Shadowing Practice: Inside Hong Kong’s cage homes - Learn English Speaking with Video

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It's more expensive to live in Hong Kong than anywhere in the world.

Hong Kong has been ranked the least affordable housing market in the world eight years in a row and by a long shot.

Housing prices are now almost 20 times more than annual income. That means that a household making $50,000 USD would on average be looking for a house that cost $980,000 USD.

And it's getting really bad.

Hundreds of thousands of residents now squeeze into incredibly small apartments, most of them no bigger than a parking space. So these are cage homes, which basically fit one person and their belongings. And they basically stack these in a room in order to fit as many people as they can in the room. And yet the price per square foot for these smaller houses just keeps shooting up.

I visited these homes to try to piece together an explanation for this trend and to meet the people who are being squeezed by the world's least affordable real estate market.

There are now tens of thousands of people in this city who live in spaces that are between 75 and 140 square feet. For some perspective a typical parking space in the US is 120 square feet.

One of the most common strategies for small space living is this subdivided house model. This big space that's been divided up into a bunch of tiny little living spaces.

These people basically have room for a bed and a table and a few belongings.

What makes this model work is that they have a bigger communal space where they're able to have their cooking and their washing and the bathroom open to everyone, so that they can save space and save money in their actual living quarters.

So this is the kitchen for this space which is shared by four families.

The tempting explanation here for why the prices are so high is land scarcity. You know, seven and a half million people crammed into this series of islands, it's gonna drive up the prices. The same story in a lot of places that have run out of land that are in high demand — in San Francisco or New York City.

Okay this might be the story in New York City and San Francisco, but is Hong Kong actually running out of land? Let's see what the drone says about this.

Flying over Hong Kong you start to see that, while yes, there's a very dense urban landscape, there's also a whole lot of green space.

Government land-use data says that 75 percent of the land in Hong Kong is not developed. Now some of that is mountainous and rocky and not easy to build on, but certainly not all of it.

So I posed this question about density to two experts, one is a Hong Kong citizen and the other is a 30-plus year resident. Both are advocates for better urban design.

Are high prices primarily the result of land scarcity?

No. No. There's a land-use issue, because also land is being inefficiently used or conserved.

The problem isn't the shortage of land the problem is bad land management.

Land use, land management, what these experts are referring to is that of all the land in Hong Kong only 3.7% is zoned for urban housing.

But it's not because of mountains, it's because of policy and this gets to the heart of the explanation of why more and more people are living in homes the size of parking spaces.

The first thing to note if you want to understand the real explanation, is that the government owns all of the land in Hong Kong. Well, all except for this one church that the British built here when they ruled it back in the 1800s and it kind of just escaped the whole government-owns-all-the-land thing.

So the government owns all the land and it leases it out to developers, usually for 50 years in an auction process where the highest bidder gets the contract. With such scarce and valuable land zoned for housing, real estate companies more and more of them coming from mainland China with lots of money, will duke it out in these auctions.

And will end up at an astronomically high price.

Like this plot of land that was just leased out for 2.2 billion dollars, which set an all-time record for the most expensive land of ever leased by the Hong Kong government to a developer. So the way the government zones and leases land is the first part of this. The other part of this explanation has a lot to do with taxes. If you're the type of person who navigates away from this video when you hear the word tax policy, stay with me here.

This place loves low taxes. It's a great place to do business, because the corporate tax is low no value-added tax, no sales tax, free market economics, low taxes. That's embedded into the fabric of this place.

Look at all those low taxes doing their work, building up those skyscrapers, slapping on those bank logos all over town.

So if the government isn't getting revenue from taxes, it really needs it from another source and in the case of Hong Kong that source is land sales.

A lot of the government revenues here driven by land revenues and it's about 30% of government public financing income.

The government of Hong Kong can lease out this land to developers at astronomical prices, make a ton of revenue from that and not have to raise taxes on the people or the corporations that reside here and they still proudly retain their ranking as the freest economy on earth.

What this means is that the Hong Kong government doesn't have a huge incentive to free up more land and lower prices, but while this current arrangement of bidding and auctions is really good for revenue for the government and good for the market generally, it's not super good for the people of Hong Kong.

Of all the small spaces, this is easily the most cramped. These are coffin homes.

Could I ask you just a quick question about your living space?

The government is slowly working on this problem.

Year after year new policies come in that are meant to fix this, but they're slow to change, mainly because they have an incentive to keep the status quo as it is.

Out here at this industrial complex in Hong Kong, I met with a guy named Eric Wong, a local inventor and businessman who has seen a business opportunity in the midst of this space crisis.

Eric grew up in Hong Kong and has been thinking about small-space living for a long time.

Oh it has WiFi.

These capsules come in one or two-person sizes and are meant to provide a more efficient and hygienic version of the cage and coffin homes, all at a relatively low price.

Down here there's a little box where you can put all your valuables and so there's mirror lights, there's reading lights.

But these capsules, innovative as they are, really just put a band-aid on this housing problem. They don't serve as a real solution.

A real solution would need to come from something that's much less profitable and fun to look at: Government policy and zoning reform that will free up more land and put the interests of the people above the interests of the market, but until the government can make that happen people in Hong Kong will continue to squeeze into smaller and smaller spaces.

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Word	Pronunciation	Meaning
lease noun	/liːs/	An interest in land granting exclusive use or occupation of real estate for a limited period; a leasehold.
squeeze verb	/skwiːz/	To apply pressure (to something) from two or more sides at once.
developer noun	/dɪˈvɛləpɚ/	A person or entity engaged in the creation or improvement of certain classes of products.
scarcity noun	/ˈskɛɹsɪti/	The condition of something being scarce or deficient.
capsule noun	/ˈkæps(ə)l/	A membranous envelope.
coffin noun	/ˈkɔfɪn/	A closed box in which the body of a dead person is placed for burial.
incentive noun	/ɪnˈsɛntɪv/	Something that motivates, rouses, or encourages.
belonging noun	/bɪˈlɔŋɪŋ/	The feeling that one belongs.
cage noun	/keɪd͡ʒ/	An enclosure made of spaced bars, normally to hold animals while providing some ventilation.
astronomical adjective	/ˌæs.tɹəˈnɑm.ɪ.kəl/	Of or relating to astronomy.
astronomically adverb		Of or relating to astronomy.
bidder noun	/ˈbɪ.dɚ/	Someone who bids (all senses), but most commonly, one offers to pay a specified price at an auction.
conserve verb	/kənˈsɜː(ɹ)v/	To save for later use, sometimes by the use of a preservative.
hygienic adjective	/haɪˈd͡ʒiːnɪk/	Pertaining to hygiene; clean, sanitary, free of disease.
inefficiently adverb		In an inefficient manner.

Word	Meaning
build up verb	To erect; to construct.
drive up verb	To cause or force a price, quantity, rate, etc. to increase.

Structure	In the video
Passive voice be + past participle — the focus is on what happens, not who does it	has been ranked · being squeezed · been divided
Present perfect have/has + past participle — a past action that still matters now	has been ranked · that's been divided · have run
Relative clauses who / which + clause — extra information about a person or thing	people who are · space which is · person who navigates

Shadowing Practice: Inside Hong Kong’s cage homes - Learn English Speaking with Video

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