City with world's most expensive housing asks: what to do with 40,000 empty quarantine units?

This city has a housing crisis, despite its gleaming skyscrapers and multimillion-dollar homes.

City with world's most expensive housing asks: what to do with 40,000 empty quarantine units?

CNN Hong Kong

This city's housing crisis is one of the world's most intractable, lying in parallel to the gleaming skyscrapers and multimillion-dollar homes that have made it the world's most expensive property market.

Welcome to Hong Kong, where the average home sells for close to a million dollars and even a parking space can go for close to a million but where more than 200,000 people are on a waiting list for subsidized public housing, with waits of at least half a decade.

In Hong Kong, one in five people live below the poverty line defined as 50% of the median monthly household income before welfare. This is in contrast to the billionaire's row of The Peak, where ultra-exclusive properties routinely change hands for hundreds of millions of dollars. For many people in Hong Kong, their home is a cramped subdivided unit or even a cage in a dilapidated tenement block.

The government of the city believes that the cause of the problem is a lack of supply that cannot meet the demand of more than 7 million residents who live in some of the most densely populated areas of the world.

John Lee, the city's chief executive, insisted in his maiden policy address in October that housing 'tops the agenda.' He pledged to build 30,000 units in the next five years, following an order by the central government in Beijing to prioritize the issue.

But the local government's reliance on land premiums, sales and taxes, which account for roughly 20% of its annual revenues, has been criticized for a long time. Critics say that this income stream provides an incentive for the government to keep the supply tight, limiting what can be done to solve the problem.

CNN inquired with the Hong Kong government as to whether or not its revenue from land sales and premiums affects its housing policy, but has not yet received a reply.

Now, the recent unraveling of the city's harsh anti-Covid measures has thrown a curveball into the mix that, according to those same critics, offers a litmus test as to the government's determination to solve the problem.

Now that the pandemic is over, many are calling on the authorities to repurpose the vast Covid quarantine camps that were built to isolate hundreds of thousands of people. These camps are currently empty and unused, so repurposing them would be a great way to make use of them.

"What to do with them?" This is the question that Paul Zimmerman, a councilor in Hong Kong's southern district and co-founder of the urban-planning advocacy group Designing Hong Kong, is asking.

for the future

The Covid pandemic has left the world feeling like it has a hangover. We are all struggling to get back to normal, and many are wondering what the future holds. For businesses, the pandemic has been a litmus test. Those that have been able to adapt and change their operations have been able to weather the storm, while those that have not have struggled. The pandemic has also shown us which industries are essential, and which are not. Going forward, we need to learn from this and make sure that we are prepared for whatever comes our way.

At first, the answer to that question may seem less straightforward.

The camps were one of Hong Kong's more controversial anti-Covid measures, alongside the world's longest mask mandate and compulsory hotel isolation periods of up to three weeks. They were opposed at the time of their construction not only among those who decried what they saw as draconian quarantine requirements.

Government critics said that the construction of the camps was too speedy and expensive, and that it showed that the Hong Kong housing problem could be solved if the government wanted to.

Although the Hong Kong authorities have not revealed how much the network of quarantine facilities cost to the public, the city's financial secretary reported that the total spending bill on the pandemic in the past three years has been $76 billion (HK$600 billion). CNN has contacted the Chief Executive's office, Security Bureau, Health Bureau and Development Bureau in order to obtain information about the costs of building and running these quarantine camps.

Public housing plans are usually subject to years of red tape, but in the case of the quarantine camps, the government managed to suddenly 'find' around 80 hectares of land and build 40,000 prefabricated metal units in a matter of months.

"Why can't the government take a similarly speedy approach and bypass red tape to solve what it has itself acknowledged is an urgent housing crisis?" asks Brian Wong of the local think tank Liber Research Community.

The government's alleged reliance on land revenue is at risk of turning housing into 'a structural problem' that cannot be 'meaningfully solved,' according to Wong and others.

