Date
20 September 2017
Most of Hong Kong's car parks, like this one on Rumsey Street in Sheung Wan, are underutilized. Photo: Internet
Most of Hong Kong's car parks, like this one on Rumsey Street in Sheung Wan, are underutilized. Photo: Internet

Solution to runaway home prices may lie in car parks

A former government official is offering an unconventional solution to the increasingly unaffordable property prices and rents in Hong Kong. And it has something to do with car parks.

Traffic jams are part of Hong Kong people’s daily life. There are just too many cars in the city.

Writing in the Hong Kong Economic Journal, Patrick Lau Lai-chiu, a former director of the Lands Department, said reducing traffic congestion could help ease the housing pressure.

As of August, the city has 690,000 licensed vehicles; the number of cars has increased 18.5 percent in the past five years. However, the total length of roads has just increased by 43 kilometers. 

As a result, Hong Kong has more vehicles for each kilometer of street than most cities in the world. One in every five families in the city owns a car.

To address the problem, the government has been focusing on encouraging people to use public transport such as the Mass Transit Railway and buses. Promoting public transport is the major task given to the Transport Department.

Meanwhile, the government has been working to expand the reach of the railway system to the western and southern parts of Hong Kong Island.

But it has exerted little effort in restraining demand for private cars. In fact, the motor vehicle first registration tax has been frozen for the last 10 years.

The demand for cars has kept growing in recent years, and it will certainly go up even more when the Hong Kong-Zhuhai-Macau Bridge opens in 2018.

In Hong Kong, most of the car owners are Sunday drivers: they only drive one to two times a week. That means the city has to provide car parks for these idle cars for 70 percent of the time during the span of their service.

There are around 692,000 parking spaces scattered around the city, bringing the combined area of parking lots to 93 million square feet, which is big enough to build 186,000 apartments measuring 500 sq ft each.

According to the Second Parking Demand Study Final Report released by the Transport Department in 2011, private car parks in all 18 districts in Hong Kong have vacancies except those in North Point, Tai Po, Tuen Mun and the Islands district.

For the 13 public multi-storey car parks, the overall usage rate was only 53 percent as of December 2013. The Middle Road car park in Tsim Sha Tsui has the lowest rate at 35 percent on average (The Middle Road car park was sold to Henderson Land Development for HK$4.7 billion in September. The group will transform the car park into a commercial complex with offices and shopping mall.)

So Lau’s idea is simple.

Number one: Raise the car registration tax to make it more costly to own one. Fewer cars mean less need for car parks and more land for building homes.

Number two: Encourage the conversion of underutilized car parks into residential blocks by facilitating the change of land deeds.

Number three: Amend related laws and require developers to build car parks underground. Under the user-pay principle, car owners should bear the extra construction costs.

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CG

EJ Insight writer

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