Financial Innovations for Housing the Elderly in Hong Kong

When we look ahead into our future public housing policies, including the one on housing for the elderly, should we still adhere to our welfare orientation? Is there any lesson that we might learn from the West European countries as they moved from "welfare statism" to "the marketized state"? Looking at the recent controversies over public housing, it appears that the government has already forsaken this welfare mentality and is already on its way to "marketization." If that is the case, the government must then spell it out and tell the people what it wants. Anyway, we must first make clear whether or not public housing is still regarded as a form of welfare before we can ever contemplate of discussing the innovative methods for financing housing for the elderly.

What the government is expected to play in public housing is a role largely welfare in nature, i.e. to build as many units as possible and then rent or sell them, at subsidized rates, to people who have housing difficulties. The way of looking at public housing as a form of welfare is in stark contradiction with the philosophy repeatedly emphasized by the government that Hong Kong is not a "welfare state."

This is also probably the most obvious paradox that we find in Hong Kong in that, on the one hand, the government has warned the people the danger for Hong Kong to become a "welfare state," and, on the other, it is proud of being the landlord of more than one-third of her population. Public housing in Hong Kong, right from its start in the early 1950s, has been characterized by a strong welfare orientation.

Though the government has rejected this description, arguing that public housing in Hong Kong actually serves more purposes than just a form of welfare, people have firmly believed that government-built units are only meant for those who are unable to satisfy their housing needs in the private market. In other words, no matter rental or on sale, public housing must have an element of subsidy, set at a price below that of the market.

Exiting Methods of Financing Housing for Elderly People and their Limitations

The need for subsidized housing for the elderly began to surface with the publication of the White Paper on Social Welfare in 1979 when hostels for elderly people were perceived to be an item for rapid expansion. The issue further attracted the attention of the public in the mid-1980s when elderly people were found to form the majority of those living in "cages" in private tenement blocks. Notwithstanding the fact that housing for the elderly has over the last two decades been seen as a major social concern and has taken up a substantial proportion of our public housing resources, the need seems to be endless.

We can give a number of reasons to account for this perennial shortage of housing for the elderly; but I would argue below, as long as we perceive the provision as a form of welfare, solely provided by the government, then the shortage will never end. I based my view on the following arguments: First, when public housing for the elderly is perceived as a form of welfare, its supply will be restricted by the affordability of the government and it has also to compete with other claims for public resources. That the two Working Groups on Housing for the Elderly that I served as members had both failed to achieve their recommended targets was attributed to mainly an inadequate supply of public housing units, as the Housing Authority had also other priorities to attend to.

In the study of social policy, we call this phenomenon a result of a provider-dominated policy. In the case of housing for the elderly, we do know it is the government, and not the elderly people who are in need, that would have a dominant say in the allocation of resources. Secondly, when housing for the elderly is regarded as a government responsibility, planning for the required units will inevitably depend on the advice of some professional groups, like housing managers, social workers and urban planners.

To mention again the two Working Groups on Housing for the Elderly, only one of the members who served on them was a public housing tenant. I sometimes wonder if we do know the needs of the elderly who are going to be housed. I am not suggesting that we should have the users, or the potential ones, occupying all the seats of the working groups, but I recalled T.H. Marshall, one of the most renown teachers in social policy, to have said: "Civil rights… are a form of power," but social rights, on the other hand, "are not designed for the exercise of power at all." (The Right to Welfare and other Essays, London: Heinemann, 1981: 141-2).

These days we have been talking about empowering the users of various social services. In viewing housing for the elderly as a form of welfare and hence a social right for them to enjoy, I wonder if we are empowering the elderly or making them more dependent. The cruel reality is that elderly people who do not have the means to satisfy their housing needs in the market could often do nothing but to wait for public allocation. In this way, I would say we have not only made the elderly powerless but also deprived them of the opportunity to make plans for themselves. Is there a chance for the adoption of a different strategy so that elderly people could define their own housing needs and are empowered to find ways to satisfy them? Only in this way could we say that the elderly are empowered and are taking the initiative to solve their own problems.

Lastly, notwithstanding the fact that the need for subsidized housing is still very great among the elderly, I wonder if our strategy should continue to be one of concentrating our resources on the most needy. Our past experience tells us that as long as we concentrate our efforts on helping the needy, and not considering the interests of the elderly as a whole, we would probably create more demands than any plan could ever satisfy. Furthermore, this selective approach tends to neglect the other aspects of the life of the elderly, as though they require only housing.

A Holistic and Empowering Approach to Housing the Elderly Instead of going from one extreme to another, I propose the adoption of what I would describe as a holistic and empowering approach in housing the elderly that would include the following elements: First, the approach must accept that the life of an elderly person consists of many different needs. To have a decent place to live in is of course very important, but it is not all. I do not want to go too far to the satisfaction of other needs but housing is obviously very closely related to the existence of a secure and comfortable environment, a social surrounding that a person can establish relationships, and a community where people can interact with one another in a meaningful and fruitful way.

Secondly, to empower the elderly, the new approach must aim at helping them to solve their own housing needs, either through utilizing their own resources or that of the community. Only in this way could we say the elderly are empowered. Furthermore, elderly people must have the opportunity to exercise their choice, not only in the type of housing they want, but also the location, and whether to live with other people or not.

