The Housing Authority's budget overseer has disparaged proposals from a government task force for changes to the authority's business model, saying they don't address its social responsibility or practical constraints.
Among other things, the Working Group on Long-Term Fiscal Planning proposed selling off assets, lifting the proportion of for-sale subsidised flats to public rental flats, and borrowing.
But the chairman of the authority's finance committee, Professor Raymond So Wai-man, called the proposals unrealistic.
"The group looked at the financial health of the whole of Hong Kong but they don't understand the HA's difficulties," So said in an interview with the South China Morning Post.
"Theoretically speaking, many things can be done. Yet whether they are practicable is another issue," he said. "In theory, we can go to loan sharks. But is that what we should do?"
As a self-financing statutory body, the authority draws revenue from the sale of Home Ownership Scheme (HOS) flats, rent from public housing, and income from commercial leasing and investment.
But concern has been raised over its financial health as the government embarks on an ambitious home-building programme and construction costs soar.
The authority recently projected that its cash and investment balance would decline from HK$68.1 billion at the end of this month to HK$28.3 billion within four years.
In a more alarming projection, the working group said the authority could accumulate a shortfall of HK$130 billion to HK$490 billion over a 22-year period from 2019/20 to 2041/42.
So said the authority was not ruling out anything yet and would examine the ideas in detail.
But on the asset-sales option he noted that it had no more valuable assets since its shopping malls and car parks were sold off through the Link Reit in 2005.
But even if it did, the social impact had to be considered in light of the real estate investment trust's experience that running shopping malls in public estates on commercial principles could prove controversial.
Chief Executive Leung Chun-ying has announced a target of building an average 20,000 new public rental flats and 8,000 new HOS flats a year.
Experience has shown that the sales revenue from each HOS flat can support two public rental flats, but So said he believed this ratio was unlikely to be sustained.
"Labour costs are skyrocketing and the land available to build public flats is not good," he said. "When you do a slope design, there is much more work involved."
The average cost of building a public rental flat could rise from HK$700,000 to HK$1 million, he warned.
Raising money by increasing the proportion of HOS flats would also be contentious, he said, because a compromise in the number of new rental flats would mean applicants on the long waiting list had to wait even longer.
The borrowing proposal was also questionable as banks would be unwilling to lend given the authority's projected deficits, the academic said.
While the authority might seek a government cash injection, So said the self-financing body would need strong justification for such a request as it would be competing with other uses of public funds.
Asked what should be done, he said the authority would need to complete a thorough study before an answer could be given. It is scheduled to complete a financial assessment report in a year's time.
A spokeswoman for the working group said it "just pointed to possible broad directions for the Housing Authority and government to explore", while also suggesting "a number of measures for the Housing Authority to consider for coping with its funding needs".
"While the government has to ensure that there will be sufficient funding for the Housing Authority to achieve the housing production target, the Housing Authority must keep enhancing cost-effectiveness and sustainability of its modus operandi in the long run."