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Wednesday, October 5, 2016, 00:23

Think tank offers solutions to HK’s housing problems

By Willa Wu

HONG KONG - Local think tank Our Hong Kong Foundation on Tuesday said the government’s long-term housing provision plan - which at most can provide 5,000 hectares of land - could satisfy slightly more than half of Hong Kong’s housing needs.

To satisfy the demands for housing in the coming three decades in the city, it is estimated that around 9,000 hectares of land are needed.

To increase the supply of land, the think tank suggested relaxing the urban density when planning new development areas, reclaiming land beyond Victoria Harbour and implementing the development of Lantau Island.

William Tsang Wai-him, a senior researcher at the think tank, said the new development areas in Kwu Tung North and Fan Ling North, Hung Shui Kiu and Kai Tak were capable of housing more people than the government planned. But this was possible only if development density could be enhanced, he added.

For example, if the development density of Kai Tak development area could be increased, then potentially 150,000 people could live there. This is an increase of 20 percent on the government’s plan of 123,000.

He also said Lantau Island is one of the city’s most strategically important development projects because it is located near the Hong Kong-Zhuhai-Macao Bridge and North Commercial District of the Hong Kong International Airport.

He proposed that the government use a light rail system to link major commercial and transport facilities in the area. This will provide more accessibility to the island to encourage more people to live there.

Yip Ngai-ming, a professor from the Department of Public Policy at the City University of Hong Kong, supports the think tank’s idea of increasing the development density in new areas.

Yip said the current development densities in some suburban areas were relatively low. This left room to accommodate more people to live there without straining transport and other facilities in the neighborhoods.

Asked about the government’s priority on developing the brownfield sites, Tsang said generating land supply should not rely on one approach. The government should consider multiple ways to increase land supply.

By the think tank’s estimate, the 100,000 public housing units to be completed in the next five years will also fall 30 percent short of the government’s public housing supply target of 140,000.

Hong Kong has paid a price for its lack of adequate land reserves in the past decade and inability to adjust land supply to meet market changes.

The government should establish a land bank for the city’s long-term housing needs, Tsang added.

Agreeing with Tsang, Richard Wong Yue-chim, an adviser of the think tank and a professor of economics at the University of Hong Kong, said the government should start looking for more suitable land. It should also simplify the approval processes for land development.

The report also proposed a “subsidized home ownership scheme”, under which public houses can be rented or purchased.

One specific proposal is to set a cap of the payment households need to pay to the government, if they decide to sell the housing units they acquired at discounted prices on government subsidies.

The think tank said the scheme could play a role in alleviating income inequities and inter-generational poverty.

But some experts have reservations. Yip from CityU said encouraging households to trade up their subsided housing in the market to reap profits gives a misleading impression that housing prices will always go up.

It is unfair to give such households double subsidies, that is, at first, allow them to buy housing at a discount, and later, cap the payment they owe to the government when they sell the property, Yip said.

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