Only developers will gain from building flats in country parks
Several recent letters have advocated building flats in our country parks to ease the housing shortage.
This misguided policy will not solve the problem, though it will do irrevocable damage to our living environment.
Due to the land auction process, only a select few property developers will be able to bid on country park projects. These developers have shown time and again over many years an adept ability to release flats into the market only when prices are high.
They are willing to warehouse for many years, if necessary, completed projects to avoid putting downward pressure on prices.
This means that country park flats would be no less expensive than those being flogged around town now and will do nothing to address affordability issues.
The only way to make housing more affordable is to break the stranglehold developers have on supply and the timing of property releases.
Furthermore, given that as much as one-third of new housing supply is purchased by speculators who are content to leave the premises empty, flat building in country parks will not produce anywhere near the benefits in terms of unit numbers that have been suggested.
Instead, after the first round of country park flats are sold with little positive impact, your same correspondents will soon be writing again advocating a second round of country park flats building, and so on. The first round will simply be the thin end of the wedge.
The country parks are a public good and developing them mainly for the benefit of the property developers seems perverse. Before resorting to this extreme measure, the government should explore all other options.
These include increasing taxes on developer land banks, changing the land auction mechanism to allow more participants and hence more competition, selling the flats owned by corrupt officials on Beijing's wanted list, and figuring out an efficient way to tax empty flats.
The advantage of any or all of these policies is that they can be reversed if they don't work (or work too well). Contrast this with building flats in the country parks: you can't restore to pristine what you have already bulldozed.
