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in the bottom two income quartiles should be extremely high, while that for
private tenants would be very low. Yet, among working-aged households,
in 1981, 51% of the public tenants are in the bottom two income quartiles.
For private tenants the proportion is 57%. There is an overlap of the two
distributions. The overlap is also considerable even if we compare the
percentage of households quartile by quartile from bottom to top.

The PRH programme clearly fails to achieve equity in housing
consumption. In 1981, the incomes of the wealthy half of the public tenants
were equal to the wealthy half of the private tenants. The bulk of the
wealthy half of the public tenants was living in housing units that were
about 60% of the median size of private housing units. Evidently, these
public tenants were living in housing units that were too small relative to
what they could afford in the private market. Those that stayed accepted
their housing conditions only because of the exceptionally cheap rent.

By 2011, there was some improvement, but the problem of overlap
in the distribution of public and private tenants remained substantial.
Some 17% of public homeowners were in the top quartile, against 39% of
private homeowners. In addition, 80% of PRH tenants were in the bottom
two income quartiles, but so were 42% of private rental tenants. The
proportion of lower-income households in public housing has grown simply
because more of them have been admitted into the PRH programme than
previously.

The failure to target housing benefits to the poorest in society is
not surprising. The resettlement programme during the 1950s, which was
the precedent of the current public housing programme, was aimed at
rehousing squatters and was not means-tested in the beginning. Early
squatters were unlikely to be the poorest members of society since they
had paid market rents in squatter areas where housing units were more
spacious than the old private tenements. Later, squatters were primarily
those evicted when old private tenements were torn down or those
who took advantage of the resettlement policy and turned themselves
into squatters by exiting from old private tenements. There was no
presumption that they would be the least well-off in society.

Well-off tenants on the other hand, are encouraged to buy
property in the private market, but it creates a problem. These tenants
see no reason to relinquish their PRH units, so they end up withholding
these units from less well-off households and individuals in the society.
Consequentially, property prices in the private market continue to rise, but
old PRH units will not be released because there is no market for them.

Moreover, without harnessing the power of the market to meet
the needs of households, the crucial long-term consequence of the PRH
regime is that these occupants became tentatively, or even permanently,
immobile and nailed to their units in estates that were far away from
choice jobs, choice schools, and relatives and friends.

If some significant fraction of these households is not poor and can
afford private housing units, then there will be pressure for private property
to rise, due to unsatisfied demand for housing accommodation. In an odd

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