Hong Kong government told to take back private developer sites to prevent ‘nosedive’ in supply of affordable flats

Housing chiefs warn shortages likely to worsen by 2022 as government struggles to meet targets
Reverse land sales to developers and convert industrial sites into public housing to fend off fresh homes crisis, say governors

Hong Kong housing

Shirley Zhao

Published: 7:00am, 11 Jun 2019

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Governors of Hong Kong’s largest public housing provider have warned of a potential “nosedive” in the supply of flats within three years, with some urging the government to use private sites to build affordable homes.

Members of the Housing Authority called for radical solutions on Monday to tackle shortages in public housing as the government falls behind its targets.

“The current public housing supply is far behind the target set by the government’s long-term strategy,” said member Wilson Or Chong-shing, who is also a lawmaker from the Democratic Alliance for the Betterment and Progress of Hong Kong.

“I’m very concerned that the supply will take a further nosedive in the coming three years.”

Hong Kong’s public housing system is under huge strain as waiting lists and property prices continue to rise. Photo: Edmond So

Insufficient supply is heaping more pressure on the city’s public housing system, where the waiting time for a low-rent flat has continued to rise to five and a half years, and hundreds of thousands of households typically compete for just a few thousand subsidised sale flats.

The government’s 10-year housing strategy aims to build 31,500 public flats every year, but the latest official figures show the projected supply by 2022-23 meets only 32 per cent of that target.

The situation looks particularly acute in 2022-23, when the production of public flats is forecast to plunge by 26 per cent on the previous year.

Or urged the government to take back sites earmarked to be sold to developers for private housing and use them to build affordable homes instead.

“If nothing has been done, we can foresee that the waiting time for public rental housing will only increase, and the oversubscription for subsidised sale homes will keep being outlandish,” Or said.

He added the government should exercise rent control on tiny, subdivided flats.

The government has set out a target to bring 31,500 new affordable flats into play every year but is struggling to do so. Photo: Reuters

Such flats, which often come with substandard living conditions, have become increasingly expensive due to increasing demand from those who cannot afford to rent bigger homes in the world’s most expensive property market.

Another member Anthony Chiu Kwok-wai, executive director of the Federation of Public Housing Estates, said the authority could identify existing public rental housing estates which had not taken up its permitted development density, and use the surplus allowance to build affordable sale flats for tenants wishing to get on the property ladder.

“I know building ‘needle towers’ in existing estates is controversial, but now the situation is too severe to dismiss any suggestion,” Chiu said at the meeting, which was held to gather members’ opinions.

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Needle towers are buildings on very small sites, which provide tiny flats and often worsen the air flow and natural light intake in the neighbourhoods they are built in.

Chiu added tenants should be allowed to purchase the flats they rent to meet the demand from such households for owning a home in their own neighbourhoods.

Member Cleresa Wong Pie-yue, a lawyer, suggested the authority redevelops its industrial buildings as public housing estates.

She said those properties were often located in good areas, which are suitable for housing developments.

The authority has six factory estates, providing small units for light industries. The annual occupancy rate there between 2014 and 2017 was an average 99 per cent.

Member Chua Hoi-wai, chief executive of the Hong Kong Council of Social Service (HKCSS), said the government should require the semi-public Urban Renewal Authority (URA) to turn some of its redevelopment projects into affordable housing projects.

Director of Housing Stanley Ying Yiu-hong will respond to members’ opinions and suggestions at a meeting on July 12.

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