It’s the Government’s Responsibility to “Get the Flour”
PROPERTY TRENDS 樓市傳真 做麵粉建房屋 政府責無旁貸
In a recent public appearance, Chief Executive Carrie Lam once again addressed the city’s housing shortage crisis, stressing that the government would be willing to build more affordable housing as long as there’s land for it, but that “without the flour, we can’t make the bread.”
By saying this, she gave an impression that the dire housing shortage problem is caused by the lack of land supply, and the government is not to blame. But the truth is, only 25% of Hong Kong’s land has been developed, and the remaining 75% largely constitutes of country parks, farmlands and brownfields. Of course, the government has given us a variety of reasons why these lands are left undeveloped: the country parks are protected, and development plans have been blocked by environmentalist groups; deserted farmlands are already in the hands of property developers, but the government doesn’t have the authority to force them to start building homes or confiscate their private property rights; brownfield sites house a large number of business operations, and it would be logistically and financially challenging to reclaim them; and even reclaiming golf courses is out of the question, because there are historic relics under them.
Ironically, we see other countries that have been dealt worse cards do much better than Hong Kong in this regard. Take Singapore, whose land mass is smaller than Hong Kong’s, most of which is already developed. Thanks to the high efficiency of their government, the country’s residents enjoy big flats and houses. In addition, despite the negative effects of quantitative easing measures, Singapore’s property price increase is far less than that of Hong Kong.
Even Malaysia has outdone us. Using a carrot-and-stick approach, the Malaysian authorities incentivises developers to launch their housing projects quickly. This goes to show that with good strategies, governments can always find a way to urge developers to reclaim idle land. After all, no businessman wants to stir up trouble with the government.
In theory, Hong Kong has plenty of land supply, and if it’s well utilised, we would have no reason to spend enormous amounts of money and labour, or to hurt the environment by reclaiming land from the ocean. The logic is obvious, but unfortunately, I have given up hope on the Hong Kong government, who has repeatedly proven itself incapable of sound land management. Therefore, albeit extremely costly, land reclamation may be the easiest and best solution for this administration.
In addition, I believe that once big land reclamation plans are announced, home builders will hasten to develop their projects, knowing that the payoff of land hoarding will diminish. In this sense, land reclamation can be a double victory for the public and it has my vote— not because it’s necessarily the best option, but because it’s the one most likely to be implemented.