Source:
https://scmp.com/comment/opinion/article/3015351/how-carrie-lam-can-cool-anger-hong-kong-address-housing-crisis
Comment/ Opinion

How Carrie Lam can cool the anger in Hong Kong – address the housing crisis

  • The government’s rush to push through the extradition bill was in stark contrast to its lack of progress on the biggest issue facing Hong Kong – unaffordable housing
Protesters against the extradition bill take a breather at the harbourfront overlooking the Kowloon skyline outside government headquarters in Tamar, Admiralty, on June 18. The rising cost of housing in Hong Kong has fuelled public dissatisfaction. Photo: Dickson Lee

Directly addressing the most pressing issue facing Hong Kong may be the government’s only way to pacify an outraged public. Public unrest reached boiling point with the government’s mishandling of the extradition bill, which has sparked massive protests. While the bill may have been the straw that broke the camel’s back, the government’s handling of Hong Kong’s housing problem has been a simmering public issue for years.

A report last month found that, in April, Hong Kong home prices rose at their fastest pace in over six years. So, when the government tried to rush through the extradition bill, many questioned why it had taken precedence over the most important issue – Hongkongers’ livelihood. With the housing problem seemingly on the back-burner, it comes as no surprise that the public has become disillusioned.

Frustration over housing has been building for years. Last year, the disparity between the rich and poor in Hong Kong was the greatest in 45 years. Unaffordable housing have contributed to an ever-widening wealth gap. For nine straight years, Hong Kong was and still is the world’s most expensive housing market, according to the Demographia International Housing Affordability Study. It is difficult for young Hongkongers, many of whom have taken part in the recent protests, to fathom that it would take a family on average 21 years to save enough money to buy a home in the city.

Chief Executive Carrie Lam Cheng Yuet-ngor once said that housing was “the most important, most complicated, and most serious problem” in Hong Kong. Previous governments had attempted to curtail soaring home prices, but to no avail. The recent vacancy tax proposal should at least unlock some housing supply in the market, although critics believe that the measure is toothless, describing the tax as a “political gesture” and a “paper tiger”.

Nevertheless, the government continues its current land sale policy, which encourages deep-pocketed developers to bid exorbitant amounts for land. For instance, the government sold four plots of land at the former Kai Tak airport site at 50 per cent above market valuation.

The high price will inevitably be translated into the final cost of flats. Without any amendments to the government’s land sale policy or measures to subdue the demand for housing, the status quo will prevail.

The housing crisis is also exacerbated by the immigration policy. The one-way permit scheme allows up to 150 people from the mainland to immigrate into Hong Kong every day, maintaining the high demand for housing. The government should seriously consider whether the policy is still in the region’s best interests.

Existing public rental homes cannot alleviate the problem. As of the end of March, the estimated waiting time for public rental housing was 5½ years. With no immediate increase in public housing supply, a rise in private housing rents is to be expected.

Oi Tung Estate (left), a public housing estate, stands next to Tung Yuk Court, a Home Ownership Scheme estate in Shau Kei Wan. The average waiting time for public housing is 5½ years. Photo: Martin Chan
Oi Tung Estate (left), a public housing estate, stands next to Tung Yuk Court, a Home Ownership Scheme estate in Shau Kei Wan. The average waiting time for public housing is 5½ years. Photo: Martin Chan

Unaffordable rent is the primary cause of the proliferation of subdivided flats, dwellings widely considered uninhabitable. People are forced to live in cramped and stressful conditions, which are incompatible with their basic physiological needs. The lack of adequate measures to deal with subdivided flats has further fuelled resentment towards the government.

This resentment became mistrust when the former secretary for development was embroiled in a subdivided flats scandal. The government’s decision to retain him as financial secretary probably further damaged the public’s perception of the government’s lack of sincerity in addressing the problem.

Proponents of Hong Kong’s free market economy may argue against any government intervention. To the dismay of the public, the secretary for transport and housing has said that one of the reasons he was opposed to imposing a minimum size on private flats was because Hong Kong is a free market, ignoring the fact that the government owns and controls almost all land in Hong Kong.

Instead, the secretary for labour and welfare recently considered subsidies for families living in subdivided flats. Subdivided flats used to be a “shameful” business practice, but are now legitimised by the government as a yardstick for measuring poverty. Has the government capitulated to unscrupulous landlords?

A capitalist economy does not mean doing away with government intervention. “Father of economics” Adam Smith held that the government has a “duty of protecting, as far as possible, every member of society … from oppression”. The fact that Hong Kong now has “nano flats” for sale is an indication that the weak are being exploited. It is the government’s duty to protect its citizens from being taken advantage of.

During the Occupy protests, I wrote: “More than ever, Hong Kong needs a leader who can communicate and heal the social divide”. I emphasised that Hong Kong needed effective communication from its leadership to convince residents that their voices had not only been heard, but dealt with.

That sentiment, expressed almost five years ago, is still very relevant today. We are again in a crisis which cannot simply be solved in the comforts of Government House. The public needs more than just an apology from officials. In moving forward and soothing an outraged public, Hong Kong needs a leader who can courageously confront the housing problem, the No 1 issue dividing our society today.

Franklin Koo is an accredited mediator, lawyer and author of Power to the People: Extending the Jury to the Hong Kong District Court. [email protected]