Leung's loony logic on HK housing

Michael Chugani says Leung can't fool Hong Kong with his spin on how to make housing affordable - without lowering prices

PUBLISHED : Monday, 27 August, 2012, 12:00am
UPDATED : Monday, 27 August, 2012, 6:51am

About half of Hongkongers live in public housing or government-subsidised homes. Let's leave this half out of the equation. The rest either own flats or are at the mercy of landlords. Let's split this other half into the "haves" and the "have-nots". The "haves" are a happy bunch. Every time Hong Kong's insane property market gets even crazier - and it does that all the time - the "haves" feel richer, at least on paper.

Our property tycoons - who are among the richest people on earth - don't just feel richer on paper. They feel it in their pockets. They love the lunacy of the market because it fattens already bulging wallets. Together, the tycoons and the "haves" have a powerful hold on the government. That is why our leaders daren't do anything meaningful to bring sanity back to the market.

Looking on are the "have-nots". They are a bitter bunch. They pay rip-off rents for shoe-box flats, subdivided slum cubicles and caged bed spaces. Their dream is to one day join the "haves" even though that means swapping rip-off rents for mortgages, a burden which they would have to carry for much of their working lives. Still, they don't mind because they could at least get rich on paper. But the market's lunacy makes theirs a fool's dream.

Enter Leung Chun-ying, who promised to turn dream into reality if elected chief executive. He talked the talk of a leader who would tame the tycoons and flood the market with new thinking that would help the "have-nots" become "haves". At least that was the impression he gave. Leung has realised his own dream to become leader. The "have-nots" are still waiting for him to deliver theirs.

It's going to be a long wait. Leung's talk has turned since being elected. It is now the talk of a wary leader who's putting a different spin on the things he had said. There'll be no taming of the tycoons. The spin is that he never actually said he would. What about the flats he said would be built for Hongkongers only so they wouldn't have to compete with mainlanders? Leung's spin is he had indeed promised such flats but the market is not crazy enough yet for that. Not crazy enough? Tell that to the "have-nots".

The spin that the "have-nots" find most dizzying is Leung's logic that he can make the market affordable without first making it cheaper. They feel they've been had. But the "have-nots" are, of course, not uppermost in Leung's mind. It is the tycoons and the "haves". Not daring to pick a fight with them, his post-election mantra is that he has no intention of forcing down prices to make the market affordable.

Where does that leave the "have-nots"? Nowhere, actually. Leung's logic of delivering their dream without driving down prices rests on boosting land supply and subsidised housing. But once he made clear he won't tangle with the tycoons, the market got loonier still. Even subsidised home prices surged.

More land for more homes would take years. The "have-nots" could wait patiently to see if that would create the miracle of a market becoming affordable without prices dropping. Or they could wait for a market crash. But, to be more realistic, they might want to forget about becoming a "have".

Michael Chugani is a columnist and TV show host. mickchug@gmail.com