Home Ownership Scheme 2022 portends the future of land sources
This article appeared originally in the Ejinsight on 9 March, 2022.
Authors: Ryan Ip Man-ki, Head of Land and Housing Research and Calvin Au Hou-che, Assistant Researcher at Our Hong Kong Foundation.
The latest Home Ownership Scheme (HOS) is now open for application after a year of hiatus. The HOS 2022 covers 7 projects, supplying approximately 8,900 flats at merely half of the market price. For citizens unable to afford private housing, the HOS has always been their only hope to become homeowners. Nevertheless, the previous 6 batches of the HOS sale witnessed oversubscription of more than 10 times, rendering the supply of subsidised housing in recent years a drop in the bucket against the backdrop of severe housing shortage.
Examining this year’s scheme, we find that the 7 new projects can be categorised into 4 main sources of land, namely core urban land, land in the new towns, land in the urban new development areas (NDAs) and NDAs in the New Territories (N.T.). Through analysing the development process and distribution of these 4 categories of land sources in the HOS 2022, a more plausible expectation of subsidised housing supply can be provided.
The first category – core urban land of rarity
Kei Wah Court in North Point, and Kwun Shan Court in To Kwa Wan, are both located in the core urban districts with exorbitant land prices. The former is the first project on the Hong Kong Island ever since the resumption of the HOS in 2014 (excluding Dip Tsui Court under the Green Form Subsidised HOS). These 2 projects together account for a mere 8% of flats in the HOS 2022. This reflects the rarity of core urban land supply. Worse still, the development process has been rather arduous.
Both projects stood on previously Government, Institution or Community (GIC) sites. Kei Wah Court used to be Tin Chiu Street Playground with a high usage rate and Kwun Shan Court was once a park temporarily used as the construction site for the Shatin to Central Link. Contentious debates are inevitable during the rezoning process when precious open space in the highly dense urban districts is used for housing development. Opposition mainly revolved around the inadequate open space in the area, overloading of transportation and the wall effect. Adjustments were then made accordingly. Consequently, the whole development spans a decade from the first announcement in 2014 to the expected completion in 2024. It can be concluded that sourcing land in the core urban districts for housing development is time-consuming, making it presumably hard to explore more of this land source in the future.
The second category – mature and saturated land in new towns
Yu Tak Court in Shatin, and Chiu Ming Court in Tseung Kwan O, are situated in new towns completed by the 1990s. The 2 projects together contribute to approximately 13% of flats in the HOS 2022, the second low among the 4 categories.
In fact, the so-called new towns are no longer “new”. As most of the land has been developed or has other uses, rezoning is also required for constructing new residential buildings. While Yu Tak Court was formerly an open space, Chiu Ming Court used to be a mix of a green belt zone and a GIC site. Both projects met with much opposition, mainly related to overloading of community facilities and transportation, as well as visual obstruction. Nowadays, new towns and core urban districts share more similarities than differences. Bounded by planning procedures, it is not likely that new towns can swiftly supply plenty of subsidised housing.
The third category – depleting urban NDAs
Kai Yan Court in Kai Tak Site 2B2 and On Sau Court in Site RS-1, Anderson Road Quarry, are both located in the core urban districts of Kowloon, which can be considered as urban NDAs, utilising the vast piece of contiguous land spared by the demolishment of large-scale mothballed infrastructure. The two projects amount to 42% of the total supply in the HOS 2022, the highest among the 4 categories.
Nevertheless, the land originally planned for residential development in these 2 urban NDAs has all been employed. The planning schemes have also been repeatedly revised due to the shortfall of residential land reserves, having turned 10 pieces of private residential land (3 in Kai Tak and 7 in Anderson) into public housing development. It was also announced in 2021 that 5 pieces of commercial land in Kai Tak would be rezoned for residential use, which is deemed as the Government’s last resort. After the intermittent sale of subsidised housing in the coming 5-10 years, it is believed that such supply will be completely depleted.
The fourth category – sustainable NDAs in the N.T.
Only Yu Nga Court in Tung Chung belongs to this category, providing approximately 3,300 flats alone, which constitutes up to 37% of flats in the HOS 2022 as the largest single project. This illustrates the characteristic of this category - comprehensive development facilitated by large land area. Similarly, Shan Lai Court at Queen’s Hill sold in 2020 provided 3,222 flats in 2020. In fact, abundant undeveloped land is available near these 2 projects for future development. Obviously, NDAs in the N.T. are rich in land sources to be developed and thus will become the major source of subsidised housing supply in the 5-10 years ahead, gradually taking the baton from urban NDAs.
Other than Tung Chung New Town Extension and the N.T. NDAs in Hung Shui Kiu and Kwu Tung North/Fanling North which are in the pipeline, OHKF published relevant study reports to call for reclamation in Lantau East and large-scale urbanisation in the N.T., which were echoed by the Government in the form of Lantau Tomorrow Vision and Northern Metropolis. It is conceivable that reclamation and large-scale development in the N.T. are the best bets to substantially and continuously increase subsidised housing supply in the future.