No shortage of ideas to boost land for homes in Hong Kong. But do Carrie Lam and Beijing have the political will to overhaul the system?

In a new series delving beyond the social unrest in Hong Kong to survey the city’s deep-rooted problems, the Post is focusing on the role of housing in causing great disaffection in society

In this third instalment, we look at the high land price system that has contributed to today's problem of unaffordable housing and the array of solutions available to the government if a complete overhaul is a bridge too far

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Is a complete overhaul of Hong Kong’s housing system a bridge too far for politicians? Illustration: SCMP

Published: 8:30am, 27 Sep 2019Updated: 6:17am, 3 Oct 2019

The Hong Kong government caused a stir this week when it withdrew a sizeable plot of waterfront land from sale after rejecting five apparently low bids. But the canary in the property coal mine had been Goldin Financial Holdings, which walked away from the same project three months earlier.

The developer forfeited its HK$25 million (US$3.2 million) deposit when it gave up on the HK$11.1 billion plot at the former airport in Kai Tak, just two days after an estimated 1 million people took to the streets to oppose the government’s doomed extradition bill.

Abraham Razack, Goldin’s independent non-executive director and a pro-business lawmaker who was manhandled in the legislature when the bill was about to be scrutinised, blamed “social contradictions” – a euphemism for the looming troubles over the legislation – and the impact of the US-China trade war.

Putting up a tough front, the government doubled the bid deposit to HK$50 million to deter further snubs by developers. But on Wednesday it had to withdraw the site after it found no buyers willing to cough up its reserve price, as market watchers warned of developers getting cold feet amid the continuing social unrest.

The government had to withdraw the Kai Tak site after no buyers were willing to match the reserve price. Photo: Winson Wong

Once again, the impact of the protests on the golden goose of property in Hong Kong has become a talking point, with property tycoons coming under mounting pressure to do their part to defuse the tensions. Beijing has made plain its disappointment with “vested interests” whom it accuses of hoarding land or thwarting the government’s land policies. Through its party mouthpieces, the central government said the lack of affordable housing was fuelling the increasingly violent clashes.

As the city approaches the 17th weekend of protests, with the impasse between demonstrators and the government appearing as unbreakable as ever, some analysts and the establishment elite have begun mulling the need to forge a new social compact, with housing as a central plank.