In the heart of Hong Kong, amidst the pulse of a vibrant city, a hidden world is tucked away from plain sight—one of cramped, dingy cubicles lining neon-lit corridors. Each space is smaller than a prison cell, too small to be customized much: a photo frame here and there or a toy for comfort. Its residents are densely crammed together, separated by a paper-thin wall that affords little to no privacy, and are left inhaling stale air throughout the sweltering summers. This is the reality for the over 220,000 people who live in Hong Kong’s infamous “coffin homes” [1]. 

Inside Hong Kong’s Dire Housing Crisis

Hong Kong has been ranked the world’s most unaffordable property market for 14 consecutive years, according to the Demographia International Housing Affordability report [2]. At a cost of approximately 25.1 times the median annual wage in 2024, Hong Kong’s housing market is incomparable to anywhere in the world; this includes the U.S., where the median housing price costs a mere six times the median annual wage. Even the notoriously exorbitant houses of Los Angeles cost only 12.5 times the median annual wage. [3]. For the majority of Hong Kong residents, the dream of owning a home is rapidly slipping out of reach—after all, they’d need to work more than 23 years on average to afford one [4]. 

These eye-watering prices leave many Hong Kong residents living in subdivided flats (SDUs), some of which are known as “coffin homes”—tiny, windowless rooms just big enough for a bed, most of which are found in the rundown areas of Kowloon and the New Territories. Renting an SDU is often more expensive per square meter than renting a traditional apartment, making it financially lucrative for landlords. However, the conditions are far from ideal: around 70 percent of SDU residents face intense heat, while 60 percent suffer from poor ventilation, creating breeding grounds for disease during the sweltering summers [5]. With limited or no sunlight, there is almost no sense of time in these homes. Some of these SDUs even have “cage homes,” which are cubicle-wide spaces with walls of thin, metal wires, akin to an animal cage. A survey by the Kwai Chung Subdivided Flat Residents Alliance found that around 75 percent of the residents suffered from moderate to severe depression and/or anxiety, and it’s no surprise—tenants live in a constant state of insecurity, subject to rent increases, poor hygiene, and paralyzing guilt for parents that can’t give their children a better life. Afflicted with grief, “they regard living in subdivided units as a failure,” one tenant says. “None of them thinks of their unit as home, and they view themselves as passers-by with no roots” [6]. For many families, this harrowing reality is unavoidable. It is simply too expensive to escape these coffin homes. 

The Creation of A City Under Pressure 

Hong Kong’s sky-high housing prices partially stem from its property ownership system. Historically, Hong Kong’s system of property ownership has been pricey. Following the rapid decolonization post World War II, Hong Kong began its life as Asia’s financial hub. Hong Kong expanded trade ties and maintained exceptionally low taxes all throughout the 1997 handover to Mainland China [7]. Whilst its reputation as a “tax haven” has attracted foreign businesses worldwide, Hong Kong needed to generate government revenue through other means—predominantly, through land sales. In the status quo, all land is centrally owned by the government, which is then leased out to developers by auction. With demand for land skyrocketing, developers and subsequent landlords were willing to buy this land at a hefty price, ultimately charging residents astronomical prices for tiny spaces of accommodation [8].

Several intricately connected factors have contributed to the growing housing crisis in Hong Kong, including insufficient public housing, inefficient land use policies, and an incredibly dense population. As the fourth most densely populated city amongst sovereign states, it is no surprise that the nation is struggling to find room for its crowded throng, especially when only 3.7 percent of Hong Kong is zoned for high-density urban housing, further constraining supply and driving up prices [9]. This can be partly explained by Hong Kong’s history. In 1997, the Asian financial crisis catalyzed the crash of Hong Kong’s property market. The crash led to a drop of almost 70 percent in home values, leading to widespread panic and outrage [10]. Tung Chee-Hwa, Hong Kong’s Chief Executive at the time, caved to public pressure and decided to halt the development of all new public houses in hopes that this would restore the value of Hong Kong’s property by constraining supply [11]. However, in the decades following 1997, Hong Kong has been unable to build enough to catch up to the overwhelming need for public housing. Although the Hong Kong government has made efforts to address the housing shortage through public housing, the supply has consistently fallen short of the demand. As a result, the average wait time for public housing has ballooned to around 5.3 years [12]. 

Paving The Road To Progress

There are a few approaches that the government could take to address the housing crisis, some of which are in progress today. Firstly, an increase in public housing units would reduce wait times and residence in the SDUs. The government could partner with private developers to tap into market forces and private financial incentives. Public-private partnerships were first proposed in the Private Subsidized Sale Flat Pilot Scheme in 2023, which encouraged private developers to rezone private land for the purpose of building more housing units. In the 2023 pilot scheme, private developers were only required to pay a third of the market land premium for housing development. This gave developers an incentive to partner with the government whilst boosting the construction efficiency of public housing units due to profit motivation. These partnerships would maximize the development potential of private land to ensure that Hong Kong’s limited space is utilized effectively [13]. Hong Kong can also aim to make public housing units cheaper and more accessible. An increase in subsidized sale flats, offered at less than 65 percent of the market price under the Home Ownership Scheme, could allow greater upward mobility on the housing ladder for the middle class, enabling their escape from the city’s coffin homes [14].

