Finally, Hong Kong’s housing policy is being built on solid foundations
Lau Ping Cheung says we should applaud, rather than moan about, the Leung Chun-ying government’s approach during the past three years, which has yielded much progress in tackling supply woes, with more to come
Unsurprisingly, Chief Executive Leung Chun-ying placed a heavy emphasis on housing in his fourth policy address. And, just as unsurprisingly, many are still pointing their fingers at him for the high property prices during his time in office, resulting in an endless wait for a proper home among the grass roots, and an ever-increasing number of people living in subdivided flats.
Acknowledging that the housing issue has been plaguing the city for decades, Leung said that “exorbitant property prices, high rentals, small living spaces, the proliferation of subdivided flats and record high [public rental housing] applications all tell us clearly that we must tackle the housing problem with resolve and perseverance.”
Yet, those moaning about such issues may be missing the point: while prices remain high, there has been a palpable increase in housing and land supply, as Leung mentioned in his address. Prices and rents have also gradually dropped, thanks partly to economic uncertainty, which defies the conventional view that the only way for Hong Kong property prices is up.
These ostensibly subtle changes are precisely what proves the resolve of the government in tackling the problem. The truth is that Leung has, since his inauguration, been leading a strategy for short-, medium- and long-term housing policies – the Development Bureau and Transport and Housing Bureau have been working hand in hand to increase land supply, and the result is the increase in housing.
In the coming five years, some 97,100 public housing units will be built, among which 20,400 will be subsidised flats for sale. Meanwhile, an estimated 87,000 private housing units will be built in the next three to four years, marking a high since September 2004. It is fair to say that positive results are evidence, after three years, of the efforts by the government.
The government has also put a strong focus on building a progressive housing ladder. In last year’s policy address, Leung endorsed a pilot “green form” subsidised home ownership scheme, designed to enable sitting public housing tenants to purchase newly built public flats offered at half the market price. Under this new initiative, 860 flats will be offered in the second half of the year, with “green form” applicants given priority. This will not compromise the supply of public rental units as successful tenants will vacate their original units, thus helping to clear the backlog of public rental housing applications, and helping to alleviate poverty.
In terms of mid- and long-term development, the government has resolved to increase land supply, not least by building a land bank , while pushing for further development of Northeast New Territories and North Lantau, reclamation work outside Victoria Harbour, as well as relocating public facilities underground.
The Kwu Tung North and Fanling North new development areas, Tung Chung new town extension, Hung Shui Kiu new development area, and the development of Yuen Long South are expected to yield 197,000 new residential units, and 80 hectares in Tseung Kwan O may add a further 20,000.
The government has been so proactive in changing land use for housing it has already identified 150 sites with the potential for 210,000 flats. And, in the past two years, it has submitted proposals to the Town Planning Board to amend the statutory plans of 63 of these sites. As a result, 74,400 housing units are expected to be built – 42,500 public flats and 31,900 private units.
The Leung administration’s efforts to find land for housing is no mean feat when one considers that real estate in Hong Kong involves huge vested interests, and that it takes a lot of political will to launch demand-side measures to stabilise the property market and curb speculation, in order to tackle the debilitating housing problem, in the course of which these interests have been hurt.
But housing is not the only reason the government is actively looking for land: Kwu Tung North and Fanling North new development areas, Tung Chung new town extension, Hung Shui Kiu new development area and Yuen Long South are all earmarked for commercial and industrial use as well, with an estimated 85 million square feet of space being supplied, creating around 240,000 jobs and new opportunities in the New Territories.
Moreover, industry expects the redevelopment projects of the Murray Road multi-storey car park building, Queensway Plaza and government land at Caroline Hill Road, Causeway Bay, to yield almost 1.5 million extra square feet of space.
According to a report on global office rentals last year, Hong Kong has Asia’s most expensive rent for Grade A offices, which is also the world’s second-most expensive. The fact the government is releasing land for business use and turning Kowloon East into a second central business district should help restore competitiveness.
Leung’s resolve and determination to boost land and housing supply, to curb runaway property prices and improve people’s livelihoods, as well as enhance the city’s competitiveness, are unquestionable – he should be hailed as the first chief executive who dares to say “no” to real estate developers.
Lau Ping Cheung is a member of the Economic Development Commission and convenor of its working group on professional services