Can anyone get through to Carrie Lam?

A public forum on the plan to develop 787 hectares of land descended into chaos on Saturday as 6,000 people turned up, many to protest. But Chief Secretary Carrie Lam Cheng Yuet-ngor said the development was needed to meet the city's housing needs.

SCMP, September 24

Will someone do me a favour? Will someone please tell Carrie Lam that Hong Kong has 2.6 million homes for 2.35 million households, which means that about 250,000 flats in this town are vacant.

The way to meet Hong Kong's housing needs is to make proper use of flats already built, not to build more flats that cross-border speculators will then buy and keep empty on the reasoning that an empty flat fetches a higher resale price than an occupied one.

You would have thought that bureaucrats who make pronouncements on housing might a least do a few minutes' research on the basic facts, but members of the Leung administration do things backwards. First they start with a policy. Then they retract it. Then they hold a public consultation on it. Then they think a bit about what the policy should be. I'm not sure about the thinking bit.

Here is another possible explanation for why the government is so eager to build more new towns. We start with Article 161 of the Basic Law, which states that the government may make no decision affecting the New Territories unless it has first paid off the Heung Yee Kuk.

This article was breached when a cabal of cross-border political heavies quietly bought 87 hectares of contaminated mud on the Shenzhen River, transferred it to the Hong Kong administration after redirecting the flow of the Shenzhen River north of it, and then announced big development plans for it. The Kuk never got a look-see.

I put it to Ms Lam that the latest new town proposal is a compensation pay-off to the Kuk for being cut out of the Lok Ma Chau Loop. The Kuk will block the Loop project until it gets its pay-off, and the Loop project absolutely must go ahead. Article 162 of the Basic Law says Hong Kong must always defer to the wishes of Guangdong political heavies.

Thus, let us ignore this latest new town proposal as having very little to do with finding decent housing for bona fide Hong Kong residents who may legitimately expect more than the squalor in which illegal immigrants live. The question at hand is how to get occupants into those 250,000 empty flats. How do we make the speculator owners sell or lease them?

And I have the answer to that question. What we shall do is institute a land development tax, an annual levy based on the market value of the floor area of each and every property if developed to the full extent that its lease allows.

It would be nice if we could make this tax apply only to unoccupied property, but there would be too many ways to cheat on that provision. We shall have to make it apply to all property, but we would include commercial and industrial as well as residential.

It would serve several objectives. In the first place it would sting non-resident speculators and start to induce them to lease or sell up, thus making more flats available.

It would also push developers to build on their land banks as soon as possible rather than waiting years for better prices, as is so often the case now. Every year they wait, they would be stung again. Their empty lots would be taxed as fully developed property.

In addition, it would serve the government as a finely balanced tool of urban planning. The lease conditions established by government would closely determine where incentives are greatest for private development.

And, finally, a land development tax fully extended to all classes of property and stiff enough to have an effect on development policies could easily bring in as much as the salaries tax, which at present accounts for less than 12 per cent of fiscal revenues. Ours could be the first government in the world in a position to abolish personal income taxes. The whole world would sit up and take notice.

But it won't happen. The new town will be built and do nil to ease housing distress. Carrie Lam will then come up with yet more ideas that no one has thought out, no one wants and that will do us no good. Can anyone get through to her?

jake.vanderkamp@scmp.com