Population mobility, tenure choice and institutional factors

The Hong Kong government is involved deeply in the housing market. It provides public rental blocks as well as subsidised housing for sale. Government intervention has created various institutional factors in the form of relocation restrictions and subsidies. Little research has been done in the past to address how mobility is affected by institutional factors, in terms of the unique tenure structure in Hong Kong. This research aims to bridge this gap. It is found that government policy has a significant effect on the mobility of households, in particular the public rental sector. Further, the patterns of tenure choice are significantly different for households of public and private sectors. There are signs that the government is intending to minimise its role in the housing system. The suspension of the HOS programme together with the cancellation of loan subsidies could further restrain the mobility of public sector households. Institutionally induced spatial lock-in among public sector households will be aggravated in the near future. It is recommended that the loan scheme should be reinstated to provide an alternative and incentive for the households in the public sector to relocate and return their flats to the Housing Authority. This can help relieve the financial pressure in the face of a budget deficit because loan subsidies are more cost effective than subsidies in kind.