Time to change overall housing and land supply policies
There are many facets to the current debate on runaway property prices and the government's role in balancing housing demand and supply.
One positive aspect of the high property prices in Hong Kong is that they contribute to a low income tax base and savings in home equities. This is better than most Western countries where one has to pay 30 to 40 per cent income tax plus capital gains tax, even if housing costs are lower.
However, a responsible government should also ensure that the majority of its people can have decent housing at affordable prices and rents.
The current balance of approximately 50 per cent of public rental and subsidised housing in Hong Kong is a good mix, but the government's overall housing and land supply policies must be changed. I have a number of suggestions for a housing strategy that would reflect social responsibility and aim for a better environment.
Land should not be auctioned to the highest bidder.
A balance must be struck between design and tendered prices.
There is a feasible public land sales option which is used in some cities.
Prospective developers are required to submit their design and planned amenities (based on the same plot ratio) and separate tender prices.
The submitted designs are first judged on their planning and design merits and social amenities.
The best design will be awarded the land if its tendered price is also the highest, and if not, on the average of the three highest tendered prices as a reflection of the market values.
The government could open up part of the sizable green belt zones (not country parks) which account for a substantial part of the total land area. These areas could then be used for low-density developments.
Currently only about 22 per cent of land in Hong Kong (1,108 square kilometres) comprises urbanised built-up areas and, like most other world cities, low-density housing in the foothills should be considered if only as a form of additional land supply.
We could have a regressive capital gains tax on short-term turnovers of speculative properties.
Housing for middle-income groups could be supplied through semi-government agencies or joint ventures with private developers at pre-set price ranges, which could be on a percentage of market price basis.
A clearer policy is needed on the eligibility and prices and rentals of public housing, and commercial property, where high rentals are the major business expense and minimum wages are only secondary.
We need to ensure Hong Kong becomes a more equitable and competitive international city.
Ho Chi-wing, Central