High property prices have been a longstanding complaint of Hong Kong people, but it has reached a point where even a top executive of a multinational bank puts it on top of the list of key challenges Hong Kong is facing as a global city.
“One of the things I am fascinated with Hong Kong is it is an amazing city that mixes so many characteristics. But whenever you say ‘I am moving to Hong Kong’, a lot of people will start telling you, ‘Where’re you going to live? Oh, it’s very expensive, and apartments are really hard to find’,” Nicolas Aguzin, Asia-Pacific chairman and chief executive of J.P. Morgan Chase & Co.
“The issue of availability of space, although not so much for me, making sure that there are all levels [of flats] and affordability, that’s clearly on top of my mind,” said Aguzin, who has been living in Hong Kong for about a year.
And Aguzin has been thinking a lot about the issue since the start of the Global Cities Initiative (GCI), a five-year joint project of JPMorgan and American think tank Brookings Institution.
Launched in Los Angeles in 2012, the million-dollar project is aimed at helping metropolitan areas grow their economy and create jobs by expanding trade and engagement with the rest of the world.
The initiative is producing new research to help city leaders assess their global position, and bringing them together to explore ways for strengthening global engagement.
Inflation in the housing market, infrastructure stress, and challenges associated with managing cosmopolitanism, particularly the impact of foreign talents and capital coming into the city, are some of the main problems Hong Kong is currently facing, said Greg Clark, global fellow at the Brookings Institution.
“You have to have a strategy around your housing market, that has to involve increasing supply as much as you can, providing financial support for people at entry level to get them into the housing market,” Clark said.
And besides boosting housing supply, subsidizing homebuyers and being able to recycle land quickly and effectively, Hong Kong also has to reach out to the surrounding regions in the long term.
“I believe that over time, the Pearl River Delta, particularly the areas that are nearer to Hong Kong, will also offer some of the solutions to the city’s housing challenge,” he said.
“I think you have to establish satellite communities, districts and places that are run by Hong Kong and up to Hong Kong standards, but also contribute to the supply of housing.”
Leading global city
Clark was quick to point out that a very stressed housing market is a problem of all global cities like New York and London — it’s not exclusive for Hong Kong.
“There is huge inflation in the housing market, lack of affordability, people not able to enter the housing market easily … that’s London’s problem. Rush-in money buying high-end houses, inflating the whole housing market, same challenge you have in Hong Kong,” he said.
“Some people who want to enter the housing market in London for the first time is in a desperate situation, and people are sad and frustrated and spending too much of their income on their housing, traveling too long to get to work every day. It’s the same in New York, so don’t feel alone.”
In fact, inflation and other such problems are manifestations of success of a competitive leading city, Clark asserted.
“Those are not indications of failure, having those problems are indications of success. But it produces management challenges that you must attend to actively,” he said.
Continuing competiveness is a function of your governance ability to tackle the problems that come with success, he added.
Hong Kong constantly ranks among the top six global cities in various rankings done by other institutions.
“You’re still in the early decades of the system [one country, two systems] you are in, and the governance system and the role of the leaders still need to mature and evolve. It’s terrible to say impatience … but the situation that Hong Kong finds itself in is normal for a successful city,” Clark said.
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