Carrie Lam must see beyond developers’ farmland to really help Hong Kong’s first-time homebuyers
Lo Oiling says if it relies too much on developers, the Starter Homes scheme risks putting too much power in the cartel’s hands. It would be better to utilise the government’s land sale programme, as well as MTR sites, to boost supply
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But as developers are also land owners, will the initiative end up giving them the key to which sites should be used to build starter homes? And, will they decide when the time is right to apply for land conversion? If a developer were to dictate land availability, what does that mean for homebuyers? Such a system may well sound familiar, especially for those with knowledge of the notorious land application list system. Under this system, a site would only be put up for sale when a developer triggers its sale and offers a reasonable minimum price. The list system is a nightmare for homebuyers – it is the very mechanism that has driven up housing prices because developers control supply.
With limited information about the scheme, one legitimate question is: if the supply of units relies on private developers’ land banks, will the scheme become a land application list system by another name?
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For more than three decades, the MTRC has been a main source of land and private housing in Hong Kong. However, is has never supplied subsidised units, whether for the Home Ownership Scheme or the sandwich class housing scheme. There seems to be an unspoken rule that the company has no such social responsibility and that subsidised units should not be built on MTR station podiums.
Now, when profit-oriented private developers are being called on to help solve the shortage of accommodation for the middle class, why should the MTRC, in which the government holds a 75 per cent stake, not be considered to provide land resources?
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It can play a meaningful role in helping to address Hong Kong’s housing problem. What is puzzling, however, is that the company seems to be doing the opposite. It has just reduced the number of property projects for tender in the 2017-18 financial year, from eight to three, cutting its potential supply of housing units from 8,100 to 3,000, citing the surge in land premium cases and an increase in home supply.
If Carrie Lam really wants to help aspiring first-time homebuyers, the government should keep open its MTR options. The corporation has the potential to supply some 5,100 units this year. Amid the chief executive’s vow to ensure a steady supply of homes, the government shouldn’t allow this option to slip away.
Lo Oiling is a former journalist based in Hong Kong