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It hasn't entirely stopped rents in HK being untenably high, for many people. It has rent controls, but the system permits some very untenable outcomes which if

by ggm 2y ago

It hasn't entirely stopped rents in HK being untenably high, for many people. It has rent controls, but the system permits some very untenable outcomes which if left unchecked would re-create Kowloon Walled City. So whilst politically I agree, practically I am unsure there is no land speculation: A waterfront view remains valuable in and of itself, no matter what.

ty6853 2y ago
Kowloon Walled City ended because it was attacked by the state, rather than through market forces. Many of those people are now likely in worse shape effectively renting a cage sized bed, but now paying the governments cut on top of whatever black market shenanigans goes on in both the slum housing and kowloon.
- kiba 2y ago
  Kowloon Walled City was neither a dystopia nor a utopia. It works and was able to maintain itself, but it could have been done better if it was actually supported by the government.
  - gsf_emergency 2y ago
    That's "just" a bug-feature of common law systems >The Kowloon Walled City was exempt and remained under the control of Qing China. https://www.thecollector.com/kowloon-walled-city-lawlessness-and-claustrophobia/ https://www.thecollector.com/kowloon-walled-city-lawlessness... https://en.wikipedia.org/wiki/999-year_lease https://en.wikipedia.org/wiki/999-year_lease https://en.wikipedia.org/wiki/999-year_leases_in_Hong_Kong#Valuation https://en.wikipedia.org/wiki/999-year_leases_in_Hong_Kong#V...
jaggederest 2y ago
Right, obviously HK is a bit of a special case. Land in Manhattan would, I'm 100% certain, remain incredibly expensive. The cool thing about leases is that you can change the cost of the lease periodically, which ensures that the value of the land does not accrue purely to the person occupying it.
- FabHK 2y ago
  > obviously HK is a bit of a special case Reminds me of the old macro economist joke: There are 4 types of economies, developed economy, developing economy, Japan, and Argentina. Maybe HK should be added to that joke...
3vidence 2y ago
Forgive my ignorance but with just so many people and so much money and so little area, isn't high rents inevitable? I contrast that to places like the USA and Canada that have huge amounts of area but policies that encourage inefficient land usage.
abdullahkhalids 2y ago
There is no problem with property values or rent values being high because they are the result of demand for living in a high quality area. There isn't a problem either with these prices varying over time as the attractiveness of the area changes. The problems are wholly on the supply side, where either - there are bad laws that lead to any of the following, or - developers legally or illegally cooperate to suppress supply - landlords cooperate to push up rents or reduce quality. - investors use land or housing units as speculative assets - normal people want to use their primary residence as a way to build wealth, so politically support measure that artificially inflate their property values. Individually, this is not a problem, but when everyone does it, the system breaks. The goal is to design a system where all of the above doesn't happen. A very big task. P.S. I don't know anything about HK.
andreareina 2y ago
Or in Singapore
- ty6853 2y ago
  Singapore relies on the fact like 20 or 30% of their tax paying population is ineligible for public housing due to not being a PR nor citizen.
shipp02 2y ago
Land in HK is weird. The lease thing is true but there are massive national parks that have nothing built at all. The buildings that do exist are ~50 stories even though that's not optimal because of the typhoon situation. So constructive cost is high because government does not release enough land for development. The rents are high because someone wants it that way. It's not a land scarcity problem IMO. Also the government and the upcoming merge with China is strange in itself.
deleted 2y ago
[deleted]

by ggm 2y ago

ty6853 2y ago

Kowloon Walled City ended because it was attacked by the state, rather than through market forces. Many of those people are now likely in worse shape effectively renting a cage sized bed, but now paying the governments cut on top of whatever black market shenanigans goes on in both the slum housing and kowloon.

kiba 2y ago
Kowloon Walled City was neither a dystopia nor a utopia. It works and was able to maintain itself, but it could have been done better if it was actually supported by the government.
- gsf_emergency 2y ago
  That's "just" a bug-feature of common law systems >The Kowloon Walled City was exempt and remained under the control of Qing China. https://www.thecollector.com/kowloon-walled-city-lawlessness-and-claustrophobia/ https://www.thecollector.com/kowloon-walled-city-lawlessness... https://en.wikipedia.org/wiki/999-year_lease https://en.wikipedia.org/wiki/999-year_lease https://en.wikipedia.org/wiki/999-year_leases_in_Hong_Kong#Valuation https://en.wikipedia.org/wiki/999-year_leases_in_Hong_Kong#V...

jaggederest 2y ago

Right, obviously HK is a bit of a special case. Land in Manhattan would, I'm 100% certain, remain incredibly expensive. The cool thing about leases is that you can change the cost of the lease periodically, which ensures that the value of the land does not accrue purely to the person occupying it.

FabHK 2y ago
> obviously HK is a bit of a special case Reminds me of the old macro economist joke: There are 4 types of economies, developed economy, developing economy, Japan, and Argentina. Maybe HK should be added to that joke...

3vidence 2y ago

Forgive my ignorance but with just so many people and so much money and so little area, isn't high rents inevitable? I contrast that to places like the USA and Canada that have huge amounts of area but policies that encourage inefficient land usage.

abdullahkhalids 2y ago

There is no problem with property values or rent values being high because they are the result of demand for living in a high quality area. There isn't a problem either with these prices varying over time as the attractiveness of the area changes. The problems are wholly on the supply side, where either - there are bad laws that lead to any of the following, or - developers legally or illegally cooperate to suppress supply - landlords cooperate to push up rents or reduce quality. - investors use land or housing units as speculative assets - normal people want to use their primary residence as a way to build wealth, so politically support measure that artificially inflate their property values. Individually, this is not a problem, but when everyone does it, the system breaks. The goal is to design a system where all of the above doesn't happen. A very big task. P.S. I don't know anything about HK.

andreareina 2y ago

Or in Singapore

ty6853 2y ago
Singapore relies on the fact like 20 or 30% of their tax paying population is ineligible for public housing due to not being a PR nor citizen.

shipp02 2y ago

Land in HK is weird. The lease thing is true but there are massive national parks that have nothing built at all. The buildings that do exist are ~50 stories even though that's not optimal because of the typhoon situation. So constructive cost is high because government does not release enough land for development. The rents are high because someone wants it that way. It's not a land scarcity problem IMO. Also the government and the upcoming merge with China is strange in itself.

deleted 2y ago

[deleted]