Tom Holland

Abacus | Hong Kong’s solution to a housing problem that doesn’t exist: dump HK$1 trillion into the sea off Lantau

The government’s plan to create artificial islands off the coast of Lantau will cost HK$624 billion, but it habitually underestimates price tags on new projects by about 50 per cent

Still, the entire project is unnecessary – the city is not short of building land, nor is it short of housing. So how did Hong Kong end up in such a mess?

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Far from suffering a shortage, Hong Kong has an excess of housing – to the tune of 248,000 surplus homes. Photo: Xiaomei Chen

Tom Holland

Published: 12:15pm, 24 Mar 2019Updated: 10:22pm, 24 Mar 2019

Last week, the Hong Kong government said its planned project to create artificial islands off the coast of Lantau would cost HK$624 billion (US$79.5 billion), rather than the HK$500 billion it had previously estimated.

Despite the eye-watering cost – HK$83,750 for every single man, woman and child that lives in the city – the government insists the project is necessary to tackle Hong Kong’s grievous shortages of building land and affordable housing.

Let’s leave aside that the government’s first estimates habitually underestimate the price tags on its new projects by 50 per cent, which implies that the final cost of the Lantau project is likely to be at least HK$1 trillion, and very probably more.

There are a couple of more fundamental points that people have lost sight of amid all the outcry about cost:

1) Hong Kong is not short of building land.

2) Hong Kong is not short of housing.

Both these statements might appear to defy the visible evidence. So let’s take them one at a time.