How to build more affordable housing in Hong Kong: just give developers a financial incentive
Bernard Chan says the government can strike a deal with private developers to unlock land in the New Territories in an open and transparent manner that benefits Hongkongers
The problem is that nearly every single option is likely to face some sort of objection or opposition. The really large-scale proposals often attract the biggest resistance.
In many cases, I believe the opposition is to some extent valid.
But if we carry on saying “no”, we end up getting nowhere.
In essence, the government would provide the necessary infrastructure and reduce the usual land premiums, and in return the developers would include some social housing. This principle is used in many countries.
In other words, people automatically assume that the government would deliberately favour the developers in any sort of arrangement. At the very least, people assume that the developers will outsmart officials. Either way, there are widespread suspicions that the developers will grab all the benefits and the public will lose out.
Yet, without cooperation between public authorities and private landowners, the land will sit idle and benefit no one.
It was not always like this.
The basic equation is that the private sector is allowed to make a fair profit out of satisfying a social need. This is, by the way, management guru Peter Drucker’s definition of the role of business.
It should not be difficult to devise a formula that gives landowners a financial incentive to build affordable homes.
I expect my own opinions here will be criticised for being pro-developer and pro-collusion. At least, some people will accuse me of being naive for thinking the developers will play along.
The developers are not popular these days, and many people want the government to use its “big sword” and acquire the land through the compulsory land resumption process.
This private-public approach could be the most practical and effective of all the task force’s options. Yet politicians from different parties, activists and it seems much of the public are clearly sceptical – and it looks like once again we are saying “no”.
The word “collusion” implies secrecy and unfairness. Surely we can find a process that is open and accountable – and that clears the way to badly needed large-scale housing supply.
Bernard Chan is convenor of Hong Kong’s Executive Council