In wealthy Hong Kong, poorest live in metal cages

Metal cages

The soaring costs are putting decent homes out of reach of a large portion of the population while stoking resentment of the government, which controls all land for development, and a coterie of wealthy property developers. Housing costs have been fuelled by easy credit thanks to ultralow interest rates that policymakers can't raise because the currency is pegged to the dollar. Money flooding in from mainland Chinese and foreign investors looking for higher returns has exacerbated the rise.

In his inaugural policy speech in January, the chief executive said the inability of the middle class to buy homes threatens social stability and promised to prioritize tackling the housing shortage.

"Many families have to move into smaller or older flats, or even factory buildings,'' he said. "Cramped living space in cage homes, cubicle apartments and sub-divided flats has become the reluctant choice for tens of thousands of Hong Kong people,'' he said, as he unveiled plans to boost supply of public housing in the medium term from its current level of 15,000 apartments a year.

His comments mark a distinct shift from predecessor Donald Tsang, who ignored the problem. Legislators and activists, however, slammed Leung for a lack of measures to boost the supply in the short term. Some 210,000 people are on the waiting list for public housing, about double from 2006. About a third of Hong Kong's 7.1 million population lives in public rental flats. When apartments bought with government subsidies are included, the figure rises to nearly half.

Anger over housing prices is a common theme in increasingly frequent anti-government protests. Legislator Frederick Fung warns there will be more if the problem can't be solved. He compared the effect on the poor to a lab experiment.

"When we were in secondary school, we had some sort of experiment where we put many rats in a small box. They would bite each other,'' said Fung. ``When living spaces are so congested, they would make people feel uneasy, desperate,'' and angry at the government, he said.

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