Rent soars for Hong Kong cage dwellers
By Chris Stewart and Olivia Chung
HONG KONG - The downturn in Hong Kong's economy is turning into good news for
landlords - and bad news for thousands of tenants who sleep in cramped metal
cages rather than live on the streets of Asia's most expensive city outside
Japan.
The cage homes, which resemble livestock coops, have been a running scandal in
Hong Kong's housing market for decades, yet rather than disappear or be
legislated out of existence, the number and cost of the accommodation are
rising.
About 100,000 tenants are now paying for such squalid living space; at times
the cages piled one on top of the other, with rents that can be higher than the
amounts the city's sun-and-sea lovers
hand over for beautiful spacious settings in the upmarket south of Hong Kong
Island.
Cage dwellers are paying up to HK$93.30 (US$12) per square foot, says a report
by the Society for Community Organization (SCO), for a space barely big enough
for a mattress with wire mesh surrounding it to protect their few possessions.
That compares with HK$72 per sq ft monthly rent for a four-bedroom, 3,900 sq ft
home at Three Bays, a block of luxury flats in the coastal village of Stanley,
according to the website of Centaline, a property company.
One cage landlord, surnamed Wong, leases out his 700 sq ft flat to 12 cagemen
in Sham Shui Po, an aging urban area on Kowloon, the part of Hong Kong on
mainland China. Demand for his cage homes is on the rise, due to the financial
crisis, he said.
"The rents are likely to grow as the demand for cage homes is on the increase
amidst mounting job losses," said Wong, who is short of sympathy for his
tenants' dire circumstances. "The cage homes are better than the streets or
living under bridges," he said.
The median rent for a cage has jumped by more than one-third in the past three
years, to HK$60 per sq ft from HK$44.40 in 2006, according to the SCO, and are
up from HK$40 in 2004. Some of that increase has come as average prices in Hong
Kong's volatile housing market rose about 25% in the eight months to August,
according to Centaline.
Demand for cages is growing as the city has bent under the global economic
crisis, and as international trade with China and related services, Hong Kong's
lifeline to prosperity, have taken a hammering.
Unemployment is running at a four-year high of 5.4%, with 203,000 people out of
work, compared with 3.5 million holding on to a job.
Hong Kong's economy grew a seasonally adjusted 3.3% in the second quarter from
the previous three months after four consecutive quarters of contraction, led
by export and domestic consumption.
Even so, those green shoots may soon wither. Hong Kong exports fell about 20%
in July from a year earlier to HK$212.3 billion, after declining 5.4% in June.
Imports fell 17.8% in July from a year earlier, leaving a trade deficit of
HK$21.7 billion. Shipments to the United States slumped 29.4%, sales to the UK
tumbled 30.7%, and exports to Germany slid 29.%.
SCO director Ho Hei-wah said people who live in the cages include the
unemployed and low-income individuals such as construction workers, and it is
the construction sector where the unemployment rate is the highest, at 11.8% in
the three months to June. That marks a slight improvement from the 12.1% in the
March to May period and the 12.7% seen from February to April, which could
point to an easing of demand for cage homes and the prospect of a fall in
rental cost.
But unemployment will remain high for some time, especially with thousands of
students entering the job market in August and September, Secretary for Labor
and Welfare Matthew Cheung said August 20.
The monthly rent of a cage at about HK$1,000 to HK$1,500 swallows up to 40% of
a cage dweller's income, according to the SCO report. For that, cage dwellers
have to share toilets - on average one toilet is available for every 10 lodgers
- and the most basic of kitchens.
The research covered cage homes and partitioned rooms in decaying districts
such as Sham Shui Po, Tai Kok Tsui and Wan Chai. About 100,000 people live in
cage homes, according to the government.
The cage-home scandal is resurfacing in the public domain as the disparity in
wealth among Hong Kong residents is widening to alarming levels. Hong Kong has
the highest Gini coefficient, a measure of such disparity, among all Asian
cities, according to the 2008 Human Development Report by the United Nations.
The coefficient rose to 0.533 in 2006, the highest since records began in 1971.
The closer a city's score is to zero, the greater the equality of its economy.
The UN-HABITAT report on the "State of the World's Cities 2008/9: Harmonious
Cities" gives the urban Gini coefficient of Asian cities at 0.39, slightly
below the unacceptable inequality threshold of 0.4.
The increasing wealth gap was brought to the attention of the government in
January, when Cheung Kwok-che, a member of the Legislative Council, cited the
UN report and the fact that Hong Kong's wealth disparity was "well above the
alert level".
Cage people have an alternative, a spokesman of the Housing Department said -
they could apply for public housing flats with rents as low as about HK$650.
The process might take about three years.
One cage dweller, Cheung, who lives in Sham Shui Po at a monthly rent of about
HK$1,300, was dismissive of that choice. "In case of emergency, it might take
seven to eight months" - a figure also given by the Housing Department for an
"emergency" allocation. Even when public flats become available they "are
poor", Cheung said, often where people had just died, or two or more storeys up
in buildings without lifts.
Yet the cramped and often fetid conditions he endures are appalling.
"I usually hit my head on the wire and sweat in the 33 degrees [Celsius] heat
of the past few weeks," said Cheung, who lives on about HK$3,500 a month in
government benefits. "The temperature inside the cages can be two to three
degrees higher than what they are outside. It's really uncomfortable, and
sometimes I cannot sleep until after 5 in the morning."
Cockroaches, wall lizards, lice and rats are common. "Sometimes I am worried if
lizards or cockroaches will crawl into my ears at night," said Cheung
One-third of Hong Kong's seven million residents live in public housing, in a
city that claims to have the most billionaires in Asia, a recent Time magazine
report said. Hong Kong is Asia's third-most expensive city, ranking only after
Japan's Tokyo and Osaka, according to a 2009 ranking by Forbes. In world terms,
it ranked fifth, one notch higher than its March 2008 ranking.
Olivia Chung is a senior Asia Times Online reporter
in Hong Kong.Chris Stewart is the Asia Times Online
Business Editor.
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