HK details housing scheme

Government to resume more land, allocate more funds

The "Tong Lau" apartment buildings in the Kowloon area in Hong Kong. Photo: Wang Cong/GT

Hong Kong housing and development officials on Thursday discussed details on a housing plan announced by Chief Executive Carrier Lam in her third policy address on housing, which many believed is the most pressing challenge for Hong Kong, while experts noted that new measures could solve some problems in the long run, but that the government needs a stable environment to implement those measures.

Lam on Wednesday said the government will expedite its planning work and resume three types of private land to develop public housing and starter homes.

The three types of land to be resumed include privately owned brownfield sites in the New Territories that may have development potential; private land which has been zoned for high-density housing development in statutory outline zoning plans, but without any development plans yet; and urban private land located in Cha Kwo Ling, Ngau Chi Wan and Chuk Yuen United Villages suitable for high density housing development.

At a press conference on Thursday, Frank Chan Fan, Secretary of Transport and Housing of Hong Kong, said the imbalance between housing supply and demand has caused grievances.

"The way to address the problem is to seek land and build houses," Chan said, adding that as part of Lam's policy initiative, the government will resume more land and allocate more funds for public housing.

Responding to criticism that raising the ceiling on mortgages could drive up property prices, Chan said the move was simply to give a chance to first-time home buyers and will not significantly increase demand and prices.

Lam said about 700 hectares of private land will be resumed, of which some 400 hectares are expected to be resumed in the next five years, significantly more than the 20 hectares resumed in the past five years.

A tenant cooking lunch at a packed small room that serves as a laundry shop, a kitchen and bedroom for workers in a "Tong Lau" in the Kowloon area in Hong Kong. Photo: Wang Cong/GT

Most pressing challenge

Residents of Hong Kong remain suspicious about the housing measures.

"I have seen the housing measures, but they won't help," a Hong Kong resident, who preferred to be called by his surname Law, told the Global Times on Thursday, noting that housing prices will still be too high and would be hard to meet what's known as a stress test - an applicability test for mortgages.

Law, who is in his early 30s, is renting a 30-square-meter apartment in the Mong Kok area with his wife for HK$18,000 ($2,290) per month, almost one-third of their combined salaries. The couple is trying to buy an apartment but sees no hope in the short-term.

Law and his wife are among tens of thousands of Hong Kong residents living under extremely poor housing conditions. Officials and experts have called housing one of the reasons that have caused persistent unrest in the city.

While Law and his wife can afford to rent an apartment, many simply can't afford one but have to apply for public housing, which could take as long as five-and-a-half years, some residents said.

Boosting supply through land resumption could resolve some problems in the long run, on one condition: A stable political and social environment, said Tian Feilong, an associate professor at Beihang University in Beijing and a Hong Kong studies expert.

"Aside from land and housing measures and other measures that try to encourage start-up and innovation, the government needs a stable and peaceful environment to implement them, but the government doesn't have such a condition," Tian noted.

The forthcoming district council elections could also lead to some changes, and if the opposition camp gains control in more districts, then the government wouldn't get too much support from society, he warned.

Lam said more than 300 government, institution or community sites with a total area of some 300 hectares currently earmarked for standalone public facilities will be reviewed for development under the single site, multiple use model.

To assist non-governmental organizations in optimizing their underutilized sites, the government will facilitate the redevelopment of low-rise buildings on these sites by providing support and introducing mixed residential, education and welfare uses.

This will not only provide modern facilities, but will also increase the supply of various types of housing, including elderly housing, youth hostels or transitional housing, Lam said.

Property prices

On criticism of the government's plan to resume land from private owners to build public housing, Michael Wong, Secretary for Development of Hong Kong, said that while there have been some legal challenges, the government has won the cases because "after all, we are talking about public housing, not commercial [projects]."

He said the government will strictly follow the legal process in resuming the land.

The Chinese General Chamber of Commerce also welcomed the policy initiatives laid out in Lam's policy address. "Our president Jonathan Choi Koon-shum agrees that housing is the most pressing livelihood issue in Hong Kong and part of the reasons for social public grievances. And he is happy to see that the policy address is pushing to increase transitional housing [and other measures]," said a statement given to the Global Times on Thursday.

What's more, Carrie Lam noted that the Development Bureau will soon announce details of the Land Sharing Pilot Scheme aimed at accepting applications early next year. Unlike other development modes of government-led planning and government-initiated land resumption, the scheme will tap market forces in planning and construction.

The government will facilitate infrastructure enhancement to allow higher development intensity and require that at least 70 percent of the additional gross floor area gained be allocated to public housing or starter homes as intended by the government.

Shares of major real estate developers in the city rallied on expectations that the government's support for homebuyers will lift demand and drive up property prices. The stock rally lifted the market value of the six largest developers by as much as $3 billion, Bloomberg reported.

However, Frank Chan Fan, Hong Kong Secretary of Transport and Housing, pushed back such speculations, saying that the move was simply giving "avenue" for first-time home buyers and will not significantly increase demand and prices.

"I do not see the raising of the mortgage a determining factor for property prices," Chan said.