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Land and Housing Policy Ideas for the Next Five Years (II)
 
Prof. Richard Wong SBS JP
2017年4月19日

Underestimating Demand Growth — Divorce and Remarriages

The most important source of growth in housing demand that has not been foreseen in Hong Kong is the rapidly escalating number of divorces and remarriages. This has meant many young adults wanting to have their own homes or planning to set up their own families cannot find affordable homes, and have grown increasingly frustrated.

Hong Kong today has the fifth highest divorce rate in the world. Divorces and remarriages here accelerated after China’s opening that eased social interaction and led to an explosion in the pace and scale of cross border marriages. One can literally read the pressure on housing by looking at the rising divorce and remarriage rates (see Figure 1).

During the period 1976-1995, the cumulative number of total marriages (both first marriages and remarriages) was 803,072, of divorces 84,788 and of remarriages 65,794. In the subsequent period 1996-2015, the corresponding figures were 878,552, 323,298, and 256,066. The rapid growth in divorces and remarriages was not and probably could not have been accurately forecasted. This is evident in housing figures.

The cumulative gross number of new domestic housing units built was 1,267,335 over the period 1976-1995. But in the period 1996-2015 the cumulative number was only 857,378. Housing production between the two periods dropped by one-third. The observed ratio of accommodation quarters to the number of households was 0.91 in 1976, 0.98 in 1986, 1.08 in 1996, 1.11 in 2006, and 1.08 in 2016. This ratio improved steadily from 1976 to 2001 but worsened afterwards.

The significance of divorces and remarriages for public housing policy is that these are mostly concentrated in the bottom half of the income distribution. So not only are the prosperous ‘haves’ demanding more housing, but so are those without means – the ‘have-nots’. The growing waiting list for public rental housing has been precipitated by rising divorces and remarriages among those without means, many of whom have not been able to afford private housing units as property prices continue to rise.

Today many young single persons do not want to live with their parents, including those planning to form their own homes. But they find themselves crowded out of the private market for lack of means.

Public rental housing allocation policy does not distinguish between first-time marriages and remarriages. Public housing tenants can reapply for admission to the program upon divorce and remarriage. So there is an implicit incentive to divorce and remarry for those without means. Unless this incentive is removed, then building more public rental housing units would only fuel more demand by subsidizing divorce and remarriage. Public housing policy has to be reviewed if it ever hopes to succeed in meeting the increasing housing demand among those without means.

The situation with the long waiting list worsened after Donald Tsang gave preference to housing the elderly poor during his time as Chief Executive. In 2011, some 50% of households above the age of 65 were living in public rental housing. Today the elderly have been by and large well taken care of in terms of housing access, it is the young that are frustrated.

Having said that, it would be a serious policy mistake to build more public rental housing units to meet the housing shortage. Divorces and remarriages at the expense of public resources should not be encouraged by our public housing policy. It is therefore imperative that public housing policy should be focused primarily if not exclusively on homeownership, and the benefit could then only be provided once in a lifetime. This would provide a serious disincentive among beneficiaries to breaking up the family.

A public homeownership policy would encourage family stability with positive effects on children, incentives to work and save, social cohesion, and narrowing of the economic and political divides due to the lack of propertied wealth among the ‘have-nots’.

Housing policy should not only seek to meet housing shortages by building more units. It must also address the divorce and remarriage that are an important source of rising housing demand. Supplying public homeownership rather than rental units is central to alleviating the housing shortage in a way that would not exacerbate the problem.

To reduce the housing demand driven by divorce and remarriage, it would be more impactful to privatize the stock of public rental units by selling units to existing tenants, especially those units built since 1997 and the stock of units still on the Tenant Purchase Scheme list. In one fell swoop, this would create a serious disincentive against divorce among households in the public rental-housing sector. And it would take a big step towards reducing the economic divide.

Fiscal Budgets and Economic Social Development

Hong Kong is a rapidly ageing society and in the absence of an aggressive immigration policy, she will increasingly rely on a non-growing labor force to support a rising share of the economically inactive elderly population for decades to come. Public expenditure on health and social welfare will therefore have to be steadily increased as a share of GDP.

The revenue base for funding these rising expenditures needs to be examined despite the huge surpluses we have reaped in the past decade. The main reason for our large surpluses has been the appreciation of land and property values. These have not only impacted capital revenues positively, but also recurrent revenues. How long will property values continue to rise? Even if the values remain stable, the revenues derived from land and property may stop growing.

On the other hand, tax revenues derived from individual salaries and small-and-medium businesses are unlikely to expand as a share of tax revenues and may well shrink in the future. If wages don’t rise by much, how can tax revenues grow substantially? This scenario can be seen from (1) the declining growth of real wage rates over time, and (2) the slower growth rate at the bottom half of the wage distribution compared to the top half (see Figure 2).

