The housing blues in Hong Kong
Updated: 2012-11-14 14:51
By Joseph Li from Hong Kong (China Daily)
Hong Kong faces a critical housing shortage, exacerbated by rising property prices out of reach of most citizens, and rents following suit. The government is devising a long term housing strategy, or LTHS, aimed at ensuring optimal use of existing land and housing resources, in the hope of solving this problem in the near, medium and long term.
Hong Kong is devising a long term housing strategy, aimed at ensuring optimal use of existing land and housing resources, in the hope of solving this problem in the near, medium and long term.
After collecting the relevant data, it will project demand for both public and private housing to meet the needs of various groups. Joseph Li has spoken to people familiar with housing issues, including the LTHS Steering Committee members Eddie Hui, PC Lau and Wong Kwun to share their insights.
Chairman, The Federation of HK, Kln, and NT Public Housing Estates & Shopowner Organization.
Housing has been one of the most serious quality of life problems in Hong Kong for decades and sometimes it's a political problem.
The root cause is very simple: inadequate housing supply of both public and private housing units, while the insufficient supply of private housing has prompted property prices to surge.
At present, there are a record high of nearly 200,000 households applying for public rental housing. The situation reflects the economic downturn and escalating property prices beyond the affordability of many citizens. Besides, decreased construction of public rental units and the relaxation of income/asset limits have also prompted the increase of applicants for public housing.
When Donald Tsang was still chief secretary in 2002, he suspended construction of flats under the Home Ownership Scheme (HOS) until he announced in 2011, as Chief Executive, the resumption of the scheme. So supply of subsidized housing was stopped for many years.
Again, the sites originally designed for HOS flats were not returned to the Housing Authority for building rental units. After some old public housing estates were demolished, the sites were sold to the property developers to build luxury flats.
I think the government of that era was indulging in wishful thinking that the developers would build more low-priced, small and medium-sized flats. In my view, suspension of the HOS flats was a means to "prop up the property market", so was the decision to allow developers to apply for sites from the land reserve list, in lieu of regular land auctions.
In fact, some developers have plenty of sites in their land banks. They do not build enough flats because they know very well that if housing supply is plentiful, they cannot sell the flats at higher prices.
All in all, Donald Tsang did very little to increase land supply and accordingly, housing supply during his tenure as CE.
I hope the steering committee will estimate the housing demand and devise strategies for the next 10 to 15 years, at the same time announce the number of both public and private housing units to be built, to cope with demand. Also, the terms of reference of the steering committee must include land supply so that it will know if it has enough sites to achieve the construction target.