Hong Kong housing is built to serve the market, not the people

John Chan says a comparison of housing policies in Hong Kong and Singapore brings home the main problem here – our plan is shaped by the needs of the property market, rather than those of the residents

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Country parks make up some 40 per cent of Hong Kong’s land. The government has been hesitant in proposing development of the fringe areas of the parks due to opposition from environmental protection groups. Photo: Martin Chan

Published: 9:03am, 11 Feb 2017Updated: 8:53pm, 11 Feb 2017

When Sir Murray MacLehose arrived in Hong Kong in 1971 to assume office as the city’s governor, the most visible signs of the acute housing shortage were the squatter huts on almost every hillside. Many others were living in pre-war buildings, in deplorable conditions. In 1972, he launched an ambitious 10-year housing programme, with the aim of providing decent accommodation for 1.8 million people.

Between 1973 and 1982, some 220,000 flats were built, of which 180,000 were public rental flats, and 23,000 were built for sale under the Home Ownership Scheme (HOS), which was set up in 1976. At the time when MacLehose left Hong Kong in 1982, most of the hillside squatters had gone.

Today, hillside squatter huts have re-emerged and are flourishing in a different form – the ubiquitous subdivided units hidden in old residential buildings and former industrial buildings. This shows that the shortage of affordable housing is no less acute today than it was in the early 1970s.

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However, since MacLehose’s departure, Hong Kong’s housing policy has become so twisted that it has ceased to be a housing policy and become merely a residential property market policy.

In the 10-year housing plan launched by Tung Chee-hwa, the first chief executive of the special administrative region, only 50,000 of the 85,000 flats planned to be built every year were public flats. Such a policy was bound to be heavily influenced by the private market. Therefore, it was no surprise that the plan was quietly shelved after the collapse of the property market in the wake of the Asian financial crisis. After he took over as leader, Donald Tsang Yam-kuen succumbed to market pressures, halting land development and ceasing to build HOS flats altogether.

Hong Kong’s housing policy has become so twisted that it has ceased to be a housing policy and become merely a residential property market policy

Whether it was Tung’s shelving of the 85,000-flats-a-year plan or current Chief Executive Leung Chun-ying’s imposition of different kinds of stamp duties, these were merely policy measures in response to either too little or too much demand in the residential property market; they do not add up to a policy focused on meeting the constant housing needs of the people.