During 1976-1996, the real wage rates of men rose on average between 4.5-5.5%, but only by 1-2% during 1996-2016. Part of the lower growth rates can be attributed to the Asian financial crisis, but this cannot account for the entire drop. Another important reason has been the declining growth of human capital in the workforce amidst a global move towards the knowledge economy.

Another aspect that deserves attention is that the growth rate of wages is positively correlated with the level of the wage rate. This means over time the wage distribution is bulging at the lower end, i.e., there are now a higher proportion of individuals with below average wage rates.  If this trend continues, and it is likely to do so, then the tax base will narrow further given our present tax regime.

Clearly, more investment in education will be necessary to sustain future growth, but this will take time to make an impact, perhaps a decade or two at the very least. It means that total government expenditures will rise even further as a share of GDP, but revenues from salaries and profits are unlikely to do so. Balancing the government budget will increasingly rely on land and property-related revenues for some significant period of time into the future.

Financing our economic and social future largely by land and property is appropriate given that our land values are unusually precious. This is because its values are securely protected by common law and supported by the high economic growth rates in the Asian region.

Consider the pattern of government spending in the past 20 years (see Figure 3). The fastest growth element has been social welfare expenditure. Health care expenditure has been rising but only modestly so far. Education expenditures have declined modestly as the number of young persons at school age has decreased. Public housing expenditures also declined significantly because less was spent on the public housing sector during Donald Tsang’s period. The significant point to note is that the overall public expenditure remained a constant share of GDP due largely to the decline in housing expenditure. 

But this pattern will rapidly change in the decades ahead. Health care spending will rise rapidly, driven by an ageing population, and it is expected to at least double as a percentage of GDP by 2041. Social welfare expenditures will also double as percentage of GDP. Education spending will also rise as more young persons will enter schooling age and more investments will be made to enhance productivity to promote economic growth. The scale of the total expenditure growth in the coming decades will be a challenge for any Financial Secretary wanting to balance the recurrent fiscal budget, unless land and property values continue to stay high as they have done so in the past.

Without rising property values, fiscal revenues (both capital and recurrent ones) cannot continue to rise as a percentage of GDP as they have done in the past three decades. Public expenditures are going to escalate because for over two decades we have not been able to reform our financing arrangements for funding them.

It is unlikely that social welfare, education and health care financing can be reformed in the near future to pass on some of the expenditure growth to clients. So almost all the growth will have to come from the public purse. The existing model of financing public rental housing through the sale of Homeownership Scheme (HOS) units is not going to work in the future because the construction costs of public rental units have increased and the sales price of HOS units cannot be increased sufficiently because of limited affordability and the slow growth of wages.

Under these circumstances, reforming how we finance public housing offers the only real hope of balancing fiscal budgets in the future and providing the appropriate levels of education, health care and social welfare investments for realizing a better economic and social future. The huge fiscal surpluses realized in the past years were merely the windfall gains of an unforeseen property market boom and nobody should think that they can last forever.

At present, government provides land for the provisioning of public rental units and charges a low rent that could not even cover the annual maintenance cost of these units. In effect, the public is financing both the construction cost and the land value of these units. Tenants may be enjoying the value of the buildings, but both the tenant and the government fail to capture the land value. This value is lost forever because the land has no alternative use. The property cannot be rented out or transferred on the market. By contrast, Singapore allows its social housing occupants to do both.

Meanwhile, housing demand among the ‘have-nots’ has exploded in Hong Kong after three decades of global economic integration and cross-border marriages. This will increase the burden on the public purse and reverse the recent downward trend of the share of housing in public expenditures.

In today’s market, even the middle class cannot afford to become homeowners. They too have become a responsibility of the public purse, albeit inadvertently. Indeed, the income eligibility criterion for qualifying for an HOS unit is $50,500 per month; and believe it or not, according to the government’s census, 80 per cent of households are below this income level.

If we reform our public housing policy into an affordable ownership program for the ‘have-nots’, then we will create an opportunity for both tenants and the government to recover the lost land values. This is the only approach that can simultaneously provide a solution for our future budget challenge and allow the present ‘have-nots’ to become homeowners without the need to commit any new resources. It would just make the lost land values reappear.

And what a lot of value they represent. The entire stock of existing public rental housing units (excluding Tenant Purchase Scheme units) evaluated in 2016.Q3 prices was HK$2.95 trillion dollars, and most of this value is attributable to land. Today it is certainly even higher after the recent surge in property prices.

