Hong Kong housing

Hong Kong finance chief Paul Chan gives cash to help use idle government sites – but nothing to boost home ownership

Subsidies for NGOs that want to use government or community land included in budget, along with sell-off of 27 residential sites and four commercial sites

PUBLISHED : Wednesday, 28 February, 2018, 6:41pm
UPDATED : Wednesday, 28 February, 2018, 11:30pm

The Hong Kong finance chief sought in his latest budget to make more efficient use of idle or underdeveloped government, institutional and community land to ease the city’s housing crisis.

This includes a HK$1 billion subsidy to help NGOs use almost 900 idle government plots and vacant campuses for short-term purposes such as container homes, performance venues, offices and welfare services.

It also includes efforts to redevelop and consolidate existing government facilities to release more land for housing and economic development.

But the budget speech, which Financial Secretary Paul Chan Mo-po gave on Wednesday, did not mention how to boost home ownership in an increasingly pricey property market, despite Chief Executive Carrie Lam Cheng Yuet-ngor’s emphasis on this in her policy address of October last year.

“Land and housing supply has been a long-standing problem in Hong Kong,” Chan said in his budget speech. “The government has been making every effort to identify land and boost housing supply.”

A government source close to the plans for the idle sites said few NGOs had applied to use vacant schools and government sites in the past few years – with only six applications last year – due to the sites’ remoteness and poor condition.

“Some NGOs became scared after visiting the sites because they did not know what responsibilities they needed to take,” the source said. “These sites are often next to slopes and the NGOs are worried that they will have to maintain the slopes as well.”

The source said the subsidy would fund the organisations to renovate the premises. She added that the Development Bureau would coordinate with other departments such as the Buildings Department and the Fire Services Department to make it easier for the short-term projects to meet building codes and fire safety standards.

The government will take responsibility for maintaining slopes, she added.

She said if groups wanted to build temporary housing on the sites, they would not need to apply to change the land use for five-year tenancies in urban areas and three-year tenancies in the New Territories.

There are about 860 vacant government sites and 28 vacant campuses available under the plan. The source said another 26 vacant schools would be available soon.

Chan also said in his speech that the administration would look to build multi-storey government, institutional and community sites, to optimise land use.

One example of this cited by the source was the proposed redevelopment of Tuen Mun Clinic. She said the clinic only has three floors and a redevelopment could easily add five or more storeys.

She said the clinic is opposite a government office building, which could move into the redeveloped clinic. In so doing, she said, the government could free up the office block’s current site for housing.

Chan said the government would put 27 residential sites and four commercial sites up for sale this financial year, which would have the potential for 15,200 flats and 5.7 million sq ft of commercial space.

The government estimates it can provide 75,000 public rental flats and 25,000 subsidised flats for sale in the next five years, leaving it seemingly behind on its 10-year target of building 280,000 public sector flats. It expects the private sector to provide about 104,000 flats in the next five years.

Chan’s budget set aside HK$8 billion to help the city’s 18 districts develop one infrastructure project each, which they consider most lacking in their area, such as municipal buildings or pedestrian links. A government source said the initiative aimed to quicken the funding process for these projects, so the Legislative Council could discuss whether to approve the lump sum in one go, instead of dealing with each project separately.

The city’s largest social service provider, the Hong Kong Council of Social Service (HKCSS), welcomed the boost in land and resources for NGOs.

Land and extra resources are all well and good, but one of the biggest difficulties these NGOs face is a lack of coordination and know-how
Anthony Wong, HKCSS

“NGOs have been asking for more dedicated spaces to conduct activities for many years, so we of course welcome the increase in land and government resources,” HKCSS business director Anthony Wong Kin-wai said.

HKCSS, which represents some 460 NGOs in the city, said the extra space would be helpful for groups that hope to use it for transitional housing or bazaars for selling arts and crafts.

But Wong said money and resources alone are not enough.

“Land and extra resources are all well and good, but one of the biggest difficulties these NGOs face is a lack of coordination and know-how,” he said.

“For example, to just organise a bazaar at a vacant school requires getting permission and coordination between a range of government departments, from the Fire Services Department, Home Affairs Department to the Food and Environmental Hygiene Department. It’s quite the challenge for one organisation to do all of this, the whole process could be a lot more efficient and streamlined.”

Lee Wing-tat, chairman of policy think tank Land Watch, said he was disappointed that the budget had no specific focus on policies to solve the city’s land and housing shortage.

“I was quite surprised there were only a few policies targeted at increasing land and housing supply,” Lee said. “The government should show its determination to ramp up land supply for housing, but this message was not delivered this time.”

Lee guessed one of the reasons was that the government was waiting until the Task Force on Land Supply submits its ideas and gets public consensus after its consultation begins in April.

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Hong Kong is the world’s most expensive city for property, according to the Demographia International Housing Affordability Survey. Since 2003, private home prices here have jumped by 445 per cent. The waiting time for public housing is close to five years.

I don’t understand why the government is so afraid that property developers won’t have enough land to build on
Lee Wing-tat

On Chan’s sell-off of residential and commercial sites, Lee said there was no need for the government to sell so much land to private developers, adding that he thought about half of those units should be allocated for public and subsidised housing.

“I don’t understand why the government is so afraid that property developers won’t have enough land to build on. If the government doesn’t sell so much land to the developers, yes, they’ll complain, but then this means they will turn to get their land resources from their own massive land bank instead,” he said.

It is estimated that some of Hong Kong’s biggest private developers together hold about 1,000 hectares of undeveloped agricultural land in the New Territories.

“There will not be a shortage of private housing supply even if they sell less land to developers. They can just convert their farmland for residential use,” he said.