Hong Kong’s housing crisis is driven by lack of political will, not a land shortage

The situation has reached such a dire state that the government must stop dodging tough issues and put all options on the table
With the legislature now rid of filibustering democrats, there’s no better time to take bold action

Regina Ip

Published: 6:45am, 15 Aug 2021

Why you can trust SCMP

Hong Kong is well known for its world-leading home prices and land shortage. Yet, augmenting land supply in a big enough way to give people hope about the availability of decent, affordable homes has been a difficult task which has eluded Hong Kong’s most recent chief executives Leung Chun-ying and Carrie Lam Cheng Yuet-ngor.

Flash back to 2002, when chief executive Donald Tsang Yam-kuen was preoccupied with precisely the opposite. To shore up the ailing property sector, Tsang suspended land sales by auction. The hiatus in land production resulted in a severe shortage when the economy bounced back.

When Leung took over in 2012, land and housing were in such short supply that he faced a red-hot property market. Leung introduced a series of additional stamp duties on property transactions to cool the market.

In the absence of large-scale land supply, the waiting time for public rental housing for ordinary families has lengthened to 5.8 years, despite the Housing Authority’s pledge of three years. Altogether, about a quarter of a million people are on the waiting list.

Lam started her tenure by setting up a task force on land supply, even though she was well versed with the available options as a former secretary for development. She cannot be faulted for hoping to secure public support for a preferred option after a community-wide consultation.

02:43

Why Carrie Lam’s Lantau land reclamation plan is so controversial

Despite her best efforts, her mega-project Lantau Tomorrow Vision – which promises to deliver at least 1,000 hectares of reclaimed land east of Lantau Island – could not escape a chorus of opposing voices from environmentalists, legislators and ordinary citizens. Opponents were concerned about splashing out at least HK$624 billion (US$80.2 billion) on a long-term infrastructure project.

In December 2020, the government secured the Legislative Council’s approval for HK$550 million to undertake a feasibility study of large-scale reclamation off Lantau Island. The study is expected to take about 3½ years.

Even if the study and reclamation are completed on time, it would still take years before any new large-scale development with the necessary transport links in place could come on stream.

The difficulty involved in providing long-term public housing has forced the government to resort to “transitional housing” to provide speedier relief to those living in the most abject conditions, such as squalid subdivided units at exorbitant prices. The government estimates there are over 200,000 people living in more than 100,000 such units.

Hong Kong’s land and housing struggles have been noted by mainland officials at senior levels. Yet, any newcomer visiting the New Territories would respond with disbelief to any suggestion that Hong Kong is short of land.

04:11

Tiny 290sq ft temporary housing a welcome upgrade for some low-income Hong Kong families

On the face of it, abundant, undeveloped land appears to lie fallow or is being used for purposes which do not fully utilise its developmental potential.

There are good reasons for leaving large tracts undeveloped. However, it is not easy to explain to anyone keen to resolve the housing issues why only 20 per cent of Hong Kong’s land has been developed for well-planned urban usage, including only 7 per cent for housing, with about 40 per cent dedicated to country parks.

Many retired government officials who used to be in charge of land and planning remain of the view that country parks belong to the Hong Kong people, implying that they should be left untouched. Any sensible Hongkonger is unlikely to advocate dismantling the country parks.

Particularly in times of Covid-19, more Hongkongers are hiking in country parks to exercise and enjoy the beauty of nature. Moreover, country parks include hilly terrain and water catchment areas for which redevelopment would be either too costly or impractical.

10:02

Hiking Hong Kong’s MacLehose Trail

Concerns about preserving country parks, wetlands, green belt land, coastal protection areas, conservation areas and sites of special scientific interest should not, however, prevent the government from putting all options on the table.

Hong Kong’s housing crisis has reached such a dire state that the government should stop dodging tough land and housing issues.

Here are some options which would release large amounts of new land, if the government was willing to bite the bullet and introduce the necessary legislative and procedural reforms.

As the Heung Yee Kuk suggested last week, the government could amend the New Territories Ordinance to enable 7,200 plots of “tso tong” land – village plots held in the name of a clan, family or other traditional organisation – totalling 2,400 hectares (5,900 acres) in the New Territories to be utilised for development.

The government should review the possibility of using some land in the buffer area of wetlands as well as land in country parks in the vicinity of urban areas for housing development. Officials should also stop dragging their feet on the redevelopment of the River Trade Terminal in Tuen Mun, which occupies 65 hectares, given the steady decline of river trade.

More importantly, the government should give serious thought to relocating the container ports at Kwai Tsing to a suitably located island. Options include Cheung Chau South, as suggested by Our Hong Kong Foundation, or Guishan Island in Zhuhai, subject to the agreement of the mainland authorities. Relocation of the ports could free up about 400 hectares of conveniently located, harbourfront land for residential use.

Above all, achieving a breakthrough in land supply requires the government to take daring measures to revise or introduce new legislation to cut back lengthy planning and other procedures that hold up land production. With the legislature being rid of filibustering democrats, the time is right for the government to take bold action.

Regina Ip Lau Suk-yee is a lawmaker and chairwoman of the New People’s Party