MonitorTom Holland looks at why a plan to give HK people homes won't work
A closer inspection of CY Leung's plans to make property more affordable for local people reveals that it is simply a cosmetic gesture
The Hong Kong homes for Hong Kong people initiative announced last week by Chief Executive CY Leung will make zero material difference either to the affordability or to the availability of housing in the city.
To see why, let's do a simple back-of-an-envelope estimate.
Let's assume that the companies which buy the sites go ahead and develop them with the maximum permitted plot ratio of 7.5. That means they'll build up to 1.32 million square feet of housing, or around 2,000 flats.
Next, let's assume that that those 2,000 flats are not additional. In other words, that the developers would have built the flats anyway, even without the condition that they can only be sold to Hong Kongers - a reasonable enough assumption considering the sites were already on the government's land sale list.
Finally let's assume that currently 20 per cent of all new flats sold in Hong Kong are bought by non-residents. That sounds high - no one knows the true proportion - but it gives us a number to work with.