Cost effectiveness of property management of public rental housing in Hong Kong

Abstract

As at March of 2014, there are over 168 public housing estates and 766,300 public rental housing flats under the Hong Kong Housing Authority portfolio, it accommodating a total of more than two million people. The estate management and maintenance services are important for government to maintain social cohesion.

Housing Department started to outsource property management of public rental housing to property services agents on 1 October 2000 by tender out. After 13 years run for the program, there are about 100 estates (60%) of public rental housing managed by property services agents. Recently, there is criticized that Housing Department outsource too many estates, it should be in-source the management back to itself. It is a chance to review the cost effectiveness and efficiency of outsourcing.

This paper is trying to analyze and evaluate the outsourcing of property management of public rental housing in Hong Kong. A comparison on the services performance of public rental housing estates’ tenants by the property services agents and Housing Department. Also secondary data will be used to evaluate the cost effectiveness by outsource the estate management and maintenance services. The objective is achieved by using tenant’s survey. Result from this analysis show that the performance of property services agent provide a better services than Housing Department. It is no doubt that the performance of them is satisfactory and they are more cost effective. However, it does not imply that their services are far better than Housing Department, especially in repair and maintenance aspects. Recommendations are then made to help to review the problems of outsourcing and how to solve it. It is hope the finding can give the direction to Housing Department to use which management mode in new developed estate.