Hong Kong housing

Land supply consultation is just a charade – the Hong Kong government plans to cut a deal with developers

Regina Ip says it’s clear the government plans to let developers build expensive housing in the New Territories, and will seek to pacify the public by sacrificing golf course land and implementing a vacancy tax. The scheme, however, may just inflate prices and worsen inequality

PUBLISHED : Saturday, 23 June, 2018, 12:45pm
UPDATED : Saturday, 23 June, 2018, 6:51pm

The Hong Kong government’s public consultation on land supply is rapidly unravelling as a charade designed to fool the public that the government has no predetermined ideas of how best to increase Hong Kong’s land supply, and how best to avoid getting hit with accusations of government-business collusion.

Back in October 2016, the Planning Department published a comprehensive document – “Hong Kong 2030+ – Towards a Planning Vision and Strategy Transcending 2030”, which pointed out that built-up areas take up 24 per cent of land, of which 26 per cent is reclaimed land, accommodating 27 per cent of the total population. Four decades of new town development succeeded in accommodating 3.4 million people. To produce adequate land to meet Hong Kong’s requirements for population growth, as well as better housing, social and economic development, the East Lantau Metropolis and New Territories North, in effect new towns, were identified as “strategic growth areas”.

The Legislative Council was briefed on these planning proposals and a public hearing was held. The Planning Department embarked on a six-month public engagement exercise. Although no report on their findings was ever made, there is no evidence to suggest that public representations of sufficient weight was received which warranted unmooring the government planners’ steadfastly held vision.

The new administration under Carrie Lam Cheng Yuet-ngor decided to re-engage the public, but this time with a difference. Perhaps to insulate the administration from any flak that might arise from making hard land choices, the administration contracted out the work on land search and public consultation to a task force on land supply, headed by a former banker and comprising a motley crew of social activists, politicians, economists and sundry professionals.

Public consultation on land supply is doomed to fail, just like the ones before it

In April, under the rubric of a public consultation campaign heroically termed “Land for Hong Kong: Our Home, Our Say!”, the task force sought public views on 18 short-to-long-term options for increasing land supply.

Whether by design or by default, the option which has stirred the strongest emotions is the idea of using land at the Fanling golf courses for housing. In complete disregard of the lead time required for undertaking engineering studies, environmental impact assessment and for providing the necessary transport infrastructure, along with the need to protect old and valuable trees, ancestral graves and rare species, political pressure has been mounting to use golf land for housing.

Pitching large numbers of inadequately housed people against 2,000-odd elite golfers, the Fanling golf courses have become a poignant symbol of the glaring disparity between the propertied class and those without.

Is Fanling golf club getting ‘picked on’ as Hong Kong debates ways to ease housing shortage?

The administration has stayed mum, but in the same vein as the 2016 planning vision, the consultation pamphlet makes a strong case for reclamation as the most reliable source of land supply (past reclamation accounting for 25 per cent of Hong Kong’s developed area).

Again, it puts forward East Lantau Metropolis – the development of artificial islands in “central waters” (east of Lantau and west of Kau Yi Chau) as providing the greatest source of developable land in the long term.

Watch: Fanling golf course could be used for housing

A new element has emerged, which has been eclipsed by the row over golf land. Tactfully embedded along with other options is the real centrepiece, the proposal for a “public-private partnership”, along the lines of the joint venture between the government and four developers in Sha Tin in the 1970s, which resulted in the development of a major private estate now known as Sha Tin City One.

Clearly cagey about accusations of government-business collusion, the document suggests that “an open, fair and transparent mechanism”, on top of the established land resumption and planning procedures, should be set up to ensure applications are assessed “objectively and consistently”.

Whereas in the case of Sha Tin, 70 per cent of the land owned by developers was passed to the government for public housing, the consultation document shows a clear preference for the development of “starter homes” (for first-time buyers) or home-ownership flats.

Will mixed-use buildings for Hong Kong starter homes create rich-poor resident divide?

Undoubtedly, developers would prefer giving up land for higher-income buyers than for public rental housing applicants. As small units of about 400 square feet in new development areas as remote as Tseung Kwan O are fetching HK$8 million and rising by the day, developers would make a much bigger killing if the government could be persuaded to build “starter homes” instead of public rental housing adjacent to their private residential developments.

The administration’s hidden agenda is not hard to decode – it is prepared to sacrifice the golf land to appease the crowds; go for reclamation on a large scale in the long term; and untie the Gordian knot on housing in the near term by doing a deal with developers to allow them to build expensive housing for the middle class on their agricultural land in the New Territories.

To shield the government from accusations of collusion with business, officials would set up some arms-length mechanism to broker a deal with the developers.

Does it surprise you that the Hong Kong Policy Research Institute, the government-friendly think tank established by former Legislative Council president Jasper Tsang Yok-sing, has simultaneously proposed setting up a new, independent authority to facilitate public-private partnership in developing the agricultural land hoarded by developers in the New Territories?

Time for action, not just debate, in tackling Hong Kong’s housing crisis

In an apparent move to clamp down on hoarding by developers, the government has given notice that it would introduce a vacancy tax. If the covert plans for a public-private partnership for joint development of “starter homes” succeed, the developers would be more than compensated for whatever losses they sustained due to the vacancy tax.

A public-private partnership is no bad thing if it unlocks vacant land, but this ruse could backfire if it ends up pushing home prices even higher and channelling more wealth to the developers, while we neglect the neediest in our society. Time will tell.

Regina Ip Lau Suk-yee is a lawmaker and chairwoman of the New People’s Party. She is a member of the Hong Kong Golf Club