Thirdly, the new approach must start work as early as possible and not wait till people have already retired or grown old. In fact, when elderly people are unable to solve their own housing needs, they will probably never have the ability to do so, except to accept help from the government. Hence, any policy to tackle the housing problem of the elderly must begin when people still have at least 20 years of working life and are earning their incomes. The recent proposal of the government to set up a Medical Protection Account for elderly people also suggested that people should start contributing from the age of 40. Likewise, people must be empowered to solve their own housing problems well before they grow old.

Methods of Financing Housing for Elderly People

Once we accept the above principles, we can then proceed to talk about the innovative methods for financing housing for the elderly. Before we can do this, the government must change its attitude in the following two areas on housing the elderly: First, the government must give up the idea that a policy for housing the elderly should only aim at those who are unable to satisfy their needs in the market.

A policy that embraces all elderly people is probably more effective than one targeting at the needy. I am not suggesting that the government should provide housing for all elderly people, as resources are simply not enough and that this kind of socialist philosophy is also incongruent with the capitalist system of Hong Kong. What I am suggesting is that the government must consider the housing needs of all elderly people as a whole. Second, the government must be prepared to see housing for elderly people as part and parcel of an overall housing policy for the entire population. I have mentioned that because of the overall shortage of public housing supply that the two Working Groups on Housing for the Elderly had both failed to achieve their desired targets.

In other words, if we were unable to achieve the objectives of our general housing policy, there would also not be a chance to attain what we have planned for the elderly. Methods to Finance Housing for the Elderly Now we can proceed to examine the future strategies for financing housing for the elderly. I make the following proposals, largely in accordance with the varying housing conditions of the elderly:

(1) For elderly people who are already tenants in public housing estates, either living alone or with other elderly persons - Some may think that since they are already enjoying public housing benefits, they should be excluded. However, though elderly tenants belonging to this group are enjoying subsidized housing, they still have to pay rent and there might be a possibility for them failing to do so. In fact, quite a substantial number of them are CSSA recipients and are dependent on the government to pay their rent. I suggest that this group of elderly tenants, who are living alone, should only be charged a nominal rent, say HK$50 a month, as long as they are reside in public housing. Or their rents will forever be waived when they are prepared to pay a lump sum, once and for all, and say at HK$5,000. This will immediately solve the housing worry of about 200,000 elderly people, with half of them being CSSA recipients. Of course the result will be a reduction in the rents collected by the Housing Department but considering the future trend that more and more of this group will probably have to turn to the government for financial aid, and the housing security that this will bring to them, it is worth considering.

(2) For elderly people who are tenants in private tenement blocks, either living alone or with other elderly persons - This group should be treated the same as though they were living in public housing. The most urgent task is to provide this group with public housing units as soon as possible. However, we have to recognize that some elderly people in this group will never, for one reason or another, want to live in public housing. Hence, the pilot rental subsidy scheme for elderly people living in private tenement blocks should continue, even when we have sufficient public housing units, in order to give the elderly a choice.

(3) For elderly people who are owners of their own housing units, public or private - This is a group that should be regarded as having solved their own housing problems. However, as I shall mention below, their need for care and attention will be the same as those who are not owners of their units.

(4) For elderly people who are living with their families and are not owners of their own housing units - This group probably represents the largest group of elderly people as about two-thirds of the elderly in Hong Kong are still residing with their families. We should continue to encourage children, married or unmarried, to co-reside with their parents, though the trend will definitely go the other way. We should also be aware if we are prepared to waive the rents of public housing elderly tenants who are living alone, this might produce the effect of encouraging more elderly people to separate from their families. We probably have to provide more incentives, like bigger units or two units side by side, in order to encourage children to live with their elderly parents.

(5) For people approaching old age - We should include in this group all those who are aged 40 and above as efforts to solve one's housing problem will take years to materialize. The present strategy of the government, both in offering public housing tenants with the choice to purchase their own units and in helping the public to purchase their own properties, will produce the long-term effect of solving the housing needs of the elderly before they become old.

Together with these measures, the government must keep two other considerations in mind:

(1) Elderly people must have the opportunity to exercise their choice when they are making efforts to satisfy their own housing needs. The "Housing for Senior Citizens' Scheme" that is going to be announced soon may seem too expensive and some critics have already voiced their oppositions. But I believe that elderly people are also very varied in their housing demands and we must not think that one type of housing could suit all their needs. In fact, I am quite confident that some elderly people would welcome the "Housing for Senior Citizens' Scheme."

(2) Our care for elderly people is a holistic one, and housing is only one of the many needs of their life. There need to be a comprehensive package of policies, which ensures that all elderly people can truly "age in place," being supported by a wide spectrum of thoroughly integrated social and health services.

I hope that our aim is not only to satisfy the housing needs of the elderly but also to improve the overall quality of life of our senior citizens. Conclusion I understand that some critics of the government would always look at any change in the financing method of housing services for the elderly as a shedding of government responsibility.

While this suspicion is not totally unfounded, my question is whether we should always rely on public revenue as the only source of finance. I have already pointed out that this welfare perspective has only made the elderly more passive and powerless. Time has certainly come for us to make greater use of the private sector. In the past when properties were so expensive that the only way to satisfy the housing needs of the elderly was to build more public housing units. We have now learned the hard lesson that the private market can also help and it depends on whether or not we know how to make use of a profit-driven service.

By Nelson W.S. Chow (The University of Hong Kong)