Similarly, the Hong Kong government is also considering multiple land reclamation projects to increase the supply of habitable land, such as the Northern Metropolis project and the Lantau Tomorrow project [15]. These would reclaim island territory near Hong Kong, including around Kau Yi Chi and Hei Ling Chau islands, and provide between 150,000 and 260,000 housing units to residents. These artificial islands aim to dedicate 70 percent of their surface to housing. Land reclamation is a practice familiar to other Asian countries like Singapore, whose aggressive territory expansion through artificial land has demonstrated the potential success of this land development strategy. Even Hong Kong’s International Airport was built on reclaimed land in 1998 [16].

Nevertheless, these large-scale land reclamation projects are ambitious. They face many logistical challenges and may damage the surrounding nature. For instance, reclaimed land may narrow water-current channels. Professor Will Glamore at the University of New South Wales’ Water Research Laboratory warns this may deplete oxygen supply for nearby marine life [9]. Further, a predicted 200 million tons of sand would also be needed to build the first island alone, and if it is not handled carefully, sediment may irreversibly damage nearby seabeds and phytoplankton. Such damage was seen with Malaysia’s controversial and destructive reclamation of Penang Island [17]. Additionally, with plans predicted at over 624 billion HKD (around 80 billion USD), the exorbitant prices of these land reclamation projects may also increase pressure on other government streams of income. Consequently, auction prices would remain high during the project’s lengthy construction [18]. The Hong Kong government ought to be careful if it proceeds; land reclamation is a time-consuming process, and it is vital that other measures are taken in the short-to-medium term to ensure that those suffering right now aren’t neglected for the promise of a better future. 

Secondly, hygienic and affordable transitional housing units may ease the short-term strain on the public housing system and reduce the 5.3-year waitlist. Chief Executive John Lee has pledged to build 30,000 of these transitional units in the next 5 years, which would offer much-needed immediate relief to residents living in the unaffordable and unkempt SDUs [5]. Though this does empower tenants by reducing their waiting time in the SDUs, it is not a permanent solution to the housing crisis [19]. In order to prevent this stopgap measure from becoming permanent for families, the government must continue phasing out SDUs, increasing public housing, and making private property more affordable.

Stronger regulations on the property market may also prevent monopolies and improve housing conditions. The Landlord and Tenant Ordinance, amended in January 2022, outlaws overcharging tenants for utilities like water and electricity and prohibits rent increases in the first two years of new leases. However, a group of subdivided flat residents rallied in the streets, arguing that many landlords had found a loophole; by not renewing expired leases, landlords continued to overcharge residents for utilities [20]. A report made by a local NGO in 2021 also found that fire safety instructions were issued to over eight thousand buildings, yet specific improvements were only delivered to around 300 [21]. Inspections and prescriptions are crucial, as well as tangible disciplinary consequences for landlords who don’t follow these safety guidelines. Therefore, more resources need to be dedicated to the enforcement of welfare policies, not just creating legislation to uphold citizens’ safety in the SDUs and hold landlords accountable. These enforcement measures will not reduce the price of Hong Kong’s property, but they will create safer, more secure homes in the SDUs. 

Finally, financial support for young people could also ameliorate the growing distress and frustration in the younger population. For many young Hong Kong residents, it is simply not feasible to work for over two decades before being able to afford a house. Fortunately, the government has made strides to tackle this growing frustration amongst the youth. In 2023, the government developed a 27-story youth hostel in Yuen Long, with rooms that cost half of the market rates. Applicants needed to be between the ages of 18 to 30 and were required to complete at least 200 hours of community service, achieved through projects like tutoring underprivileged students [22]. Initiatives like these may ease the financial burden on the younger generation whilst encouraging them to give back to the community in meaningful ways. It would be incredibly beneficial to see more of these youth support schemes around Hong Kong, including housing subsidies for younger demographics or a first-time homebuyer program. 

To conclude, Hong Kong’s housing crisis is one of the most severe in the world. In the face of Hong Kong’s glamorous businesses and flourishing economic activity, the world overlooks thousands of residents entrenched in debilitating poverty. The harrowing reality is that despite being the backbone of Hong Kong’s labor, hundreds of thousands of workers are stuffed into suffocating coffin homes and forgotten by headlines worldwide. The issue of housing prices is deeply structural, and considering Hong Kong’s firm dependence on its current property market system, there is no single solution that will untangle its housing crisis. However, discourse surrounding potential government measures, including stronger regulations, public housing expansion, and financial support for younger people, offers hope for addressing the issue. As the city continues to grow, innovative solutions, including public-private partnerships and increased land reclamation, will be essential to ensure that future generations of Hong Kong residents escape their coffin homes and have access to affordable, safe housing—so long as Hong Kong acts as soon as possible.