Community & Education Opinion

No surprises: Hong Kong’s Small House Policy has always been a racket

Did the earth move for you? As Hemingway might have put it. It did for me. Last week a local District Court Judge jailed 11 New Territories villagers and a would-be developer for misrepresentation and perjury. Their crime was to apply for the right to build a “small house” under the policy which allows the male descendants of indigenous villagers to build such a house for their own use. The villagers had in effect handed over their right to build a house to the developer in return for a sum of money.

small house NT

Houses in New Territories. Photo: Apple Daily.

The developer would then build the houses and sell them to people who might not be indigenous at all. Of course the government departments to which various people applied under the scheme were not told that this was going on. How this interesting arrangement came to light remains a mystery. After a civil case this week which also involved the Small House Policy the Lands Department had the brass face to issue a press release saying that it would “cooperate with law enforcement agencies in following up suspicious cases of small house applications”.

The funny thing about all this is that this sort of abuse of small house applications has been going on under the noses of the relevant departments for at least 30 years. About a decade ago the late Kevin Sinclair wrote a comprehensive complaint about the matter. He outlined the racket, the procedure and the terminology. The price of signing the documents to claim the right to build a small house is apparently known as the “ding”. When Mr Sinclair wrote his piece the “ding” was half a million bucks. In the latest cases it seems to have come down to something between $100,000 and $200,000. This suggests that the Lands Department’s vigilance has not yet produced a shortage of willing participants in bogus arrangements.

lands department

Photo: HKFP.

Of course Mr Sinclair was not claiming a scoop. Many people had known and said for many years that most of the applications to build a small house under the policy came from people who had no intention of living in the resultant property, or indeed in some cases in Hong Kong. When I lived in a New Territories village it was commonplace to meet “villagers” with fluent English and conspicuous Manchester accents who made no bones about the fact that they had only returned to Hong Kong to collect their “ding” and were hanging about waiting for the few weeks required to process the application. Small houses, if you look at them closely, usually turn out to have been built as three flats. This means that the owner, if he does live in the property, can inhabit the third at the bottom and let the rest.

At some villages, including the one which Mr Sinclair lived in, it was very easy to see what was going on. There was the village, still inhabited by the villagers, and there was a cluster of “small houses” outside the village, all of which had been sold to outsiders. All this was clearly a violation of the government’s intention in introducing the policy. Nobody at any time suggested that it was illegal.

heung yee kuk

I remember way back in the early 80s editing a story for the Hong Kong Standard which reported that a member of the Heung Yee Kuk had complained that not only was the policy being abused, but some members of the Kuk were among the abusers. For some reason he found this surprising. At about the same time my brother moved into a pristine, freshly-minted small house which had clearly been built under the programme. Some nifty legal work was required to get round the restrictions on early sale. He also had to do quite a lot of building work on the house because of the three flat syndrome.

People have occasionally suggested that the whole arrangement is sexist – which it clearly is: daughters do not inherit the same right. They have also complained that it results in untidy and incoherent development round villages, which is plainly true in many cases. They have complained that the government originally promised that if the scheme was abused it would be cancelled, which turned out to be as unreliable as official predictions about the effect and use of new legislation commonly are. Put not your trust in princes. There have also been complaints that the huge quantity of land which the government has reserved for this purpose could be put to better use.

small house policy

File photo: Apple Daily

Defenders of the scheme cite the bit in the Basic Law about the traditional rights of New Territories residents, which is hardly relevant because there is nothing traditional about the Small House Policy. It is also defended as a prop to the traditional way of life, but this is not born out by observation at all. On the contrary – in many cases – the owner of a new small house is able to give up work of all kinds and devote the rest of his life to counting money and playing mah jong.

When I lived in a New Territories village, my neighbours had been scrupulous in observing the rules. All the houses in the village still belonged to the clan, with the exception of mine, which had been exempted because in the Post Office’s house numbering exercise it was allocated the ominous number 44. Villagers made admirable efforts to preserve their traditions, even though most of them commuted to work in the urban area. They were also very hospitable. Efforts to preserve traditions were, though, not helped by the fact that many families depended more on the rental income from their upper floors than on paid work. And agriculture had been abandoned completely.

Still, whether you like the Small House Policy or not, the idea that it is illegal to apply when you have no intention of living in the resulting house comes as a bombshell. Was it always illegal? And if so why did nobody come unstuck before? Abuse has for decades been rampant, public, conspicuous and regularly reported. Was this, one wonders, one of those areas where the “law enforcement agencies” got the message from senior officials that their best efforts were not wanted? If you enjoy conspiracy theories you can contemplate the possibility that the new policy of prosecuting bogus applicants will end the Small House Policy as we know it, and this is Uncle Fat’s punishment for missing his chance to vote for sham democracy. That is too complicated for me. I think it was just that the thieves fell out and someone blew a legal whistle. Still, relevant departments should take note. We do not want to wait 40 years for the next case.

No surprises: Hong Kong's Small House Policy has always been a racket