The think tank, founded by former city leader Tung Chee-hwa, said its raft of property proposals could be the answer to the political crisis.

“Hong Kong is now facing an unprecedented storm,” said Eva Cheng Li Kam-fun, executive director of the foundation. “The government must tackle the deep-seated problem head-on.”

The 10 measures are known collectively as “HDB flats for Hongkongers” after Singapore’s successful subsidised housing programme. The foundation’s package aims to raise the proportion of Hong Kong families living in properties they own, from 49 per cent to as much as 80 per cent.

The plan would let young people make a down payment worth 10 per cent of the flat’s price, according to the foundation, while the remaining 90 per cent would be available in interest-free loans from the government.

Third pro-Beijing party offers aggressive proposal to solve Hong Kong’s housing shortage

Applicants could use the loans to buy new or second-hand flats on the private market.

“As for the question of fairness, those who have been renting their homes in the private market have been paying a de facto tax under the high land price policy [and unable to share the gain out of the rise in property value],” said Liu Pak-wai, an emeritus professor of economics at Chinese University, who serves on the foundation’s research committee.

“The loans will help narrow the wealth gap between property owners and non-owners. This could help relieve the tension in our society.”

Liu estimated the government would have to forgo the investment income of the funds set aside for the housing loan, which could be as much as HK$10 billion each year.

The scheme covered 39 estates managed by the Housing Authority and gave tenants the option of buying their homes. Some 140,000 flats, or 75 per cent of the city’s housing stock, were sold at steep discounts.

The think tank said the scheme should be expanded to cover some 180 rental housing estates, and be enhanced to help tenants buy the flats.

The foundation suggested the premium be fixed at the time of purchase rather than at the time of resale, which would make it much lower, considering the upwards trend in market prices.

Lowering the premium would stimulate residential turnover and allow more people to own property, according to the foundation.

But Stanley Wong Yuen-fai, chairman of the Housing Authority’s subsidised housing committee, said he had reservations about both the proposed loan and the expansion of the Tenants Purchase Scheme.

“The loan proposal has not addressed the problem of high property prices,” Wong said. “The young people getting the loan will still need to spend a large portion of their salary paying the monthly mortgage.”

He continued: “I don’t think this is what young people want – there’s talk among them of refusing to be ‘property slaves’ or working for developers their whole lives.”

He said public housing tenants would emerge as a privileged class with double benefits – they could buy a flat at knockdown prices, and then profit from repaying a much lower premium to the Housing Authority.

“Owners of other subsidised housing, people who fall out of the eligibility net of public housing, and the middle class will all question why they don’t receive so many benefits,” Wong said.

Lee Wing-tat, a former lawmaker who leads the Land Watch think tank, said it was likely the foundation was trying to influence Lam as she prepares her policy address. He pointed out, however, that any shake-up of Hong Kong’s housing policies would need public consultation.