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

Hong Kong (CNN) Behind the glittering skyscrapers and million dollar homes that made this city the most expensive property market in the world lies a much less attractive parallel reality: one of the world’s most seemingly intractable housing crises.

Welcome to Hong Kong, where the The average home sells for north of a million dollars — and also a parking lot can go for almost a million – but where more than 200,000 people face expectations of at least half a decade for subsidized public housing.

Where far below the billionaire’s row of The Peak 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 family’s median monthly income before welfare – and many call home a cramped divided unit or even a cage in a dilapidated block of flats.

The cause of the problem, according to the city government, is relatively simple: a chronic lack of supply that is unable to meet the demand of more than 7 million residents crowded into what are already some of the densest neighborhoods people of the world.

Accommodation “top of the agenda”, the chief executive of the city John Lee insisted on his the maiden policy address in October, as it promised to build 30,000 units in the next five years – a promise that follows an order from the central government in Beijing to prioritize the problem.

But critics have long been skeptical of the the trust of the local government on land premiums, sales and taxes, which count about 20% of their annual income. Critics say this revenue stream provides an incentive to keep supply tight, limiting what can be done to fix the problem.

CNN asked the Hong Kong government if its income from the sale of land and premiums affect its housing policy, but has not yet received an answer.

Penny’s Bay Community Isolation Facility units are vacant on March 1, 2023.

Now, the recent sudden collapse of the city tough anti-Covid measures has thrown a curveball into the mix that – according to the same critics – offers proof of the government’s determination to solve the problem.

Many are now calling on the authorities to bring back the vast Covid quarantine camps that the city built during the pandemic to isolate hundreds of thousands of people and which currently lie empty and unused.

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

The Covid hangover is a litmus test

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 – by far the longest mask mandate in the world and mandatory isolation of the hotel periods of up to three weeks – and they were opposed at the time of its construction not only among those who denounced what they see as draconian quarantine requirements.

The camps also drew the ire of government critics who said their rapid and expensive construction undermined the narrative that Hong Kong’s housing problem was simply intractable.

Hong Kong authorities have not disclosed to the public how much the network of quarantine facilities cost. But its total spending on the pandemic in the past three years has reached $76 billion (HK$600 billion), according to the city. financial secretary. CNN contacted the Office of the Chief Executive, the Office of Security, the Office of Health and the Office of Development about the costs of building and managing these quarantine camps.

Public housing plans are usually subject to years of bureaucracy, 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 few months .

Brian Wong, of local think tank Liber Research Community, is among those who wonder why the government can’t take a similarly quick approach and bypass bureaucracy to solve what he himself has acknowledged is an urgent housing crisis.

Wong and others support the government’s allegation The land revenue trust is at risk of turning housing into “a structural problem” that cannot be “resolved in a meaningful way”.

“Even if the government wants to make the land accessible, it will not do so because there is too much at stake,” said Wong, who is critical of what he sees as official indecision and inaction that he says comes at the city ​​expense. the poorest.

He sees that the empty fields offer a fire test of the government’s determination to act and asked to bring back the units in social housing, arguing that it would be “very embarrassing if those containers are left empty or wasted”.

CNN asked the Hong Kong government what it plans to do with the former quarantine camps. He said he would announce his plans “after a decision has been made.”

Small, but still desirable

Only three of the eight purpose-built quarantine and isolation camps were actually used; the remaining five they have been put on stand-by while vaccination rates rise and the number of infections falls.

The largest and perhaps most infamous of the camps is Penny’s Bay, a site near Hong Kong Disneyland, where more than 270,000 people stayed in nearly 10,000 units during its 958 days of operation ending on 1 March. Kai Tak Cruise Terminal is a third nearby shipping container port. The rest is spread along the northern outskirts of the city near the border with mainland China.

Measuring about 200 square feet, each unit is roughly the size of a parking space and contains a simple toilet, shower and bed. Only some have kitchens.

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

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

“If the government rents the unit for about HK$2,000 to HK$3,000 per month [$254 to $382] and organize a bus route to the nearest railway station, I think it would attract a lot of applicants, even if it is far from the main central business district,” he told CNN.

While some of the camps were built on land belonging to local tycoons and soon to the government, some argue that, as the units are modular and relatively easily dismantled, they could be moved to more permanent locations – if the government was 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 what we don’t have is land that is readily available for residential or commercial development,” said Ryan Ip, vice president and co-head of research. at the think tank of our Hong Kong Foundation.

“The key is whether the government will really speed up its procedures.”

Get creative

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

At some point, some of the units in Penny’s Bay were used to hold a university entrance exam for high school students who were close contacts of infected cases; at another time, the camp welcomed a small electoral voting section.

Hong Kong-based architect Marco Siu is part of a group calling for blocks of Penny’s Bay to be turned into a temporary health and wellness center, arguing that this would require only minimal redesign and give the authorities the option to reopen in case of another fire. it happens

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

Under Secretary for Security, Michael Cheuk, at the Penny’s Bay Community Isolation Facility closing ceremony on March 1, 2023.

It remains to be seen whether the government will take these suggestions into account. So far he has been tight-lipped about his intentions.

A spokesman told CNN that “Detailed analysis and study will be carried out with the relevant government offices and departments. Future plans and arrangements will be announced after a decision is made.”

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

For now, anyone who hopes to see the government’s thinking at the closing ceremony for Penny’s Bay earlier this month is likely to disappoint.

A band played “Auld Lang Syne” as its gates closed and Michael Cheuk, the Under-Secretary for Security, placed a giant padlock on its bars.

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

These same words were affixed to a banner hanging across its closed gates.

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