Date
17 November 2017
Our Hong Kong Foundation said the price of a public housing unit should be linked to the development cost and the unpaid premium must be capped at the date of occupation. Photo: Our Hong Kong Foundation
Our Hong Kong Foundation said the price of a public housing unit should be linked to the development cost and the unpaid premium must be capped at the date of occupation. Photo: Our Hong Kong Foundation

Think tank says 75% of HK families to own homes under new scheme

Buyers of subsidized flats may not have to pay a high price to fully own their homes under a Subsidized Homeownership Scheme proposed by Our Hong Kong Foundation, Apple Daily reports.

In the third report under its Land and Housing Research Series, the think tank, established by former Chief Executive Tung Chee-hwa, suggests that the price of a public housing unit be linked to the development cost and the unpaid premium be capped at the date of occupation.

With the plan, it might be possible that after three decades, over 75 percent of Hong Kong families could become homeowners, the foundation said.

Under the privatization plan, a house worth HK$4 million can be sold at a development cost of HK$1 million with the unpaid portion capped at HK$3 million, meaning it will not be subject to market fluctuations. 

Under the existing mechanism, buyers of subsidized housing units are given a discount on the prevailing market value.

The foundation suggests that the plan to be implemented in four stages, starting from a pilot scheme of the Subsidised Homeownership Scheme, then expanding to all new public housing, and then the existing Home Ownership Scheme (HOS) and Tenants Purchase Scheme (TPS) owners, and finally applying in the privatization of the existing Public Renting Housing (PRH) units.

If the scheme proves successful, it can then be implemented across all new public housing estates and even at existing HOS estates.

The last step would be to slowly privatize existing public housing units while suggesting plans to offer owners discounts if they pay sooner or amortize their payments.

Richard Wong Yue-chim, a member of the foundation’s research council, said there has been a serious housing shortage over the past ten years, and subsidized homes simply could not catch up with the premium required in the market.

Stephen Wong Yuen-shan, head of public policy at the foundation, said the plan could also aid in rebuilding the housing ladder – from a PRH flat, then to a subsidized unit, and finally to a private house.

He said it is reasonable to lock down the premium price, and that homeowners do not need to bear the brunt of the appreciation of the home value.

Wong denies that the privatization of the public housing would be “forcing” people to buy the property, but rather it would be giving them more bargaining power.

Another researcher from the foundation, William Tsang Wai-him, says that the choice is still the homeowner’s alone.

However, Chan Kim-ching, a member of the Liber Research Community, slammed the plan, saying that it is transferring the housing problem to the grassroots rather than helping them.

He pointed out that there have been similar attempts in Britain which had resulted in all sorts of crises, adding that the taxpayers’ money should not only be used for subsidized housing or public housing as it would be considered unfair.

Lawmaker Andrew Wan Siu-kin, a member of Legislative Council’s subsidized housing committee, said there is a large number of subsidized housing units without premium that would be hard to include in the proposed scheme.

Although he thinks the plan will help homeowners deal with market value appreciation, the government should not trim down the supply of public housing.

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EL/BN/CG

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