Money alone is no cure for Hong Kong’s housing shortage

Calls for government to build more subsidised flats seem to make political sense – but that takes us back to long-running question of where land will come from

PUBLISHED : Sunday, 26 August, 2018, 4:15pm
UPDATED : Sunday, 26 August, 2018, 10:38pm

“Why on Earth has the government spent billions of dollars to build this high-speed railway but not made better use of the money to build more public housing?” an angry caller demanded to know during a phone-in talk show by public broadcaster RTHK on Friday evening.

“Who wants to go to the mainland to work and live there if people can afford their own housing here?”

The caller had some basic facts wrong: those who are working or want to start a new adventure up north are not just in it for affordable housing, and property prices in many first-tier mainland Chinese cities are not all that affordable anyway. But her complaint was not without merit.

The long-delayed Guangzhou-Shenzhen-Hong Kong Express Rail Link, also the world’s costliest railway, is due to officially begin service in late September, but many unanswered questions still remain.

Going to mainland? Express rail opens up direct link to smaller cities

All the optimists, the government being foremost among them, painted a rosy picture, hailing it as a milestone in enhancing Hong Kong-mainland connections for the city’s future economic development, as well as providing more convenient people-to-people exchanges and boosting tourism.

However, critics see it as a white elephant and keep grilling the government on the politically controversial “co-location” checkpoint arrangement which will allow mainland officers to carry out border security duties inside their designated zone in the West Kowloon terminus.

The devil is always in the details. A more practical issue for passengers is, how ready are all the logistical arrangements, such as connection of the ticketing systems between Hong Kong and the mainland, luggage services on the other side of the border, and so on.

Over the past days, the internet has been abuzz with all kinds of “strategies” claiming to provide the most cost-effective and fastest ways to get connected to the 44 stops along the express rail line.

But there is a bigger question: will the HK$84.4 billion (US$10.8 billion) investment of public money ever be recovered, and when? And will that affect a reasonable fare system in the long run?

Secretary for Transport and Housing Frank Chan Fan gave an assurance that the rail link “will not incur any loss in the future”. Time will prove him to be right or wrong, but that will not stop people from wanting to know now whether the massive investment is justified.

Land supply debate shows Hongkongers’ views on reclamation changing

To be fair, when it comes to housing the government spares no effort, and money is not an issue for an administration sitting on a reserve that is the envy of many others.

That explains why the RTHK caller was so critical, reflecting the common perception that a cash-rich government should be able to provide enough subsidised housing for all. In reality, though, money alone is not a cure for all.

As the Chinese saying goes, even the cleverest housewife cannot cook rice without rice. Calls for the government to build enough subsidised housing to increase the current 60-40 split between public and private flats seem to make political sense, but it entails a zero-sum game if no extra land can be guaranteed.

Artificial island ‘could make room for 830,000 Hongkongers’

That takes us right back to the long-running question of where the land will come from. The government task force studying different source options had its final public consultation on Saturday, but, as expected, no mainstream consensus was reached.

It is sad and ironic to see a rich society like Hong Kong become a classic example of how you can’t just spend your way out of some problems. In this city, the biggest and most pressing one is housing.