No More Illegal Subdivided Units? A Game-Theoretical Explanation of the Failure of Building Control in Hong Kong

Safety has long been regarded as one of the most important functional requirements of buildings. However, building safety in Hong Kong has long been jeopardised by the proliferation of unauthorised building works (UBWs), which are essentially works constructed without any prior approval or consent of the government. Due to the acute problem of housing supply–demand imbalance, the numbers of illegal subdivided units (ISUs) in the city have been increasing since the early 2010s, frequently resulting in injuries and deaths amongst the residents. It is therefore a matter of urgency for the government to tackle the problem. Speculative property owners construct ISUs in their premises for economic gain so the government needs to enforce rules against the construction of ISUs. Building inspection should be carried out to uncover cases of illegal construction for subsequent enforcement actions. In this article, a game-theoretic model for the strategic control of existing buildings in Hong Kong is developed to illustrate that, when the level of punishment against ISU increases, the less frequent ISU inspections needed by the government will be, and concurrently, the chances of ISU construction by property owners will decrease. The model offers valuable insights into why Hong Kong’s building control system fails to solve the problem of ISU proliferation in the city.