be further developed. This marked the climax of three years of fervent political debates, where liberal political groups seized the opportunity to advance the ideas of direct elections to the legislature. A White Paper was finally published in February 1988, outlining the political development up to 1991. The essence of the paper as it stood, with absolutely n...

Table of contents

• Cover
• Half Title
• Dedication
• Title Page
• Copyright Page
• Contents
• Figures and Tables
• Acknowledgements
• Exchange Rate
• Part One: Theory and Method
• Part Two: Housing History, Family and the Middle Class
• Part Three: Conclusion and Discussion
• Appendix A: Interview Guidelines
• Appendix B: Profile of Homeowners
• Appendix C: Outline Map of Hong Kong
• Bibliography
• Index