Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Friday, Jun 09, 2023

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.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

Hong Kong News
Close
0:00
0:00
The Fed fixing the economy
Corporations standing up for “LGDP-LGT-LBG-LGBTQ2+ kids” during ‘Pride Month’ be like:
A Major Ukrainian Hydroelectric Dam BLOWN UP
US and European Intelligence Agencies Uncover Evidence of Ukrainian Role in Terror Attack on Nord Stream Pipeline
Photos and videos of Hunter Biden with underage minors have been released.
The driver has been described by authorities as a 21-year-old woman from Tallahassee
Joe Biden falls at the Air Force Graduation
America's Got Talent…
Elon Musk has been showered with praise by the Chinese public during his trip to China
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
Drone Attack on Moscow's Wealthiest Neighborhoods Suspected to be Launched by Ukraine
AI ‘extinction’ should be same priority as nuclear war – experts
Chinese fighter jet buzzes U.S. Air Force spy plane over South China Sea
Prominent Hacker Forum RaidForums Suffers Substantial Data Breach
Nvidia CEO Huang says firms, individuals without AI expertise will be left behind
WPP Revolutionizes Advertising with NVIDIA's AI Powerhouse
Two US Employees Fired For Chasing Robbers Out Of Store As They Broke ''Company Policy''
Pfizer, the EU, and disappearing ink - Smoke, Mirrors, and the Billion-Dose Pfizer Vaccine Deal: EU's 'Open Secret
The Sussexes' Royal Rebound: Could Harry and Meghan Markle Return to the UK?
A provocative study suggests: Left-Wing Extremism and its Unsettling Connection to Psychopathy and Narcissism
Neuralink Receives FDA Approval for First-in-Human Clinical Study
Ukrainian Intelligence Official Admits to Assassination Attempts on Putin
WATCH THIS: democracy in Russia is so bad!
Ed Davey: It is possible for a woman to have a penis
Bernard Arnault Loses $11.2 Billion in One Day as Investors Fear Slowdown in US Growth Will Reduce Demand for Luxury Products
Russian’s Wagner Group leader: “I am not a chef, I am a butcher. Russia is in danger of a revolution like in 1917.”
TikTok Sues Montana Over Law Banning the App
Ron DeSantis Jumps Into 2024 Presidential Race, Setting Up Showdown With Trump
Steve Jobs introducing Apple's iPhone, exactly 16 years ago.
Banking Behemoth vs Ex-Boss: The PMorgan-Epstein Entanglement
China overtakes Japan as world's top car exporter
Talks between US House Republicans and President Biden's Democratic administration on raising the federal government's $31.4tn debt ceiling have paused
Biden Administration Eyeing High-Profile Visits to China: The Biden Administration is heating things up by looking into setting up a series of top-level visits to Beijing by top officials in the coming months
New evidence in special counsel probe may undercut Trump’s claim documents he took were automatically declassified
A French court of appeals confirmed former President Nicolas Sarkozy's three-year jail term for corruption and influence peddling
Debt Ceiling Crises Have Unleashed Political Chaos
Weibao Wang, a former software engineer at Apple, was charged with stealing trade secrets related to autonomous systems, including self-driving cars
Mobile phone giant Vodafone to cut 11,000 jobs globally over three years as new boss says its performance not good enough
Elon Musk compares George Soros to Magneto, the supervillain from the Marvel Comics series.
Warren Buffett Sells TSMC Shares Over Concerns About Taiwan's Stability
New Study Finds That Secondary Bacterial Pneumonia Is a Major Cause of Death in COVID-19 Patients Who Require Ventilator Assistance
The official tapes of Trump's deposition in the E. Jean Carroll battery (rape) and defamation case have been released.
King Charles III being crowned.
Newly released video of Donald Trump’s rape trial deposition:
Video: Ukraine MP Punches Russian Representative At Global Meet
El Paso mayor has declared a state of emergency
Russia accused Ukraine of attacking the Kremlin with drones in an attempt to kill Putin
Dutch court orders man who fathered 550 kids to stop donating sperm
Kim Kardashian Lookalike Christina Ashten Dies Of Cardiac Arrest, Hours After Plastic Surgery
Samsung has banned employees from using generative AI services such as ChatGPT
×