Carrie Lam’s housing policy will benefit developers more than ordinary Hong Kong people

Albert Cheng says the chief executive’s focus on home ownership risks favouring the better-off middle class, thus creating divisions in society, and raises concern about possible concessions to developers

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Hong Kong Chief Executive Carrie Lam leaves the Legislative Council chamber after delivering her policy address on October 11. Photo: Bloomberg

Published: 3:15pm, 19 Oct 2017Updated: 7:32pm, 19 Oct 2017

Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor’s policy address earlier this month was heavily focused on land and housing policy, with the aim of helping Hong Kong people get on the so-called housing ladder. Apart from the Home Ownership Scheme, a Green Form Subsidised Home Ownership Scheme will enable better-off households in public housing estates to buy their own flats. In addition, Lam has initiated a “Starter Homes” programme that targets the middle class, and proposed regularising an interim scheme that allows eligible families to buy subsidised flats on the secondary market without paying the premium.

Despite such efforts, the “housing ladder” is now in name only, as property prices have skyrocketed in recent years. Lam’s predecessor, Leung Chun-ying, imposed stricter cooling measures right before he left office. The measures were meant to dampen prices, but all they have done is depress the secondary market.

First-time home buyers continue to be preyed on by developers in the primary private property market, where prices are at record highs. Even buyers whose household incomes are among the top 20 per cent of the city’s middle class cannot afford the insanely high down payment. Many of them manage to buy a tiny flat only with the support of their parents.

Carrie Lam must see beyond developers’ farmland to really help Hong Kong’s first-time homebuyers

About 1,000 flats to be built on this site at Anderson Road in Kwun Tong will be made available to Hong Kong’s middle class families under the Starter Homes scheme. Photo: Dickson Lee

As for Lam’s ideas, the so-called starter homes scheme is a plan that sounds good only on paper. Although the pilot project involves a site on government land that would be sold to developers next year, the scheme would also tap the vast tracts of agricultural land owned by developers. This may mean allowing developers to rezone idle farmland to residential use, with some conditions attached. Lam has yet to reveal more details but it raises concerns of potential collusion with developers.

Watch: Can the government work with developers to ease housing crunch?

Hong Kong’s developer cartel in line to benefit from Carrie Lam’s schemes, industry watchers say

The “green form” scheme, which began as a pilot project last year, is even more absurd. Under the policy, eligible public housing tenants can buy newly built public flats, instead of renting. This is supposed to free up some rental units, which can then be offered to households on the waiting list. In reality, however, the building of these for-sale flats will just eat into the supply of public rental housing. The government is already struggling to meet the target for public flats. If Lam regularises the green form scheme, favouring the better-off public housing households over those who are truly in need, it will only create divisions.

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