Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Sunday, May 26, 2024

A profitable, affordable alternative to light housing and Lantau Tomorrow

A profitable, affordable alternative to light housing and Lantau Tomorrow

Light public housing proposal is just the latest wasteful, expensive idea from the government in its efforts to fix the city’s housing shortage. Rather than waste money on more consultations and impractical, expensive solutions, Hong Kong should embrace a collective initiative to solve the issue.
Housing was the only policy issue Chief Executive John Lee Ka-chiu chose for priority action in his first 100 days. Yet, more than 200 days later, no rational long-term housing proposal has been presented.

A mere 5 per cent of the roughly 240,000 households on the government’s waiting list were allocated public housing in the third quarter of 2022, according to the Housing Authority’s latest figures. The average waiting time for a public rental flat is almost six years.

This brings us to the government’s latest proposal to ease the city’s chronic housing shortage – the creation of 30,000 light public housing units. The price tag for this short-term solution to a political and societal ailment is a staggering HK$26.4 billion (US$3.3 billion). The units’ lifespan is just five years before they are demolished to make way for permanent residential developments.

The light public housing proposal is just the latest wasteful, expensive idea from the government as it tries to address the shortage of affordable housing and offer decent accommodation to families forced to live in subdivided flats or other unacceptable forms of housing.

Of all the wasteful schemes, the Lantau Tomorrow Vision – now known as the Kau Yi Chau artificial islands development project – tops the list. The estimated cost of creating 1,700 hectares of land for development on three artificial islands is now projected to be HK$580 billion, 16 per cent more than when first proposed in 2019.

Some critics have said this could soar to HK$800 billion, and there is no timetable for completion of the project’s 210,000 flats. It is a gargantuan project that makes no sense when you consider there is plenty of land available for affordable public and private housing.

Financial Secretary Paul Chan Mo-po said a day before Lee’s policy address that “at least 3,280 hectares” of existing land had been identified for development. That is almost double the proposed acreage of Lantau Tomorrow with minimal infrastructure and transport costs.

The most critical issue now is not where to find the land but how to pay for developing housing that is affordable to renters and buyers. Hong Kong had an estimated HK$774 billion in reserves as of September, so it is not short of cash. One option is to take the HK$580 billion of equity and debt that was planned for Lantau Tomorrow and use it to build affordable housing on land that is already available.

It is long past time for Lee to initiate – with the support of President Xi Jinping – a bold, innovative housing solution for Hong Kong – one that embodies the central government’s “common prosperity” plan.

Governor Murray MacLehose’s public housing policies transformed Hong Kong in the 1970s by rehousing millions of people from squatter huts to public housing, making the city what it is today. With a new innovative housing policy, Lee can transform Hong Kong into the city of the future.

One idea for the government and private sector to consider is what I call the “housing subsidy solution”, a subsidised housing scheme. It would involve a partnership between the private sector and government, managed by bankers and real estate executives rather than bureaucrats. In short, this solution could make housing affordable to homeowners and renters while also giving the developer-landlord a reasonable return on investment.

For this proposal, we should work on the basis that nobody ought to pay more than a quarter of their income for either a mortgage or rent. At the same time, the developer, landlord and seller should be able to make a reasonable return on their investment. So a subsidy fund would make up the difference between the actual cost and what the renter or buyer would pay.

This would involve five sets of stakeholders. First, the Legislative Council and the government’s housing agencies could determine what grants and tax benefits they can offer for subsidised housing and what they can secure from Greater Bay Area governments and the central government for Hong Kong landlords and developers.

Top executives from six major developers have been appointed as members of the Chinese People’s Political Consultative Conference, China’s top political advisory body, in exchange for their contribution to the stable development of the regional property market.

Second, developer and landlord charities would redirect a portion of their charitable contributions to the subsidy fund. This would include expanding the New World Build for Good concept, which is building 300 subsidised flats in Yuen Long and selling them at cost.

Third, public or private foundations, philanthropic organisations and individuals who are interested could also contribute.

Fourth, financial institutions, their charities and underwriters of public housing and infrastructure bonds can allocate a few basis points of every loan. They could also offer reverse mortgages to new buyers.

Finally, houses of worship and their charities that enjoy tax-exempt status could allocate up to 50 per cent of the donations they receive to the fund.

It is past time to build affordable housing for buyers and renters, housing that is also profitable for landlords and developers. Lee, Legco and government officials need to stop wasting money on more consultations and impractical, expensive solutions. Hong Kong can start building affordable housing profitably today through a collective initiative that could become a global model.

Related Articles

Hong Kong News
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.