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Following an earlier study of optional retirement, the Bauhinia Foundation Research Centre (“The BFRC”) today released the second part of its competitiveness studies into ageing population, which sought to tackle the city’s elderly housing issues from a new perspective.
According to the report entitled Rethinking Housing for the Elderly, the number of persons aged 60 or above will rise to 2,739,500 by 2036, which accounts for 32% of the total population (2006: 15.9%); the elderly dependency ratio is also projected to increase from 176 in 2006 to 456 in 2036. Over time, there will be more single elderly households with their spouses passing away or their children moving out. A Thematic Household Survey released by the Census & Statistics Department in 2008 showed that 70.4% of elders suffered from chronic diseases and needed support services. These demographic trends point to the increasing demand for elderly housing and related support services over the next three decades.
BFRC Chairman Mr Anthony Wu said, “Irrespective of their economic backgrounds, we must recognize that all elders have specific needs for support in terms of daily living and living environments. Our existing elderly housing policy is geared towards those inside the ‘welfare net’ through public rental housing, government-subsidized sale flats and subsidies for refitting old tenement buildings.
“There is an absence of a clear policy to address the housing needs of those who fall outside the ‘welfare net’. While there are variations in their financial backgrounds, our research focus is on those who only have self-occupied flats with lower monthly income. And most of them live alone or with spouses only. ”
BFRC Director and Convener of the Study Group Ms Winnie Ng said, “From a competitiveness perspective, we advocate the concepts of ‘social inclusion’ and ‘ageing in place’ towards the direction of community-based elderly care, rather than institutional care.
“Through the concerted efforts of the Government, NGOs and the private sector, we believe this will improve the quality of life of our elders and help alleviate the increasing public burden resulting from Hong Kong’s ageing population.”
The report has put forth nine major policy recommendations under three directions, including land planning, financial arrangements and support services.
(1) “Mixed development” concept
The concept can be applied to both public and private housing. Housing blocks can be designed such that the lower floors are suitable for parents while their children may choose the upper floors. The concept can be expanded to a community level where some housing blocks are specially designed and fitted out for elders, while ordinary housing blocks are available nearby for their children.
(2) Planning provisions for elderly housing
Hong Kong’s ageing population needs to be considered in land use planning. The study recommends:
• Constructing multi-functional activity centres on the fringes of large urban parks, and support facilities on the periphery of housing estates to provide recreation and facilitate ageing in place; and
• Building low-rise retirement villages around green belts and country parks of Northeast and Northwest New Territories.
(3) Land policy
• Making land grant policy for elderly housing sites more transparent so that potential developers can put forward their bids and proposals via restricted tender or expression of interest;
• Making appropriate adjustments to land premiums to reflect the eligibility rules on age, income and asset; and
• Disposing of more residential sites (RA and RB) with a requirement that certain specially designed flats are to be built for elderly households.
(4) Lease modification
• Encouraging private developers to develop the elderly housing projects through their own “trust funds” or “foundations”;
• Encouraging NGOs with land and resources to provide elderly housing with support services; and
• Formulating a clear land policy in dealing with such lease modification applications, surrender and re-grant (including valuation principles and premium setting).
According to the 2008 Thematic Household Survey, 47.3% of elders did not make any arrangements regarding future financial needs. A related study in the same year also showed that more than half of the respondents were concerned about the high living cost and insufficient savings or income to sustain future living. Upon retirement, an average employee will likely find the MPF payment inadequate to ensure a living standard comparable to his or her pre-retirement days given MPF’s short history. All these findings highlight the financial needs of elders after retirement, and reverse mortgage and elderly housing insurance are among our recommendations to meet their needs.
(5) Reverse mortgage As far as elderly homeowners are concerned, reverse mortgage enables them to improve their living conditions and meet day-to-day needs by ‘encashing’ their properties. Elderly homeowners can borrow money against the equity in their flats; they can continue to live in these flats until they voluntarily move or pass away. Principal and interest are payable only upon sale of flats. While reverse mortgage has yet to be introduced in Hong Kong, the Hong Kong Mortgage Corporation has announced its plan to conduct a feasibility study into the subject. We consider that market acceptability, contingent liability and the Government’s role are critical issues that need to be thoroughly considered before its introduction.
(6) Elderly housing insurance
In recent years, major banks and insurance companies have launched plans and products to meet the post-retirement financial needs of their customers. We propose that the insurance industry study the development of voluntary housing insurance plans for elderly accommodation. At the end of the contribution period, these plans could enable policyholders to use the lump sum to purchase ‘lease for life’ flats, which are similar to those under ‘Senior Citizens Residence Scheme’ of the Hong Kong Housing Society. If the supply of ‘lease for life’ flats is significantly increased, there would then be a critical mass big enough to attract financial institutions to develop these plans.
(7) Market for furnishings and fittings for elderly households
The Government may consider commissioning relevant professional bodies such as the Hong Kong Institute of Architects to study design and refitting issues and come up with packages for different affordability groups. It would also be advisable for incorporated owners of private buildings aged 40 years or above to adopt designs tailored for elderly homeowners in major renovation plans, and assist them in refitting their flats.
(8) Coordinating support services
There is a need to review support services in order to improve accessibility and reduce duplication in case management. It would be equally important to study how to better coordinate the housing and support services of public and private sectors, including volunteer work.
(9) Public education
We also recommend conducting continuous publicity campaigns and promoting benefits associated with refitting elders’ homes.
“Clearly, our recommendations call for extensive discussions within the community. But in view of our rapidly ageing population, we need to act sooner rather than later to tackle these critical issues, which will impact on most of our families,” Ms Ng added.