The Hong Kong government should sell the existing public rental housing units to the tenants at cost in order to boost the homeownership rate, housing expert Richard Wong Yue-chim said.
“I think we should re-orient our housing strategy. Instead of doing public rental units, we should really do subsidized homeownership units. For the exiting rental units, I would urge to privatize them,” he said during a luncheon organized by the Hong Kong General Chamber of Commerce on Tuesday.
Such privatization can boost the homeownership rate in the city to 83 percent by 2023, from the current 15 percent, said Wong, a professor in political economy at the University of Hong Kong and an advisor to the Our Hong Kong Foundation, the new think-tank established by former chief executive Tung Chee-hwa.
He noted that boosting land supply by reforming land development and redevelopment regulations will be very difficult because of political opposition and the lack of rule-based settlements in land compensation disputes.
“Before we seek to reform this, I strongly urge that we first privatize our public housing because this is easier done politically and will generate sufficient political support for the government,” he said.
Demand for housing has risen rapidly due to demographic changes and other factors including higher divorce rate, aging population and more young people living alone, the expert said.
But the government has been slow to boost supply, he said, attributing it partly to delays involved in changing the land use clauses for property developers.
Steps must be taken to enhance the efficiency of altering the land-use rules and lower regulation tax so that small and medium property developers can enter the market more easily.
When asked about whether the government can take back the public housing units of rich tenants who already own private housing, Wong said it is a “theoretical proposition that has no political practicability”, because driving people out of their homes is a terrible idea.
“The only way you can deal with that is you give them the units, then all those units can come on to the market and everyone will applaud the government because they get a piece of the cake,” he said.
Instead, if you just want the tenants to just hand over the keys and leave, they won’t be ready to do it, Wong said.
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