MacaoHousing Policy and Poverty Alleviation
Chan, K.S., Chin, N.K.M., Ao, I.W.
1Macau Social Security Association
2University of Macau
澳門房屋政策發展與貧窮問題
陳建新、錢嘉敏、區耀榮[1]
摘要
澳門過去十年經濟發展，並非一帆風順，而是和香港一樣經歷高低起伏。應知澳門經濟主要以旅遊博彩業為主，可想而知過去的外圍經濟環境改變及零三年的沙士疫症爆發對澳門經濟影響是十分巨大，因此過去十年澳門房屋政策亦多番變改，從而適應澳門社會轉變。俗語話「衣、食、住、行」是人基本所需，住屋可見是生活必需品之一，可是房屋政策卻較少納入社會保障政策中討論。另外，減貧已不只是單純以金錢救助性質為主，過去十數年已擴展至個人發展及社會融合的領域，因此現時應重新檢視澳門房屋政策對減貧的效用。再者，房屋本身有其多面性，它既是必需品、也可以是奢侈品、亦可以是投資工具，因此不少房屋政策研究亦經常從公平與效率方面考慮。本文便嘗試從減貧、公平及效率的角度檢視澳門房屋政策發展。
Abstract
During the past ten years,Macau’s economy and society had undergone various ups and downs in its development. While experiencing the impact of the financial crisis, in 2002, theMacaugovernment decided to liberalize the casino industry. This attempt was met with the challenge of tackling the outbreak of Severe Respiratory System (SARS) crisis. In the aftermath of the crisis, the casino industry took off and brought about an abrupt and sudden increase in the demand for public housing as the property market received a boost from the growth of the casino industry and the prices of private housing escalated. Hence, the government has had to revise the policy on the provision of public housing in order to meet the needs of society. Although housing is a well-recognized necessity, compared with policies on pension and healthcare provisions, there has been inadequate discussion of housing policy which takes into consideration the perspective of social security. Moreover, the definition of poverty alleviation has been broadened in recent decades to include issues such as sustainable livelihood, personal development, and social inclusion. This paper attempts to reviewMacauhousing policy development, taking into account the changes in the definition on poverty alleviation. This paper discusses and reviewsMacauhousing policy development by giving due consideration to housing as a necessity, as an investment vehicle, and as a luxury within the purview of equity and poverty alleviation.
Introduction
Macauis well-known for its vibrant gaming industry and has a high GDP per capita among the East Asian economies. The public, social scientists, NGOs and the government recognize that the development of its social security system in Macaustill lags behind its economic development. In spite of the booming casino industry, the working class has not benefited from the fruits of rapid economic growth.[2] Instead, those in businesses such as property developing industry, catering industry, and the construction industry benefited from the casino boom. With a total land area of about 30 square kilometers and a population of around 550,000, Macao is one of the world’s most densely populated cities (about 19,000 persons per square kilometer).[3] Inevitably, the issue of overcrowding or housing is of grave concern to many in Macau. The influx of foreign workers and opportunistic property investors led to significant increase in the prices of housing (private ownership as well as rental) in Macau; this basic need, i.e. the need for housing, becomes a heavy burden on local residents.[4] As housing becomes a necessity, the issue of public housing is tied to the issue of social security.
Relative to pension and health care, housing has two characteristics – necessity and investment. Being a necessity, housing can provide us with sustainable livelihood (shelter), development (accessibility to education or work), and social inclusion (social contacts). These three components—sustainable livelihood, development and social inclusion—are indispensable for poverty alleviation.[5] Housing is regarded as an attractive investment when property market booms and interest rate remains low. Therefore, housing policy does not just refer to in-kind (social housing) and in-cash provision (subsidy or assistance).
The demand for better housing, especially from the disadvantaged groups from lower strata ofMacausociety has increased considerably. Fortunately, Mr. Chui Sai On, the third-term chief executive of Macao Special Administrative Region, promised to improve residents’ living environment. It is, therefore, high time to reviewMacaohousing policy in terms of poverty alleviation and equity.
