Cheaper flats? We can do that, say developers
Surprise statement to government comes amid plans for 10pc increase in affordable housing
Contrary to popular opinion, developers in Hong Kong are interested in building affordable flats - if incentives are given, according to a statement from the Real Estate Developers Association yesterday.
Analysts said the assertion from the group, which represents the city's major developers, appeared to be the result of a planned 10 per cent increase in affordable housing - including public rental units and subsidised units - proposed by the government's long-term housing strategy steering committee. Such housing currently accounts for 50 per cent of the city's homes.
"The administration should explore giving incentives to the private sector to include affordable units [as defined by the government] in their developments, as is the practice in London," the association said in a 15-page submission sent to the government on Monday, the last day of public consultation on the issue.
"Involvement of the private sector allows a diversity of location and the potential for far greater social and economic integration," it said.
The statement added that government-subsidised housing in remote areas like Tin Shui Wai left residents removed from jobs and services.
It did not specify what incentives for developers in the British capital were being referred to.
The association, however, warned that an excessive supply of cheaper housing would affect the middle class as their flats' value would drop significantly.
Dr Lawrence Poon Wing-cheung, real estate specialist at City University, said developers could be able to supply higher-quality affordable housing at a faster rate than the government. He suggested developers could ask to pay lower land premiums as mixing affordable flats with "normal flats" would undermine estate values as a whole.
Real estate professor at the University of Hong Kong, Chau Kwong-wing, said developers may want to profit from the expanding subsidised housing market, but the mixed model was not a good idea.
"The government should maximise land value as land resources are precious. At the same time, it can designate urban sites for affordable flats or improve infrastructure of remote sites."
Chau noted good quality, affordable flats had been built in the past when developers acted as a government contractor.
The association also suggested increasing residential land supply by rezoning mixed-use sites which have lain idle for years; re-examining the transfer of development rights; and encouraging live/work apartments.
Instead of setting up a licensing system for subdivided flats, it said the government could give out rental vouchers to low-income tenants which could only be used for units complying with building rules.