Principle of Selectivity in Housing Rehabilitation Subsidies: Case Study in Hong Kong

Abstract

Housing subsidies have to be selective given the tight public budget and need for public accountability. Nevertheless, inappropriately chosen screening criteria can result in inefficient resource allocation. This article attempts to empirically justify the selection or eligibility criteria of subsidy schemes for housing rehabilitation in Hong Kong where urban decay has been an age-old problem. It outlines the development of a statistical model designed to identify determinants of the dilapidation level of housing in the city. Based on the results of a dilapidation assessment on 390 multiowned apartment buildings using the Dilapidation Index, the extent to which the residential buildings under investigation were dilapidated was regressed against the eligibility criteria. The results revealed that older and unmanaged buildings were more derelict, with the development scale and rateable value correlated to the dilapidation level. The article concludes with policy considerations and practical implications.