Equity
Equity has three different aspects – horizontal equity, vertical equity, and intergenerational equity. Horizontal equity means that the equal treatment of similar needs or abilities. The underlying principle of horizontal equity is to prevent any forms of discrimination, such as ethnicity, gender, and age. Also this concept is applicable to residents who possess similar economic resources only, such as income and wealth.[6] Vertical equity means unequal treatment of different needs or abilities. The underlying principle of vertical equity is about income redistribution (or more specifically progressivity).[7] To be more specific, this concept is to direct some resources from the better off to those who are less well off. In practical terms, the tax and benefit system is progressive if and only if the ratio of tax/ benefit schedules (net income) and original income is increasing (decreasing) with original income.[8]
Intergenerational equity means similar treatment of different generations. This concept comes from the policy formulation process and its relation to intergenerational externality, which always discriminates against the interests of future generations.[9] The future generation cannot express or defend their interests in the policy making process, but the impacts of any inequitable policies have an irreversible nature. Thus, future generation have to bear the adverse consequences of such policies.[10] However, the most relevant remedial measures for this problem would raise another problem – isolation paradox. Isolation paradox is a situation that individual action cannot be fostered without the guarantee of collective behavior. Therefore, the Government plays an important role in guaranteeing collective action by establishing a long-term process involving all the legitimate interests and a shared vision among stakeholders.[11] For the sake of balancing the interests of different generations, social discount rate (or social rate of time preference) was designed for economic evaluation (like cost benefit analysis and cost effectiveness analysis), as well as, evaluation of social projects.[12]
Poverty
Traditionally, the definition of poverty is related to malnutrition or the difficulties of survival. Hence, the measurement for poverty used to be Engel coefficient or food-ratio poverty line.[13] The underlying principle of this measurement is that the higher the proportion of necessity expenditure, the more likely it will be for poverty to increase. This is because the amount of necessity expenditure is more or less equal between rich and poor. In contrast to the simplicity of absolute poverty, the definition of poverty has been broadened to include sustainable livelihood, development, and social inclusion.[14]
Development would be counted as the most effective way for poverty alleviation programs. According to the Millennium Development Goals framework introduced by World Bank, education (to achieve universal primary education) and health care (to reduce child mortality, to improve maternal health, and to combat HIV/ AIDS, malaria and other diseases) are the two essential elements in many poverty alleviation programs (e.g. Education for Rural People).[15] There are numerous studies showing the impacts of living environment on poverty, such as limited accessibility of education and health care.[16] For the sake of promoting social mobility and breaking poverty trap, the design of social or affordable housing should take the accessibility to work and social services, including education and health services, into consideration. Moreover, due to our living environment full of barrier, disabled people always faces higher poverty risk. Recently, barrier free living environment, which is highly emphasized by all urban planners, is proved to promote the accessibility to social services for disabled people. [17]
Apart from sustainable livelihood and development, social inclusion has already caught the attentions of policymakers or lawmakers in poverty alleviation poverty. Social exclusion, antonym of social inclusion, is a multidimensional phenomenon, including legal exclusion, economic exclusion, physical exclusion, exclusion due to lack of provision and exclusion due to stigmatization/ discrimination.[18] To promote the effectiveness of housing policy in poverty alleviation, the government should improve the social environment of social or affordable housing. There are numerous studies proving the significant impacts of social environment, including neighborhood, social structure and community socioeconomic status, on the health statuses and behaviors of residents or tenants.[19] Unsurprisingly, food bank, a traditional poverty alleviation program, is not only served as food distribution centers, but becomes job training centers and organizes many volunteering activities.[20]
MacaoHousing Policy
Similar to Hong Kong, the Government’s first housing project was initiated by the outbreak of a devastated fire. In 1928, the Government built the first public housing estate to shelter these victims of fire.[21] Nowadays, Macau housing policy is to help all Macau permanent residents gain access to adequate and affordable housing and to encourage home ownership in the community. Macau’s housing policy is managed by the Housing Bureau, a subordinate to the Secretary for Transport and Public Works.[22] There are five programs inMacau housing policy – Social Housing, Economical Housing, Home Purchase Loan Subsidy Scheme, Home Purchase Guaranteed Loan Scheme, and Subsidy Scheme for Building Maintenance.
