Hong Kong's housing woes remain acute, with the number of people on the waiting list for rental public housing now surpassing the 200,000 mark. The most depressing fact is that nearly half of the new applications are from young singletons. There are many reasons for such a phenomenon, but the cruel fact is that this is a clear indication of how serious the problem is.

The number of newly built rental public housing units is an average of 15,000 units annually. Together with recycled units, about 20,000 rental public housing flats can be allocated to applicants each year. Many critics point to the 20,000 allocations and the 200,000 in the queue, saying it will take more than 10 years to clear up those on the waiting list. This contradicts with the government's pledge to provide each applicant with a rental public housing unit within three years. Nevertheless, the government's pledge relates to the average time for the first allocation of rental public housing. There are many cases in which applicants make special requests, thus lengthening the waiting time. Also, among the 200,000-plus applicants, many of them are not qualified for rental public housing. If we take all these factors into account, the government is still able to fulfill its pledge for the time being. As pressure on demand for rental public housing mounts, it's unclear if the government's promise can be kept, or for how long. It's not surprising the government has admitted it faces a daunting task.

Many people say because of this challenge, the government should build more rental public housing units. Again, this is easier said than done. The authorities had mentioned earlier that the annual production of new rental public housing units will reach 20,000, which is 5,000 units more. In terms of percentage, the increase in production of rental public housing units is one-third. When we evaluate this from a practical standpoint, this is a challenging target. If a company is to raise its production by one-third in a year, such an increase, naturally, would call for greater input. Any increase in rental public housing is no exception. The additional demand for land, construction workers, plus human and financial resources, will present even bigger challenges to the Housing Authority.

With Hong Kong continuing to reel from a dearth of land, construction of new public housing estates is adversely affected under the existing environment. Public housing estates in highly congested neighborhoods are often characterized as homes for the grassroots. Many people do not welcome public housing estates located in their vicinity, and this aggravates the problem of finding land for building public housing estates. Growing demand and the increase in the production target have made the granting of additional land more difficult. This is the number one headache for the government.

The second major challenge for the government is the acute shortage of construction workers at present, with a string of major construction projects on stream. The building industry is also perceived by young people as being tough, to the extent it deters new blood from being recruited. With the increase in the production target of rental public housing, the problem of labor shortage in the construction industry will get worse. If the target is to be met, it's essential to have sufficient construction workers. Nevertheless, labor shortage in this sector seems systematic, and there's no simple way out.

The third challenge concerns human and financial resources. Many people don't realize that it needs supporting expertise in the construction of public housing estates. The demand for extra human resources will come with the new production target. The one-third increase in the production of rental public housing means greater demand for financial resources. Getting the necessary human and financial resources will be an arduous job for the Housing Authority.

It's easy to criticize the government for being unable to resolve the problem overnight. But, there are real considerations to be addressed. The criticisms will still go on with no canned solution in sight.

The author is dean of the School of Business at Hang Seng Management College

(HK Edition 11/21/2013 page1)