The Chinese Alternative to Home Ownership

[M II A II R II K]

Selling Shells


April 21, 2011

By A. P. Hurd



Read More: http://www.metropolismag.com/pov/201...selling-shells

One reason the U.S. government has been pushing for home ownership is because it’s said to reduce turnover and build strong communities. But, as I learned on a recent trip to Hong Kong, there may be other ways to get there. Some background might be helpful here: In many Asian countries, commercial building landlords don’t finance tenant improvement allowances (the cost of paying for an office or retail tenant to customize their space), the way most do here. Leases are relatively short (often three years, vs our customary five to 10) but tenants tend to stay if the rents are reasonable, after all, they have invested in (and effectively own) an immoveable piece of the asset.

In Hong Kong, as I learned, subsidized housing works in much the same way. Thirty percent of the population lives in government subsidized housing–”Housing Estates”– as they are called. These units are rented out as bare shells. The apartments are essentially concrete boxes with only a skim coat of plaster (and plumbing conduit running on the outside of the building). As a result, the units are less prone to damage and can be more easily cleaned up when tenants change. When I think of the degradation of finishes in many affordable housing projects here in the U.S., and the cost created by trying to make them indestructible, the “shell only” model seems like a brilliant solution.

But what really reduces tenant changeover costs is the infrequency of tenant changeovers. Once a family is assigned to a unit, they can’t switch for another one unless their circumstances change dramatically. In compact, rail-connected Hong Kong, a change of job, for instance, doesn’t seem to call for a move. Another reason people stay put is that they, like the corporate tenants in commercial space, own their finishes. Their investment in flooring, cabinetry, appliances, light fixtures, and air-conditioning units tends to connect them to their vertical community better than our subsidized housing projects do. Many stay in the unit they were first assigned for the rest of their lives. In contrast, even in our market-rate apartments, it’s typical for 50 to 75% of all tenants to move on within one year.

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Image: Hong Kong’s Ching Ho Tower, photo: Mark Huppert.






The interiors of a unit in the Ching Ho tower. photo: Katlin Jackson.

[llamaorama]

It sounds like something that works under the circumstances that it emerged in. Makes sense in a place like Hong Kong where as the article states, a large proportion of the population which includes the middle class is being given subsidized housing by the government. If you had zero choice and also had a flat rent or rent control, then it would be nice to be able to fix up your own place.

But sounds like it would be prone to a lot of bullshit for a private apartment development and also just American culture would tend to abuse such things. So spend a lot of money out of pocket to fix up an apartment unit, and then at the end of my short lease my landlord jacks up my rent-largely because tenants like me have made the building such a nice place to live? Fuck that. Its the old gentrification problem-renters have little incentive to care about their housing or community because if they did, and the surroundings got nicer and therefore more valuable, the landlord would just be enriched and you'd be displaced from what you helped to build.

In the US, or anywhere that isn't a tiny land mass and must build more costly and smaller high rise units to fit everyone, everyone but the most destitute(meaning they'd be homeless otherwise) should be expected to find their own housing. If you were of the social class capable of paying to renovate a public housing unit, maybe you could afford to find your own private housing in a cheap, low density US city. If you couldn't then you probably need something other than a concrete box where you'll toss a mattress on the floor.

[M II A II R II K]

It would be more likely in high density areas with good transit as stated here to make it less likely that someone would feel the need to have to move for a different job and stuff.

[richb]

Actually the unfinished apartments are common in other places as well as HK. It includes some apartment markets in Europe as well. Some places don't provide kitchen cabinets and appliances, just a room with bare walls. You bring your own.

When I was in college, I had several European roommates my senior year. As I was graduating before they were, I was leaving the apartment (LL was the school) before they were. They were concerned that there wouldn't be a kitchen when I left. They were under the impression that I owned the kitchen cabinets and appliances, and that I was taking them with me. They were quite relieved when I told them I didn't own those things and they were staying. I guess they thought they were going to have to buy all new kitchen stuff.

[Jasoncw]

lol, it's funny to think that you'd have to buy a new kitchen when you moved someplace.

I think that's kind of weird, but at least you'd be able to control how updated your kitchen is. Most apartments have their original kitchens, or maybe their original kitchens plus some cheap remodel attempts.



I don't have any real knowledge about this kind of stuff, but I don't think the US's housing situation is very good. imo all of the government home ownership programs (all of them, whether they apply to rich or poor people) should be eliminated. Without those programs there would be more renters, more options for renters, and more public attention to renting rules. Since there would be a better renting environment, and more people would have to be renters, there would less people trying to own and make investment decisions, who really aren't in the position to make good decisions.

Then the time and money saved from eliminating those programs could be diverted into establishing a cross-income (not just low income) public housing program, which could help stabilize the market. The government owned housing wouldn't be susceptible to speculation and bubbles and shady math.