Social Housing
In this program, the government contracts out the construction of public housing to private developers and later rent the apartments to low income families, charging them very low or affordable rental fees. According to the Household Budget Survey in 2007/2008, there are 5% of all households living in social housing. In August 2009, a new administrative regulation, Distribution, Renting and Management on Social Housing, revised the eligible criteria for social housing, including the required period of residency inMacau, raising monthly household income cap, and introducing asset test. The new proposal by the government attempts to move the wealthy or over-qualified households out of social housing provision. On the other hand, in order to ease the housing burden among the residents in the waiting for social housing, the Government subsidizes them to rent private housing by housing allowance.
Economical Housing
Similar to most home ownership programs in developed countries, economical housing is meant for those families who want to buy and own a house. In this program, the Government offer affordable housing toMacauresidents with certain income levels. Although these residents have a higher income level than those who stay in social housing, they still could afford to pay for housing offered in the private sector or the market. Under the regulation of “Contract of Development for Habitation,” the government provides the developers with lands to build housing estates at lower building cost. In return, developers return part of the newly built apartments to the government as a compensation for the land grant. The developers, then, sell the rest of the newly built apartments in the market after having granted the approval by the Housing Bureau in accordance with the conditions and prices listed in the contract.
There are several criteria for application of Economical Housing – the minimum length of residence inMacau(5 years) and a cap on household income. Furthermore, for the sake of optimizing governmental resources, some restrictions, such as prohibited sale period and self-usage, are introduced in this programme. According to the Household Budget Survey in 2007/2008, there are 15% of total households living in economical housing.
Home Purchase Subsidy Loan
A “4% bank interest subsidy” was introduced in 1996, which aimed at stimulating the weak property market and helping residents purchase their own properties. The government established the scheme of credit subsidy for personal housing mortgage loans. This system was prolonged and ended in December of 1999. After the announcement of By-Law N°24/2000, a new round of “4% bank interest subsidy” has begun implementation on 1st July 2000. It has also extended the application duration; this system was terminated on 30th June 2002. In 2009, the government introduced another subsidy loan called “Home Purchase Loan Subsidy Scheme.” It is a subsidy scheme for the monthly housing installment loan, and the property should be meant for self-use, and the corresponding mortgage should be offered by authorized banks or credit organizations. The eligible criteria for application include the bank’s estimated value of the property (less than MOP2,600,000) and the value of the corresponding mortgage less than 90% of the bank’s estimated value of the property. Applicant must be Macau permanent resident, at least 21 years old, and reside inMacaofor not less than 7 years. Under the scheme, there are some limits on the interest subsidy, like the highest subsidized rate (4% p.a.) and the length of the subsidization (10 years). This scheme encourages the shift of demand to properties offered by the market and lowers the demand of public housing.
Home Purchase Guaranteed Loan Scheme
The housing market is based on market price and to a certain extent subject to varying forms of government intervention and regulations. Since the liberalization of the gaming industry in 2003, the median monthly earnings of the employed population have increased to MOP 8,500 in the 2nd Quarter of 2009. However, housing price inMacauhas increased several times. This scheme mainly assistsMacauresidents to purchase their housing by guaranteeing the bank loan. The eligible criteria for the scheme are same as Home Purchase Subsidy Loan.
Subsidy Scheme for Building Maintenance
Subsidy scheme for building maintenance is a subsidy for housing repair, which aims at improving the quality of housing, offered by the Housing Bureau. The purpose is to subsidize the expenditures of maintenance or repair of building’s common areas. It is relevant to assess whether or not the tenants get value for money. Because of the lack of urban planning and complicated property right of housing, Macau urban redevelopment cannot keep pace with neighboring cities, such asHong Kong. The building should be regulated by the apartment ownership system, be built at least 10 years and in accordance with the issued date of the building license and be registered as residential or business purpose at Real Estate Registry. The grant limit of each approval accounts for 30% of the project amount or a maximum of MOP5,000 per individual apartment, and the lower amount will be set as the standard of approval. There is no limit to the number of applications, however, the total amount of subsidy approved should not exceed MOP5,000 per apartment within 5 years, and the type of projects applied cannot be repeated.
