Boost­ing pub­lic hous­ing seems to be the only way out for HK

China Daily (Canada) - - HONG KONG -

By al­most ev­ery mea­sure, the gov­ern­ment’s ef­forts to rein in Hong Kong’s run­away prop­erty market have failed to yield tan­gi­ble re­sults.

Per­haps, a thor­ough re­view of its hous­ing pol­icy, fo­cus­ing on in­creas­ing land sup­ply, is in or­der. Crit­ics ar­gue that find­ing land in this densely pop­u­lated city to build ad­e­quate hous­ing to meet the ever surg­ing de­mand is sim­ply not a re­al­is­tic so­lu­tion to the prob­lem, which has been com­pounded by per­sis­tent low bor­row­ing rates and the in­ces­sant in­flow of off­shore cap­i­tal into the lo­cal hous­ing sec­tor.

This has prod­ded more econ­o­mists and in­dus­try ex­perts to urge the gov­ern­ment to stay aloof from the market as much as pos­si­ble while con­cen­trat­ing on build­ing sub­si­dized homes for sale or rent to those at dif­fer­ent in­come lev­els.

Do­ing it would mean that a much larger por­tion of newly cre­ated devel­op­ment land has to be used for pub­lic hous­ing in­stead of sell­ing it to pri­vate de­vel­op­ers. Such a pol­icy would, un­doubt­edly, lead to a sharp fall in rev­enue from land sales, along with a sub­stan­tial rise in ex­pen­di­ture.

But, pub­lic hous­ing devel­op­ment is a non-re­cur­rent ex­pen­di­ture that won’ t ex­ert a long-term strain on the bud­get. Tem­po­rary bud­get short­falls can be eas­ily be cov­ered by the huge fis­cal re­serves that are earn­ing mea­ger re­turns.

As with any large-scale con­struc­tion project , build­ing a pub­lic hous­ing es­tate can run into prob­lems aris­ing from bud­get over­runs and de­lays. But, these are small risks to take com­pared to the enor­mous ben­e­fits that a big­ger sup­ply of sub­si­dized homes can bring to the pub­lic.

A clear timetable of fu­ture in­creases in pub­lic hous­ing sup­ply can ease the anx­i­ety of prospec­tive home­buy­ers who have been mis­led by sen­sa­tional re­ports in the gullible mass me­dia into be­liev­ing that prop­erty prices can only go up and, if they don’t buy now, they’ll never be able to af­ford it later. Such pub­lic ob­ses­sion has fu­eled the scramble that, in turn, has pushed homes prices to un­re­al­is­tic lev­els.

It ’ s plain knowl­edge that the prop­erty market is largely con­trolled by an oli­garchy of no more than half a dozen lo­cal de­vel­op­ers. A mas­sive sup­ply of pub­lic hous­ing can break the oli­garchy’s stran­gle­hold on the market that al­lows them to dic­tate prices.

PRO­VIDED TO CHINA DAILY

A pub­lic hous­ing es­tate in Chai Wan. In­creas­ing pub­lic hous­ing sup­ply is a fea­si­ble way to re­solve Hong Kong’s long­stand­ing hous­ing is­sues and ease the anx­i­ety among home­buy­ers.

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