Two essential things to solve Hong Kong’s housing supply crisis
This article appeared originally in the China Daily on 29 June, 2021.
Authors: Ryan Ip, Head of Land and Housing Research and Iris Poon, Senior Researcher at Our Hong Kong Foundation
Most Hong Kong people will regard an apartment not just as a place to live, but also a place to be called home. But to many, the present crisis of public and private housing shortage would mean that even the simple wish of having one’s own home seems unreachable. How to boost the supply has been the most sought-after question in the realm of land and housing in Hong Kong.
Last month(on 21 April), we have published a report of annual review, providing an exclusive ten-year forecast on public and private housing supply. Based on a quantitative tabulation, we conclude that if things continue to proceed at the current speed, the Government will have no hope in ever reaching its own housing target in the next decade.
But the situation may be alleviated if the Government could achieve two things, thereby meeting its housing targets. These two solutions are expediating major land supply initiatives by two years, in particular New Development Areas, and raising the housing delivery sourced from rezoning and land administration procedures by 5%.
The ten-year housing supply target will only be achieved with Herculean Effort.
In the next ten years, the completion of public housing flats is unlikely to reach the target stipulated in the LTHS. In the 2020 Policy Address, it was stated that “based on the LTHS Annual Progress Report 2020 to be published by the Transport and Housing Bureau, we have identified all of the 330 hectares of land required for providing 316,000 public housing units to meet the demand for about 301,000 public housing units in the coming 10 years.” However, it should be noted that the figures referred may include flats still in the process of construction in the next decade, instead of the actual housing delivery.
In fact, based on our forecast, if all land supply initiatives continue to progress at the current speed, only some 277,400 public housing units could be completed in the same period. To achieve the figure stated in the Policy Address, New Development Areas and other major land supply initiatives will need to be completed with an expedited timeline, approximately two years ahead of their current schedules. In addition, the annual supply of flats from rezoning needs to be increased by 5% over the current level.
For private housing, we expect only an average of 15,000 units per year to be completed in 2021–2025. Looking further beyond, in the years of 2026-2030, an average of 12,000 private housing units are expected to be completed, which fails to meet the LTHS target.
If the Government wishes to fulfil the LTHS target, New Development Areas and railway projects need to be completed one year ahead of the original schedule, and supply from private development needs to deliver 5% more units each year.
Now is the defining moment to turn the tide of the city’s woeful housing crisis.
The above analysis goes to show that while the housing problem in Hong Kong has been a daunting one, it is not entirely unsolvable. A cushioned landing is possible in the next ten years, for as long as the Government would give up its “business-as-usual” attitude and be genuinely determined in meeting its housing target.
The key to raising short to medium term housing supply is to ensure all the New Development Areas that are currently under development will come on stream soon. Take Kwu Tung North, Fanling North and Hung Shui Kiu as examples, although these development projects started in the early 1990s, they are expected to be fully completed only by 2031 and 2038 respectively.
The Government is advised to conduct in-depth study on compressing the development procedures of New Development Areas, and speed up transport infrastructure projects that support New Development Areas, in particular road infrastructure including Route 11, Tuen Mun Bypass, and Lantau Road P1, as well as railway infrastructure including the Northern Link, Tuen Mun South Extension, and Tung Chung Line Extension.
We also urge the Government to ensure the newly set up Development Projects Facilitation Office announced in 2020 Policy Address can perform its functions effectively to streamline the administrative and approval processes in private housing development.
On public housing supply, in the report published last year, we have pointed out that many public housing projects were delayed due to bureaucratic procedures. We call on the Government to leverage on the Steering Group on Streamlining Development Control, with its expanded function, to improve cross-department coordination and to compress the timeline of public housing development.
Looking ahead, the Government must have the ability to develop large-scale new towns in a comprehensive manner, as well as the strategic vision to build a land reserve to support the long-term development of Hong Kong.