80pc of Hong Kong households can own homes with fixed land premiums for subsidised housing, urges former CE's think tank
Instead of renting, give public housing tenants chance to buy at big discount, says Tung's group
A think tank headed by former chief executive Tung Chee-hwa has proposed reforming Hong Kong's subsidised housing schemes to help at least 80 per cent of families own their homes.
Launching its first policy proposal since setting up a year ago, Our Hong Kong Foundation proposed that in future people living in subsidised flats should be allowed to pay a land premium to the government that does not fluctuate with the market. That would allow them to sell their property as a step to owning a home in the private sector.
People can now buy a Home Ownership Scheme flat from the Housing Authority at a discount but cannot sell it unless they pay a land premium, determined by multiplying current market price by the discounted percentage.
READ MORE: High rent, low salaries: how young Hongkongers are scheming to secure subsidised housing
With property prices having soared in recent years, residents in the scheme complain that land premiums are so high it is impossible to sell their flats and buy another one privately.
Foundation adviser Richard Wong Yue-chim, professor in political economy at the University of Hong Kong, said: "To keep families in [subsidised] public housing from having to chase after a constantly rising target ... we propose a few options [including locking in the premium] at the year of occupation ... The long-term objective of [this] scheme is for 80 per cent of households in Hong Kong to own their property."
About 53 per cent of households own their homes. When Tung was chief executive from 1997 to 2005 he wanted to help at least 70 per cent of households own their home. Some critics say his plan to build 85,000 flats a year was to blame for the property slump after the 1997-98 Asian financial crisis.
Wong also proposed extending the idea to public housing estates built in the future. These are rented to families on low incomes and are usually not for sale, but Wong proposed allowing new tenants to purchase their flats at the market price.
