Shenzhen shows way forward on homes
- In a change of direction to avoid Hong Kong’s property woes that have been largely blamed for social unrest, the city is now taking the path to affordable public housing
What set Shenzhen apart during transformation to a metropolis of 12 million was that it was positioned to learn from Hong Kong, including housing policy.
The approach of selling land to developers for residential and commercial development was eventually replicated across the country. What sets Shenzhen apart now is that it plans to head in another direction to avoid Hong Kong’s property woes, which officials largely blame for the current social unrest.
The focus now is on affordable public homes for professionals and low-income residents, with a combined public-private sector target of 1 million between 2018 and 2035.
Shenzhen’s rapid expansion created distortions in the property market, such as pockets of low-income housing in prime city centre locations.
In the past it had tried to follow Hong Kong and left it to the private sector and market forces to solve the problem. The strategy basically was to redevelop prime land in the hope that developers would build affordable housing further out for displaced tenants.
But now prices are so high that even in remote areas there is no longer affordable housing, prompting the government to focus on building affordable homes for grass-roots and low-income households.
The municipal government has set land-price benchmarks across the city, stipulating that land sold for subsidised housing should be priced at 30 to 40 per cent of the benchmark rate.
One of China’s most expensive cities turns its back on Hong Kong housing model
It plans to cap the price of newly built affordable homes in its downtown area, once in the original special economic zone, at 50,000 yuan (HK$55,600) per square metre. According to state media, affordable homes built in other areas will be restricted to 20,000 and 30,000 yuan per square metre. If these moves prove successful similar experiments can be expected in other mainland cities.
That will be a salutary reminder to Hong Kong of the failure of a housing policy for which it continues to pay a heavy price. We can only sit back and envy Shenzhen and its less complicated political environment for getting things done, such as urban redevelopment amid a land shortage.
But that should not impede a redoubling of efforts to find solutions that make a real difference to people’s chances of ever owning their own home.
