Why the Hong Kong government’s housing targets are based more on politics than practicalities

Carine Lai says when analysing the figures against the administration’s own population projections, it’s clear that sound urban planning is being sacrificed for political expediency

PUBLISHED : Sunday, 24 January, 2016, 9:30am
UPDATED : Sunday, 24 January, 2016, 9:30am

In his policy address, Chief Executive Leung Chun-ying made housing and land supply a priority. He said the government is pursuing numerous measures to increase land supply, including rezoning green belt and other sites, building or extending new towns in the northern New Territories and on Lantau, using brownfield sites and carrying out reclamation outside the harbour.

These will effect ecology, water quality and urban air ventilation to varying degrees, which means we must ensure housing is planned sustainably. Unfortunately, sound planning is in danger of being sacrificed to speed and ambition. Are such sacrifices warranted?

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Leung said that, in the next five years, 97,100 public housing units will come online, as well as 87,000 private units in the next three to four years. This is part of a long-term target which aims to produce 460,000 new flats by 2025-26. Is this realistic?

Let us review some statistics. In mid-2015, our population was roughly 7.3 million. With an average household size of around 2.9, it translates to 2,485,200 households. Housing stock was 2,668,000 units – a 93 per cent occupancy rate. This is slightly tighter than the 91 per cent rate in 2005, when we had 2,197,100 households to 2,408,000 housing units. So while it is true that the housing supply – public housing especially – has not grown as fast as household numbers, the situation is not exactly dire. We have an affordability problem, not a supply problem.

Now let’s look at some official projections. Last year, the Census and Statistics Department predicted that the population would grow to about 7.8 million by 2024. Due to delayed marriage and low birthrates, the average household size is expected to drop to around 2.8, so we will have 2,699,400 households by 2024, or 214,200 new households. These projections take immigration into account.

So why do we need 460,000 new flats? The target flies in the face of the government’s own population projections. Either the migration estimates are wildly off, and we are about to be flooded with immigrants, or our average household size will fall to 2.5 in the next 10 years, to the level currently seen in Japan. It should be noted that the Census and Statistics Department has a history of overestimating population growth. It seems unlikely that it has suddenly swung the other way.

The implication is that 460,000 is not a serious target anchored in reality, but was devised to fulfil political goals such as quieting critics, stoking market expectations and justifying overambitious development plans. Next time you hear officials portraying proper environmental impact assessment as an obstacle to decent housing for all residents, remember these figures. At least half are hot air.

Carine Lai is project manager at Civic Exchange