Hong Kong asks: what to do with 40,000 empty Covid quarantine units in housing shortage?

Hong Kong

Behind the gleaming skyscrapers and multimillion-dollar homes that have made this city the world’s most expensive real estate market lies a far less attractive parallel reality: one of the world’s most seemingly intractable housing crises.

Welcome to Hong Kong, where the average home sells for well north of a million dollars – and even a parking space can cost close to a million – but where more than 200,000 people face at least a half-decade wait for subsidized public housing.

Far below The Peak’s billionaire row and its ultra-exclusive properties that regularly change hands for hundreds of millions of dollars, one in five people live below the poverty line – defined in Hong Kong as 50% of the average monthly of household income before prosperity – and many call a cramped subdivided unit or even a cage in a dilapidated apartment building home.

The cause of the problem, according to the city government, is relatively simple: a chronic lack of supply unable to meet the demand of more than 7 million residents crammed into some of the world’s most densely populated neighborhoods.

Housing “is at the top of the agenda”, the city’s chief executive John Lee insisted in his maiden policy speech in October, as he pledged to build 30,000 units over the next five years – a pledge that follows an order from the central government in Beijing to prioritize the issue.

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

CNN has asked the Hong Kong government whether its income from land sales and insurance premiums affects its housing policy, but has yet to receive a response.

Now, the sharp recent revelation of the city’s tough Covid measures has thrown a curveball into the mix that – according to the same critics – offers a litmus test of the government’s resolve to tackle the problem.

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

As Paul Zimmerman, a councilor in Hong Kong’s southern district and co-founder of urban planning advocacy group Designing Hong Kong, put it: “Now the question is: what do we do with them?”

The answer to this question may be less simple than it seems at first.

The camps were one of Hong Kong’s most controversial anti-Covid measures – along with the world’s longest mask mandate and mandatory hotel isolation of up to three weeks – and were opposed at the time of their construction not only among those who complained which they saw as draconian quarantine requirements.

The camps also drew cries from government critics who said their quick and expensive construction gave the lie to the narrative that Hong Kong’s housing problem was simply unsolvable.

Hong Kong authorities have not disclosed to the public how much the network of quarantine facilities costs. However, total spending on the pandemic over the past three years has reached US$76 billion (HK$600 billion), according to the city’s financial secretary. CNN has contacted the CEO’s office, the Office of Security, the Office of Health and the Office of Development about the cost of building and operating these quarantine camps.

Public housing projects are usually subject to years of red tape, but in the case of the quarantine camps, the government suddenly managed to “find” about 80 hectares of land and build 40,000 prefabricated metal units in a matter of months.

Brian Wong, of local think tank Liber Research Community, is among those questioning why the government cannot take a similarly quick approach and bypass red tape to solve what it has acknowledged is an urgent housing crisis.

Wong and others support the government’s claims Reliance on land revenue risks turning housing into a “structural problem” that cannot be “meaningfully solved”.

“Even if the government wants to make the land affordable, it won’t because there’s too much at stake,” said Wong, who is critical of what he sees as official indecision and inaction at the city’s expense. poorer people.

He sees the empty camps as a test of the government’s resolve to act and called for the units to be turned into social housing, arguing it would be “a real shame if these containers sit empty or go to waste”.

CNN asked the Hong Kong government what it plans to do with the former quarantine camps. She said she would announce her plans “once a decision is made.”

Only three of the eight purpose-built quarantine and isolation camps have actually been used. the remaining five they were put on hold as vaccination rates rose and infection numbers fell.

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

At around 200 square feet, each unit is about the size of a car park and includes a simple toilet, shower and bed. Only a few have kitchens.

But while the units are spartan, many argue they could offer an attractive temporary solution for those who can’t afford the city’s high rents. In Hong Kong, according to data compiled by real estate agency Centaline, even 215-square-foot “nano-apartments” have recently sold for as much as $445,000 — the equivalent of more than $2,000 per square foot.

Francis Law, who was sent to Penny’s Bay at the end of 2022, said that although simple, the facilities were sufficient to meet a person’s basic needs and would offer an attractive temporary option to those on public housing lists.

“If the government rents the units for about HK$2,000 to HK$3,000 a month [$254 to $382] and arranges a bus ride to the nearest train station, I think it would attract a lot of applicants, even if it’s far from the main central business district,” he told CNN.

While some of the camps have been built on land owned by local tycoons and loaned to the government, some argue that as the units are modular and relatively easy to dismantle, they could be moved to more permanent locations – if the government were 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-head of research at the Hong Kong Foundation think tank.

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

Others have more creative suggestions, drawing inspiration from how some of the units were temporarily repurposed during the lull in the pandemic.

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

Hong Kong-based architect Marco Siu is part of a group calling for the blocks in Penny’s Bay to be turned into a temporary health and wellness centre, arguing it would require only minimal redesign and give authorities the option to reopen it if new epidemic occur.

Zimmerman, of Designing Hong Kong, said the land next to Disneyland could be used to expand the theme park or be turned into a new city.

Deputy Security Minister Michael Cheuk at the Penny's Bay Community Isolation Facility topping out ceremony on March 1, 2023.

Whether the government will consider any of these proposals remains to be seen. So far she has commented on her intentions.

A spokesperson told CNN that “a detailed analysis and study will be conducted with the appropriate government offices and agencies. Future plans and arrangements will be announced after a decision is made.”

However, a Development Office spokesman added that the units at Penny’s Bay and Kai Tak were “structurally designed for a 50-year life cycle” and confirmed they were designed to be “dismantled, transported and reused at other sites”.

For now, anyone hoping for a glimpse into the government’s thinking at the Penny’s Bay closing ceremony earlier this month is likely to be disappointed.

A band played “Auld Lang Syne” as its gates were closed and Michael Cheuk, the undersecretary for security, placed a giant cut-out padlock on its bars.

“The Penny’s Bay quarantine camp has accomplished its mission,” Cheuk told the crowd.

These same words were plastered on a banner hanging at its closed gates.

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