Property group urges Hong Kong government to issue land bonds to speed up rural development and ease housing crisis

The government is being urged to issue “land bonds” to private land owners and increase building density in the New Territories to speed up rural development and ease the city’s housing crisis.

The Hong Kong Real Property Federation said it would meet the government in the coming days to put forward its suggestion for inclusion in the policy address of the city’s embattled leader, Carrie Lam Cheng Yuet-ngor, on October 16.

The proposal comes as the government struggles to resolve deep-rooted social problems, including a chronic shortage of land generally blamed for inflating property prices. Hong Kong’s sky-high house prices, which put home-ownership beyond the reach of most locals, are one of the grievances seen as fuelling angry protests that have ravaged the city for the last four months.

The federation’s idea is for the government to “commandeer” private land plots fit for housing development and to pay their owners with tradeable land bonds. These bonds entitle their holders to redeem land.

“Society has a consensus that the land problem can wait no longer,” said John Yip, representative of the professional committee at the federation, a group of developers, construction contractors, surveyors, architects and planners.

The creation of a market for land bonds would generate liquidity, said Yip.

“Professional surveyors can judge [how much is paid in bonds for each unit of land],” he said. “For instance, if a developer wants to develop in the New Territories, it can buy land bonds in the market. In the future, if the government offers some land in the New Territories, it can use the land bond as part of the value for bidding.”