Next week I will look at how we should reform our public housing policy to reunite a divided society, renew our faith in our fiscal foundations, and hopefully amend our polarized politics so that our economic future will not be held hostage again and again.


Chinese Version :

未來五年土地與房屋政策之我見(中)
王于漸教授 SBS JP

低估離婚與再婚引發之需求增長

離婚與再婚急劇增加,成為香港房屋需求增長的主因,實屬始料不及;大批有意置業或計劃組織家庭的青年人無力購置居所,愈來愈心灰意冷。香港離婚率現已高踞全球第五位,自從中國內地對外開放,兩地居民交往日趨頻繁,跨境婚姻急劇增加,香港的離婚與再婚數字大幅飆升,。只要看看離婚與再婚趨升的統計數字(【1】),便能理解對房屋供應造成的重大壓力。

1976至1995年期間,香港累計婚姻(包括初婚及再婚)總計為803072宗、離婚總數為84788宗、再婚總數為65794宗;隨後自1996至2015年的20年內,累計婚姻為數878552宗、離婚高達323298宗、再婚則增至256066宗。離婚與再婚數字飆升現象既未能預見,更遑論準確預測。這從房屋統計資料可見。

1976至1995年期間,累計新落成住宅樓宇單位總數達1267335個;隨後自1996至2015年的20年內,累計新單位僅得857378個。兩段時期比較,建屋數量減少三份之一,至於單位數目與住戶數目的比例,1976年為0.91,1986年為0.98,1996年為1.08,2006年為1.11;2016年則為1.08,這一比例在1976至2001年期間逐步改善,但期後卻漸走下坡。

離婚與再婚對公營房屋政策影響極大,皆因這些家庭多集中於收入組別中的下半層。換言之,不但「有產階級」的房屋需求有所增加,缺乏經濟條件的「無產一族」也不例外;離婚與再婚數字上升,且其中多為未能負擔不斷漲價的私人樓宇的家庭輪候公屋時間頓然大大延長。

時下不少年輕人不願與父母同住,或有意自組家庭,卻苦於缺乏經濟條件,無法沾手私樓市場。

戶主的婚姻狀況無論屬初婚或再婚,在現行公屋分配政策下並無區別;公屋租戶離婚或再婚,均可重新申請公屋單位,因而暗藏鼓勵缺乏經濟條件租戶離婚及再婚的誘因。除非當局免除此一誘因,否則增建公屋只會助長補貼離婚及再婚,進一步增加對公屋的需求。要真正滿足缺乏經濟條件者與日俱增的房屋需求,必須先行檢討公營房屋政策。

曾蔭權當政時期,為優先照顧貧窮長者,已令公屋輪候時間增長。2011年,本地65歲以上住戶已有近半數正租住公屋;現時在公屋編配方面,長者大致上可算獲得充份照顧,最感不滿的實為年青一眾。

話雖如此,若以增建租住公屋解決房屋短缺問題,則是大錯特錯的政策,決不應令公屋政策變成助長以離婚、再婚方式耗費公帑,房屋政策應以協助住戶置業為主要(縱非唯一)目標,而合資格申請公屋者應只可一生享有一次福利,令已享福利者在家庭破碎前三思而行。

資助自置居所的房屋政策有利於穩定家庭關係、培育子女、促進工作意欲、增強社會凝聚力,並可縮窄不同階層因物業財富差距而產生的政經鴻溝。

政府房屋政策不應只著眼於增建單位,以解決住屋短缺,而必須正視房屋需求日增的一大根源:離婚與再婚。要解決房屋短缺,又避免同時令問題惡化,必需為市民大眾提供自置居所的機會,而非僅僅提供租住單位。

要減少由離婚與再婚帶動的房屋需求,需將現有出租公屋,特別是1997年後建成,與及租者置其屋(租置)計劃內仍未售出的單位,出售給現有租戶,將單位私有化,此舉除可大大消減公屋住戶的離婚意欲,同時亦於減輕經濟分化問題上跨進一大步。

財政預算與社經發展

香港人口正急促老化,一日未能大事改革入境政策,則只能繼續依賴未有增長的勞動人口,去負擔未來數十年不斷增加的長者人口。醫療、社會福利的公共開支,佔本地GDP比例亦只會持續向上。

特區政府近10年來財政盈餘豐厚,但要應付公共開支日增,必須重新檢視現有收入基礎。財政盈餘如此可觀,全賴土地和物業價值大升,對資本收益與經常性收入均大有裨益。然而樓價升勢還能維持多久?即使仍能維持穩定,來自土地與物業的收入漲幅亦有盡時。

