Public Housing and Household Savings—A Three-Decade Repeated Cross-Sectional Analysis

Housing affordability is a major determinant of quality of life. Despite the relatively high GDP per capita in Hong Kong (HK) (USD 460,000), about one-third of the population lives in public rental housing (PRH) because they cannot afford private housing. Existing research estimating the benefits of PRH or direct housing supports faces methodological limitations. Addressing this research gap, our study adopts an “in-kind subsidy” approach to estimate the monetary value of PRH, quantifying how much less PRH households might save monthly if they resided in private rental units, after controlling for confounding factors. This paper examines the association of housing types and household savings by applying ordinary least squares (OLS) regression to compare savings among PRH tenants, non-PRH tenants, and mortgage-free homeowners, based on seven rounds of the Household Expenditure Survey data (1989/1990 to 2019/2020). PRH tenants saved significantly more than private housing tenants. In terms of household savings, the value of HK PRH has steadily increased from HKD 4483 in 1999/2000, to HKD 9187 in 2019/2020. For every dollar increase in income, a household would have the propensity to save 0.7 dollars in 2019/2020. Given limited public resources, our findings offer robust evidence regarding the value of public housing. The results underscore the importance of the equitable allocation and effective management of current PRH stock to enhance the upward mobility of low- to middle-income households amid limited housing resources in HK.