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Navigating the political landscape

Both contenders for the city's top job have raised the public's hopes by promising public flats, affordable housing and a land bank. But neither is big on detail when it comes to the big picture of ensuring there is enough affordable housing in Hong Kong.

Chief Executive Donald Tsang Yam-kuen, who will step down in June, spelled out six options for increasing land supply in his policy address in October, but analysts say none of them are easy. The six options are also seen as ad hoc measures rather than part of a comprehensive policy to ease the pressure for more affordable flats.

The next chief executive will have to overcome many economic and political hurdles to increase land supply. He will also be advised to look into the nature of the problem: how large is the housing need?

Housing proposals floated by Henry Tang Ying-yen and Leung Chun-ying, the only two candidates with any realistic hope of winning the Election Committee's vote, share a common theme: more public flats and subsidised flats in various forms.

Under existing policy, 75,000 public flats will be built in the next five years, an average of 15,000 a year.

Tang suggests increasing the annual number to 20,000 so as to shorten the waiting time. He also says eligible young people should be given a 100-square-foot flat.

He has also called for more subsidised housing but has not set a target. 'The next administration needs new thinking to increase land supply,' Tang said.

In a reply to queries by the South China Morning Post, Tang's spokeswoman said that he considered reclamation a feasible option to increase land supply.

Other proposals considered by Tang include asking the Urban Renewal Authority to resume industrial land for other uses and constructing multi-storey buildings to cater for villagers' demands.

Leung released the draft of his land policy this week. He proposed increasing the first-year provision of public flats from 15,000 to 35,000 and reviving 'sandwich-class housing' - for people too wealthy to qualify for public housing but who struggle to rent a private flat.

Leung did not specify what land would be made available for sandwich-class housing but he is confident of finding small, government-owned sites on the urban fringe to build public flats for single people over 35.

He advocated increasing land supply by establishing new towns in the New Territories, developing a border area of 2,800 hectares just to the south of Shenzhen, reusing 160 hectares of abandoned quarries and reclaiming land in Lantau north and Tsuen Wan.

Leung also suggests limiting the sale of new flats to Hong Kong residents, with critics saying it could tarnish Hong Kong's reputation as a free economy.

The establishment of a land bank, pledged by both candidates, is not a new idea.

Despite housing experts long advocating such a bank, the idea was only raised in Tsang's last policy address in the face of public pressure to curb flat prices.

Tsang announced six ways to provide land for the reserve, including reclaiming land outside the harbour, releasing industrial land and using rock caverns, green belt areas, under-utilised government sites and agricultural land now being used for storage.

He did not say how much land would be released in each of the categories. While no target has been set for the size of the land bank, it is also unclear how the extra land would be used.

'Our aim is to ensure an annual supply of land for an average of about 40,000 residential units of various types,' he said. He did not say if the reserve would be used for other purposes, such as commercial and industrial developments.

'All proposed measures are technically feasible. But how far they can be delivered is another question,' said Chau Kwong-wing, chair professor of the Department of Real Estate and Construction at the University of Hong Kong.

He said that while proposals such as reclamation and rock caverns were costly, resuming land in the New Territories and developing green belt areas could be very political.

'Can the government convince green groups to give up part of green areas for housing? Reclamation would also destroy some ecologically sensitive spots,' Chau said, adding that lobbying would be difficult as green activists would protect the natural landscape at all costs.

He said changing land use had become a daunting task for the government as people were increasingly aware of their rights to object to government proposals during the town planning process.

In fact, green groups have already expressed their grave concerns after the Development Bureau asked the community to choose 10 sites out of the 25 proposed this week for reclamation.

The largest one, south of Cheung Chau, would involve reclaiming 1,500 hectares - bigger than the land reclaimed at Chek Lap Kok on Lantau for the airport.

According to the Civil Engineering and Development Department, the increase in the city's population from 7.1 million to 8.9 million by 2039 will require a further 4,500 hectares of land to fulfil housing needs. At present, only 3,040 hectares are readily available.

But the reliability of these figures is in doubt as the city lacks a population policy and the government has not studied housing needs for more than 15 years.

Environmentalists criticise the government for taking the easy way out instead of using undeveloped land, saying reclaiming land would threaten marine life.

The bureau said it was seeking new ways to increase supply as other measures had become more difficult to implement.

For example, land resumption may cause local resentment as residents often prefer to retain their rural lifestyle and are dissatisfied with their compensation.

But the president of the Hong Kong Institute of Planners, Peter Cookson Smith, warned that blindly increasing land supply was not a solution. 'Without a direction, we could fall into a trap of building unnecessarily,' he said, urging the government to conduct a study on housing needs.

'The government should look at the nature of the problem. Otherwise, it will repeatedly create sporadic developments in rural areas,' said Smith, an experienced town planner who helped design new towns in the New Territories.

Daniel Lam Chun, a non-executive director of the Urban Renewal Authority, who has vast experience in planning residential developments along railway lines, said the government was not adopting a systematic approach to identifying housing needs and suitable development sites. 'The land search process seems to be based on convenience but not research,' he said.

'Are we really facing a land shortage? Without a reliable study on housing demand, we don't know how much land we need,' Lam said.

The Central Policy Unit, which advises the chief executive, said it did not study land policy. The latest research covering land demand, the HK2030 study, was completed by the Planning Department in 2007.

Former planning official Tam Po-yiu said it would take a lot of thought to convert land for housing use.

While converting open storage into housing sites, the government should consider providing relocation help to avoid harming the logistics industry. A certain amount of industrial land should also be reserved for the development of creative industries.

Having said that, it would be impossible to determine the land supply without a clear population policy, Tam said.

The endless demand for land to build small village houses in the New Territories has made the land search an even more daunting task. But the small-house policy, which allows male indigenous villagers to build a three-story village house, has been left untouched by the two chief executive candidates. While Tang does not concur with the call for abolishing the policy, Leung, who has yet to secure votes from rural representatives, said he would 'settle' the matter if he won the top job.

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Buying a home in Hong Kong takes this many times the average salary, outpacing London and New York, says consulting firm Demographia

Land in the bank?

Ways to free up land, as proposed in the policy address

1. Release about 60 hectares of inactive industrial land (in east Tsuen Wan, Fo Tan, Siu Lek Yuen, Fanling Area 48, Tuen Mun Area 9, Yuen Long and Tai Kok Tsui)

2. Reclaim land outside Victoria Harbour (25 sites proposed)

3. Relocate public facilities on pieces of land over 100 hectares to rock caverns and use the land for housing (in Lam Tei in Tuen Mun, Shek Mun in Sha Tin, Siu Ho Wan on Lantau, Mount Davis and Lion Rock)

4. Convert green belt areas of 50 hectares with no vegetation into housing sites (15 sites in Sha Tin, Tai Po, Tuen Mun, Yuen Long, Sai Kung and North District)

5. Redevelop underused government sites

6. Use agricultural land of 150 hectares that is deserted or used for storage or industrial purposes (in south Yuen Long, south Kwu Tung, Fanling, Sheung Shui and Kong Nga Po)

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