Housing is a basic human need – although affordable and sustainable housing isn’t so common in Hong Kong. The snowball effect of this unmet basic need may be larger than we might think. As a matter of fact, The World Economic Forum publishes a network map linking housing developments with major social and environmental issues.
A “silver-lining” as it may seem, Covid-19 provides us with an opportunity to undertake a paradigm shift in housing – from affordability, and community facilities to design and the use of technology and environmentally-friendly. This can ensure that we can stay in houses that are liveable, affordable, and sustainable.
In this blog, we will discuss why affordable and sustainable housing matters, the state of affordable and sustainable housing in Hong Kong, and the opportunities and challenges in investing in affordable and sustainable housing.
Addressing affordable and sustainable housing from the United Nations SDGs
Housing occupies an important place in the UN SDGs. SDG 11 Sustainable Cities and Communities specifically focuses on a liveable environment for people from all walks of life. According to Habitat for Humanity, housing affordability is named “a prerequisite of progress toward sustainable cities and communities”.
Source: SDG BOOKLET – Habitat for Humanity (p.9)
Habitat for Humanity adds that UN SDG 11 is closely related to different UN SDGs:
World Green Building Council believes that sustainable housing materials are related to the following UN SDGs:
Source: World Green Building Council
A look into Hong Kong’s housing landscape
Conventional wisdom suggests that the first case for affordable and sustainable housing was the government’s support for non-governmental organisations to build hostels for working youths in the then Chief Executive C.Y.Leung’s 2011-12 policy address. Affordable and sustainable housing gained the further spotlight in 2017 when the Social Innovation and Entrepreneurship Fund and Community Trust supported the Hong Kong Council for Social Service in managing Community Housing Movement.
Nevertheless, a research article by the Hong Kong Institute of Architects showed that in the 1950 and 60s, there were philanthropic housing initiatives for the poor in Hong Kong. The Hong Kong Model Housing Society (HKMHS), the Hong Kong Housing Society (HKHS), the Hong Kong Settlers Housing Corporation Limited (HKSHCL), and the Hong Kong Economic Housing Society (HKEHS) built welfare housing estates. While these societies, except HKHS, ceases to exist, these societies proved that besides government and commercial developers, there can be a third way for affordable housing to be provided.
Last year, New World Development set up a social enterprise “ Build for Good”. It aims to provide “short to medium-term solutions and long-term strategies to address Hong Kong’s housing and land supply problems.”
Any inherent risks in these impact ventures?
At first glance. affordable and sustainable housing offers lots of investment opportunities since housing is a necessity for every member of the community. However, ventures in affordable and sustainable housing need to address the following risks:
Let’s start with the environment. Ventures need to manage their environmental impacts effectively, ensuring that community members can live sustainably. Excellent environmental impacts require the ventures to rethink their approach to housing, from reviewing housing orientation, and window and ceiling design to building materials to maximse energy and water efficiency.
Relationship with the community is another area for ventures to manage their risks. Addressing these risks requires the ventures to meet the expectations of the local community. While local community’s expectations vary, ventures should be committed to creating a thriving community for residents and businesses.
Ventures should be prepared to address policy risks. These include the government’s policy on housing, building materials, and community planning. These risks can affect housing projects’ capability to meet the community’s expectations to live affordably and sustainability.
If I am interested in affordable and sustainable housing impact ventures, what should I consider?
To evaluate investment opportunities in affordable and sustainable housing, investors need to assess the ventures for
- Environmental impact – the ventures’ capacity to produce environmentally sustainable and efficient housing materials and
- Partnership with other stakeholders such as property developers and non-governmental organisations – will affect the ventures’ capacity to obtain “buy-in” from other key players in affordable and sustainable housing, eventually shaping the ventures’ speed to try and even sell new products to housing projects.
If the investment opportunities are related to housing projects, investors need to further assess the projects for
- Impact on the local community – this includes the developer’s capacity to meet the local community’ needs, affordability in the local community context, and support for local community development.
- Their management quality – this will affect the local community’s perception of the developers for their commitment to support affordable and sustainable through providing high-quality, but affordable living spaces for local residents.
So, what are the options in Hong Kong?
In this blog, we would like to introduce 2 of our affordable and sustainable housing impact ventures.
The first one is Ampd Energy. To address emissions in the construction industry, Ampd offers battery energy storage system (BESS) to replace the dirty, noisy and hazardous diesel generators. Being quieter than diesel generators, BESS reduces noise pollution and allows construction works to be compelted during noise-senstitive hours. The software-hardware integration allows uers to check their BESS performance on real-time. Ampd currently works with leading property developers such as Gammon, Swire Properties and Henderson Land Development.
The second one is CLS Environmental Technologies. With cement being accounted for 8% of the world’s carbon dioxide emissions, CLS aims to facilitate the construction industry for reducing carbon dioxide emissions through biochar building materials. CLS collects woody water such as bamboo scraps and wooden pallets from construction sites and converts them back to construction materials. CLS believes that biochar building materials can deliver environmentally-friendly solutions to construction companies since replacing 1% of cement with biochar will be equivalent to growing hundreds of thousands of trees. Last year, CLS collaborated with Hip Hing Construction from New World Development to pilot biochar construction materials in the new public housing estate at Queen’s Hill (皇后山).
It collects woody waste such as bamboo scraps and wooden pallets from construction sites and convert them back to construction materials. Our goal with our construction materials project is to create circular material solutions for the construction industry. Cement is a carbon-intensive material. Cement is the source of about 8% of the world’s carbon dioxide emissions. If we can replace 1% of cement with biochar, it will be equivalent to growing hundred of thousands of trees.
Affordable and sustainable housing is more just a room for people to live with dignity. Affordable and sustainable housing is also about how people can be housed in a liveable, sustainable, and affordable environment. Please email us if you are interested in exploring investment opportunities in affordable and sustainable housing.