另一方面,來自個人薪俸及中小企業的稅收,在整體稅收中的比例不但難望提高,更有收縮之虞。工資增幅有限,相關稅收又怎會大幅增多?從【2】顯示的兩種現象可見一班:一)實質工資增長放緩;二)工資分佈下層的增長率較頂部緩慢。

1976至1996年的20年內,男性實質工資增幅每年平均為4.5 至5.5%,而1996至2016年間,增幅則只有1至2%,銳減原因固然與亞洲金融風暴有關,另一要素乃由於在全球邁向知識型經濟的過程中,工作人口中人力資本增長下滑。

同樣值得關注的是,工資增幅與工資水平息息相關,假以時日,形成工資分佈集中於底端的現象,亦即工資低於平均水平者佔較高比例。此一趨勢若在現行稅制下持續(可能性甚高),則本地稅基只會更形狹窄。

投資教育顯然有助於未來持續增長,不過須待一二十年,才能取得實效。政府總開支佔GDP比例勢將有增無已,然而薪俸稅和利得稅收入卻難望增加。要平衡政府財政預算,今後長時期內只會日益依靠土地與物業相關收益。

未來的社經發展有很大程度仍仗賴土地與物業收益,屬合情合理,在普通法制度與亞洲經濟高增長的大好形勢雙重保障下,本港土地的確具相當高的價值。

觀乎近20年來的特區政府開支模式(【3】),社會福利增長速度一直為各類開支之冠,醫療開支亦見增加,但增幅尚算溫和;隨着學齡階段人口減少,教育開支近年略為下降;公共房屋開支則顯著減少,皆因曾蔭權任內政府縮減投放在公屋的資源。值得關注的重點,是整體公共開支佔GDP比重維持穩定,主要因為房屋開支減少。

不過,今後數十年間,這種模式會急劇轉變。醫療開支在人口老化帶動下,將會急促上升,預計至2041年,佔GDP 之百份比將倍增,屆時社會福利開支亦將如是。進入學齡階段的人口提升,教育開支亦隨之增加;為提高生產力以促進經濟增長,所作投資亦會增加。未來數十年整體開支的增長規模非同小可,若非一如既往,有雄厚的土地與物業價值作為後盾,財政司司長要平衡財政預算談何容易。

要是欠缺物業價值升幅支持,則財政收益(包括資本收益與經常性收入)佔GDP百份比難望有如過去30年般維持向上。事實上,由於近廿多年來政府均未能妥善改革公共開支的融資安排,公共開支的負擔必會劇增。

預計短期之內,社會福利、教育、醫療融資方式不會轉變成為以用者自負方式承擔部份開支增長,故大部份增幅仍將靠公帑負擔。現行以居者有其屋(居屋)計劃資助出租公屋的融資模式,日後再難發揮作用,因出租公屋建築成本增加,而居屋則礙於工資升勢緩慢、購買力弱,售價難以提升。

是以唯有落實改革公共房屋的融資方式,日後才有望平衡財政預算,提供適度的教育、醫療、社會福利投資,以期帶來更美好的社經發展。過去多年來財政盈餘豐厚,無非是拜物業市道異常暢旺所賜,實不能寄望永遠如是!

政府一向提供土地,興建租住公屋,租金之低甚至不足以支付每年維修費用。公屋的建造成本以至地價,全由市民大眾資助,住戶縱然得享單位價值,但事實上住戶與政府均未能從地價得益。土地既不能作其他用途,土地價值也就永久流失。有關單位不得在市場放租或轉讓,反觀新加坡的組屋(當地公屋)住戶,則可自由將單位租售。

經過近30年的全球經濟融合與跨境婚姻趨勢,香港無產一族的住屋需求亦劇增,近年房屋佔公共開支比重下調的現象勢將逆轉。樓價高昂,即使中產階級亦難以負擔,無形中被迫成為公帑負擔的一部份。現時申請購買居屋的住戶入息上限為每月50500元,據政府統計資料顯示,全港處於此入息水平以下的合資格申請居屋住戶,比例竟然高達八成。

若能改革現行公營房屋政策,為無產一族提供可以負擔的置業計劃,則無論公屋住戶抑或政府,均能盡享有關土地的價值,而毋須注入額外資源,亦足以平衡未來財政預算,更是為無產一族提供置業機會的唯一可行方案,有關土地價值自然失而復得。

此舉涉及的資源確實非同小可。於2016年第三季度,公屋租住單位(不包括租置計劃)總值高達29500億元,其中以土地價值為主;經過近期樓價升勢,是項總值當更水漲船高。

下星期我將探討如何透過改革公營房屋政策,重新凝聚社會,重拾對本港財政基石的信念,並期以修補政治分歧,免令香港經濟發展停滯不前。

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