Calls for more subsidised housing won't resolve woes
Jake van der Kamp
The next chief executive should provide more subsidised housing for people from grass roots and stop favouring property developers. That is the consensus shared by...
SCMP, March 19
Shared by all righteous citizens as prescribed for them in the Manifesto of Politically Correct Thought. I don't share these sentiments.
For starters, we have that slippery term 'grass roots'. It is meant to refer to spontaneous political movements that arise at the local community level but, as used here, it hints at a social exclusion.
Some people are authentic real people and other people are not, not really anyway.
If the term is taken to mean anything more than 'poor', it is a weasel way of denying equality.
Then we have the blithe assumption that our present and past chief executives favoured property developers. It may have been true on the odd occasion, but we would long ago have had open rebellion in the Lands Department if it were consistently so.
Our bureaucrats do not operate that way. When selling public land or negotiating lease conversion premiums they get us the best price they can and are given a free hand to do it by senior levels of government.
It is a tricky job, however, because they are expected not only to maximise revenues but also to ensure that land supply is not choked. These two objectives are not always compatible and the balance is a particularly difficult one to achieve at the moment.
Their problem is an old colonial system of land development, which was devised in London more than 200 years ago and was always more suitable to other British colonies.
Developers frequently have the upper hand as they have the better control of timing and as the very large lump sum payments involved allow only a handful of serious players.
This is a weakness of the system but it does not constitute collusion.
I also question the assumption that more subsidised housing will solve our housing difficulties, although it is a notion shared by all of our past, present and prospective chief executives.
In his last policy address, for instance, Donald admitted that we have 2.6 million residential units for 2.35 million households, which implies 250,000 vacant flats.
Why he should think that building more vacant flats will solve anything is a mystery but, oh well, that's Donald.
Our problem in housing is not a shortage of homes but high housing prices. They are high because the world's key central banks continue to cheat savers by pushing down interest rates to artificially low levels in order to support profligate governments and stimulate economies that actually need a rest, not a boost.
There is nothing we can do about this but sit it out.
What I question most of all, however, is the assumption that housing subsidies will benefit people in straitened circumstances across our entire society.
The revived Home Ownership Scheme will provide no widespread relief. It is a lottery, not a broad social measure. There is no way that the scheme can provide more than a few thousand flats a year and it will not begin to do so anyway for a number of years. You are better off playing the Mark 6.
It is very like the Mark 6 for another reason. It contributes to poverty. Almost all the money comes from poor people dreaming impossible dreams and the money that goes back to them is always less than the money that came from them.
The Manifesto of Politically Correct Thought is generally dishonest when it encounters this uncomfortable truth. It resorts to proclaiming that the rich should be made to pay for the difficulties of the poor and then proceeds on the basis that this will in fact be done.
But it never is. The rich can always escape. Leaving aside that they can take their money elsewhere, their income is determined by the prevailing yield on financial assets in the economy in which they operate.
Take their money through tax and they will just take it back from you through higher rent on the economy's resources. They don't have to do it deliberately. It happens automatically.
The truth of the matter is that the bottom stones of the pyramid always carry the greatest weight. Saying it shouldn't be so won't change nature.