Look beyond brownfield sites to solve land shortage issues, think-tank led by Tung Chee-hwa urges
Our Hong Kong Foundation report suggests government take multi-pronged approach to finding space for development
Hong Kong could benefit from a capital gain of HK$3 trillion if the city’s government reforms the existing subsidised housing schemes, according to a new report released by a think-tank.
Our Hong Kong Foundation (OHKF), headed by former chief executive Tung Chee-hwa, said its proposal would also increase the city’s flat ownership from the current 50 per cent to 80 per cent by encouraging the resale of subsidised flats on the open market.
Under the proposal, which was floated last year, owners of subsidised flats can pay a potentially smaller land premium to the government in order to sell their flats and move up the housing ladder. Existing policy requires them to pay a market-based land premium but the foundation suggested fixing the premium level at the time of purchase instead.
Professor Richard Wong Yue-chim, an adviser to the think-tank, said many residents are unable to afford paying land premiums because of soaring property prices, and that the proposal would help close the wealth gap between the rich and poor.
“What is even worse is that 60 years after construction, many of these units will be so rundown that they will have to be redeveloped. By then, the unpaid land premium will most certainly reach an astronomical figure,” Wong said in the report.
“The only party that could redevelop these units would be the government. The injustice is that taxpayers would be forced to foot the bill yet again,” Wong added.
He estimated that privatising and deregulating the public housing supply would amount to a gain of HK$3.34 trillion, or equivalent to 150 per cent of the gross domestic product in 2013.
