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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Residential buildings stand illuminated around the former Kai Tak airport area, centre, at dusk in Hong Kong, in June. Hong Kong officials should keep one core principle in mind: it should be the government, not developers, that dictates land supply. Photo: Bloomberg

Published: 2:15pm, 13 Oct 2017Updated: 7:24pm, 13 Oct 2017

Hopes were high that Chief Executive Carrie Lam Cheng Yuet-ngor would provide a timely solution for aspiring homebuyers, especially first-time buyers, when she delivered her maiden policy address on Wednesday. But her new “Starter Homes” scheme is to build only 1,000 residential units for first-time buyers, making some ask why the scheme seems unnecessarily complicated.

There had been a lot of speculation before the address about the scheme and using idle farmland owned by developers as a key source of land for the housing. But Lam failed to disclose any details about conversion of this land. Instead, she picked a residential site in Kwun Tong on the government’s land sale programme as a pilot project. So what happened to the farmland idea? Is it off the table?

Chief Executive Carrie Lam attends a question-and-answer session at the Legislative Council in Tamar on Thursday. Photo: Felix Wong

And, why did Lam avoid giving details about converting the idle farmland held by private developers into housing sites, as she had initially suggested? Some have, after all, claimed that developers will benefit most from this plan, given the potential for collusion. However, Lam has still insisted that the land should come from developers, holders of the biggest land banks in Hong Kong. Looking to them for land resources seems natural.

Hong Kong’s developer cartel in line to benefit from Carrie Lam’s schemes, industry watchers say

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.

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Carrie Lam must see beyond developers’ farmland to really help Hong Kong’s first-time homebuyers

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}Hong Kong’s developer cartel in line to benefit from Carrie Lam’s schemes, industry watchers say

Hong Kong’s developer cartel in line to benefit from Carrie Lam’s schemes, industry watchers say