IsMacauhousing policy equitable?
Similar to Hong Kong and Mainland China, it is difficult for the government to request some wealthy (over-qualified) social housing tenants to move out of their public shelters, mainly because they are not simply tenants but occupiers.[23] Such a problem could lead to horizontal inequity. Despite some regulations enacted for to resolve such problem, it leads to conflicts between public housing tenants and the government. Hopefully, “Home Purchase Subsidy Loan” and “Home Purchase Guaranteed Loan Scheme” can encourage more capable households to consume private housing and ease this issue of horizontal inequity.
According to some legislative councilors and local scholars, “Home Purchase Guaranteed Loan Scheme” would enlarge the government’s contingency liability, as the property market is very volatile in recent years and Government fully finance or support the scheme. As we know,Macau’s economy is very small and not very diversified (concentrated on gaming or related industries), the guaranteed loan scheme would increase the volatility of government’s finances. This could worsen the vertical equity ofMacauhousing policy.
Macau’s land area is just one fourteenth ofHong Kong’s. Moreover, with limited accessibility to land reclamation (required the approval of the Mainland Chinese government and for environmental consideration) and high-rise apartments (for preservation of historical heritage), the government will face the challenge of sustaining the present generous social housing policy in comparison to its neighboring cities. It is, therefore, not surprising that the Government shifted from in-kind provision into in-cash provision (housing allowances, loan subsidies, and loan guarantee). As economic integration between Macau and MainlandChina(Zhuhai) increases, these in-cash provision schemes could be broadened to include MainlandChina, so that the effectiveness of these in-cash provision schemes could be enhanced.
With lower fertility rates and growing elderly population, reverse mortgage could be introduced. Reverse mortgages let older adults increase their current consumption by using their housing as collaterals. The loan made by the owner is deferred until the owner dies, their home is sold, or the owner is institutionalized. The underlying asset will be sold and used to settle the loan.[24]
How effective isMacauhousing policy in poverty alleviation?
Among the five housing projects, the program for social housing and economical housing could serve the objective of poverty alleviation. Compared with the total number of social housing and economical housing (30,000 units) before 2000, the additional supply of social housing and economical housing after handover is only 2,000 units. As a result, this low provision of social housing and economical housing triggered a great demand for social housing and economical housing.[25] For the sake of timely feedback to the demand, the government has already promised to provide residents with approximately 20,000 public housing. Even though the government can tackle the demand temporarily, with limited land resources and growing number of households (due to family nuclearization and growing number of migrant workers and immigrants), it is very hard for the government to sustain the public housing policy.
Moreover, around 80% of Macau households are living in private housing, but the property right of housing inMacauis not as well-defined. The pace of redevelopment in Macau is much slower than that in neighboring cities, likeHong Kong. Thus, there are inadequate facilities toMacauresidents living in old regions. In order to improve local residents’ living environment, the government should establish a consultative committee, such as the Commission on Rehabilitation Affairs and Urban Redevelopment Committee, to advise the government on improvingMacauliving environment and promoting social cohesion in old regions. Furthermore, a subsidy scheme for building maintenance and upgrading home care service could definitely help under-privileged groups to have a better living environment.
As poverty or social exclusion is multi-faceted, Social Welfare Bureau delivered various programs for poverty alleviation in underprivileged area.[26] For example, Social Welfare Bureau established a multi-disciplinary team for home care services to encourage older adults living in community and improve the living environment of those needy older adults.[27] Social Welfare Bureau has just introduced standardized assessment mechanism for elderly services and rehabilitative services to meet various demands of disabled or elderly persons. However, as these services are recently introduced, there is lacking any relevant evaluation of these services.
[1]陳建新為澳門大學、政府及行政學系、助理教授及澳門社會保障學會會員；錢嘉敏、區耀榮皆為澳門大學、政府及行政學系、碩士生。
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