"Even if the government wants to make land affordable, they won't do that because there's too much at stake," said Wong, who is critical of what he sees as official indecision and inaction that he says comes at the expense of the city's poorest people.

He sees the vacant camps as a litmus test of the government's determination to act and has called for the units to be repurposed into social housing, arguing that it would be 'very embarrassed if those containers are left vacant or wasted.'

CNN has inquired of the Hong Kong government as to its plans for the former quarantine camps. It stated that it would announce its plans 'after a decision is made.'

The item is small, but it is still desirable.

Only three out of the eight purpose-built quarantine and isolation camps have actually been used; the remaining five were put on stand-by as infection numbers dipped.

Perhaps the most infamous of the camps is Penny's Bay, which housed more than 270,000 people in nearly 10,000 units during its 958 days of operation. A second camp is located next to the Kai Tak Cruise Terminal and a third near a shipping container port. The rest are dotted along the city's northern outskirts near the border with mainland China.

Each unit measures around 200 square feet, which is roughly the size of a car parking space. Each unit contains a simple toilet, shower, and bed. Only some units have kitchens.

Many argue that even though the units are spartan, they could still offer an attractive temporary solution for those who cannot afford the city's high rents. According to data compiled by property agency Centaline, in Hong Kong 'nano-flats' measuring 215 square feet have recently sold for as much as $445,000 equivalent to more than $2,000 per square foot.

Francis Law, who was sent to Penny's Bay in late 2022, said that while simple, the facilities were adequate to meet a person's basic needs and would offer an attractive temporary option to those on public housing lists.

He told CNN that he thinks the government would attract a lot of applicants for the units if they rent them out for $254 to $382 per month and arrange a bus route to the nearest train station, even if it's far flung from the main central business district.

Some argue that the camps could be moved to more permanent locations if the government were so inclined, as they are modular and relatively easily dismantled.

A temporary isolation facility will be near the Kai Tak Cruise Terminal in Hong Kong on April 6, 2022.

"We obviously have land in Hong Kong, but a lot of it is rural and not readily available for residential or commercial development," said Ryan Ip, vice-president and co-head of research at the Our Hong Kong Foundation think tank.

Whether the government actually expedites its procedures is the key.

with a small budget

You don't need a lot of money to be creative. Just use your imagination and work with what you have. You can turn an old piece of furniture into something new with a little paint and some elbow grease. Be resourceful and look for ways to save money without sacrificing your creativity.

You don't need a lot of money to be creative; just use your imagination and work with what you have. You can turn an old piece of furniture into something new with a little paint and some elbow grease. Be resourceful and look for ways to save money without sacrificing your creativity.

Some people have more creative suggestions, taking inspiration from how some of the units were used during lulls in the pandemic.

At one point, Penny's Bay held a university entrance exam for secondary school students who were close contacts of infected cases; at another time, the camp hosted a small election polling station.

Marco Siu, an architect based in Hong Kong, is part of a group that argues the blocks at Penny's Bay should be turned into a temporary health and wellness center. This, they say, would require only a minimal redesign and would give authorities the option to reopen it should another outbreak occur.

"The land next to Disneyland could be used to expand the theme park or be repurposed into a new town," said Zimmerman of Designing Hong Kong.

So far, the government has been tight-lipped on its intentions and it is unclear if they will heed any of these suggestions.

"A spokesperson told CNN that the government will conduct a detailed analysis and study with relevant bureaux and departments before making any decisions or announcements about future plans and arrangements."

However, a Development Bureau spokesperson confirmed that the units at Penny's Bay and Kai Tak were designed to last for 50 years and be dismantled, transported, and reused in other locations.

Currently, those who were hoping for an insight into the government's thinking during the Penny's Bay closing ceremony earlier this month are probably disappointed.

As the gates to the bandstand closed, Undersecretary for Security Michael Cheuk placed a giant cut-out padlock on its bars. The band played 'Auld Lang Syne' as people said their final goodbyes.

Cheuk told the crowd that Penny's Bay quarantine camp had accomplished its mission.

A banner hung across the shuttered gates with the same words plastered on it.