My Take

Margaret Thatcher's home revolution too radical for Tung Chee-hwa's foundation

PUBLISHED : Wednesday, 11 November, 2015, 1:52am
UPDATED : Wednesday, 11 November, 2015, 1:52am

When Margaret Thatcher first came to power in Britain, one of her first signature acts was to introduce "the right to buy" public or "council" houses and flats for existing tenants.

At a single stroke, massive public assets were privatised, home ownership jumped 10 percentage points over the next decade, and what was previously of little tradable value became an active housing market. The programme proved so popular that even the Labour Party ended its opposition after initial resistance.

Reading the latest widely reported proposal by Our Hong Kong Foundation on boosting the city's home ownership rate to 80 per cent, Thatcher's radical initiative came to mind. But the think tank's proposed scheme pales by comparison.

READ MORE: 80pc of Hong Kong households can own homes with fixed land premiums for subsidised housing, urges former CE's think tank

Our Hong Kong, founded by former chief executive Tung Chee-hwa, proposes that all future public housing units under the Home Ownership and public rental housing schemes should be allowed to be rented or sold.

The premium that a seller has to pay back to the government will not fluctuate with the property market but will be locked in from the time he or she occupies the flat.

Households may also rent the public unit as a stepping stone to eventually buying it. The government will guarantee a mortgage with a down payment as low as 5 per cent.

Now, if these ideas were about existing public housing units, the proposal would be comparable to Thatcher's.

But we are talking about future units.

So even if the government adopts it as policy, it will not happen for several years. The 80 per cent ownership target is going to take a while to reach. That's too bad because a top adviser to the foundation is Richard Wong Yue-chim, a political economy professor at the University of Hong Kong.

READ MORE: HK$3m for a 170 sq ft flat? Ex-chief executive proposes release of more land to ease Hong Kong's 'shocking' housing crunch

Professor Wong has long advocated a Thatcher-like revolution.

Given most current sitting public tenants are elderly or low-income, he has argued that selling public flats to them at affordable prices will enable the latter group to acquire real tangible assets and the former to remortgage for annuities, which will guarantee a steady income over a lifetime.

I prefer Wong's idea, but evidently it's too radical for the foundation.