Much-vaunted shortage of land is a pseudo-issue in HK

With only 20 percent of its land developed, there is no shortage of land supply in Hong Kong. Land shortage is therefore a pseudoissue, and a government-sponsored debate on land supply is not going to solve the problem, but will delay solving it.

The crux of the issue is that of the 80 percent undeveloped land, more than half of it is untouchable country park. Of the remaining 40 percent our big developers own more than the government in their land reserve. They are sitting on it for decades, because doing nothing can actually make them richer. On the other hand, the government is barred from making any move on the meager part which they can touch.

All these sound highly unreasonable to any objective outsider but for some mysterious reason people here seem to accept the status quo. As a result, there has been an extreme shortage of housing supply which drives up the property prices and makes our developers very happy and very, very rich. People complain but the government claims that it can do nothing. So it set up a committee to investigate the matter and started the current debate to let us air our grievances and make our suggestions as how to solve the problem.

In the end the report of the committee will list many recommendations. It has done its job, and the government has done its part as well. People have voiced their opinions, and the report will be filed away. Life will then go on as usual because nothing actually can be done without changing the status quo and hurting the interests of the great land developers and they are going to make sure that nothing whatsoever will happen.

Property-related revenue accounts for over one third of government income, and our developers own practically everything that makes money here. They control communication, mass media, public transportation, port facilities, energy, retail, etc. in addition to property and property management. They even sponsor environmental groups which always prefer conservation over development. Can anyone imagine they would allow their fundamental interest to be chipped away?

Now our society is clearly divided into two groups, the haves and the have-nots. Those who have already owned property will of course want to see property prices going up. If prices come down, not only will they feel poorer, they actually fare worse. Last time when property prices fell too quickly, many were trapped in negative equity. For those who do not own a piece of property, they all scramble to join the have club, not only to have a roof of their own, but also to enjoy the ride of asset-price inflation.

In fact, people just want housing prices to be affordable so that they can jump on the bandwagon. Nobody actually wishes it to fall. The interest of the entire population is in a twisted way more or less in line with their exploiters.

Relying on property-related revenue as the major source of income for the government is like taking drugs because it will grow on you, suck your blood and you can never get rid of it. We introduced this dangerous habit into the Chinese mainland, and many city governments have got afflicted. We have to change our mindset. President Xi Jinping declared: “Houses are meant to be lived in, and not for speculation.” Slowly but surely, property prices in mainland cities have gradually come down and then levelled out.

The SAR government has more resources at its disposal to tackle this problem. For one thing, it can now survive for more than two years at zero income without shrinking any spending. At this advantageous position, it only has to do one thing: Build more low-rental public housing estates. And if it really wants to be nasty, put a moratorium on the developers’ huge land reserve and have it forfeited if they do not develop it before the deadline. Surely they do have the development right, but they certainly do not have the right not to develop and let the land lie idle while everybody else suffers.