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6. Public Housing

Policy and Social

Justice

6.1 The Injustice of Evaporating
Resources

The current public housing policy is unjust because the society
losses the value inherent in the public sector housing unit, the physical
premises itself, and the land that it occupies. The evaporation of resources
benefits no one.

First, the taxpayer hardly ever collects the unpaid land premium
because, as stated in Chapter 1, very few households ever pay it. A
receivable that cannot be collected after many years should be written off
and not carried on the books.

What is even worse is that, 60 years after construction, many of
these units will be so rundown that they will have to be redeveloped. By
then, the unpaid land premium will most certainly reach an astronomical
figure. The only party that could redevelop these units would be the
government. The injustice is that taxpayers would be forced to foot the bill
yet again.

It should be reminded at this juncture that the original public
housing policy objective was to offer a way to establish a “housing ladder”,
with each rung of the ladder representing a stepping stone to “move up”
from PRH to HOS and eventually to private housing. At the current setting, it
is extremely difficult, if not entirely impossible to satisfy such a goal. There
is virtually no hope of leaving the public housing system once a household
enters it.

Second, the subsidy provided by taxpayers to the household is
the difference between the market value of the unit and the price the
household pays for its use as shelter. Over time, the amount of the subsidy
will increase as land values increase. The odd situation is that the cost of
the subsidy paid by the taxpayer is larger than the benefits perceived by
the household because a market for such units does not exist. It is unjust
that the taxpayer pays for the asset value of the unit, but the household
receives only the shelter value of the unit.

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