Consensus reached on boosting land supply for housing, concerns prevail over public-private partnership


Housing, Infrastructure and Land | 2018-04-24

The Bauhinia Foundation Research Centre (the Centre) released a ‘Survey on public opinion towards land supply for housing and public-private partnership for housing development in Hong Kong’ today. The survey examined public views on land resources for housing, in particular public-private partnership (PPP) for housing development and the ‘Starter Homes’ (SH) scheme.

The Centre has commissioned the Hong Kong Institute of Asia-Pacific Studies of The Chinese University of Hong Kong to conduct the survey from 6 to 14 February 2018, polling a total of 1,002 Hong Kong residents aged 18 or above through telephone by random sampling. The survey aimed to better understand respondents’ attitudes from four perspectives: basic views towards housing, opinions towards ways of increasing housing supply in Hong Kong, PPP for housing development and SH scheme.

The Centre’s Vice-Chairman and Convenor of the survey Mr Lau Ming-wai said, ‘The “grand debate on land supply” will begin soon. We hope that this data-driven opinion survey can provide a solid ground for developing land for housing in Hong Kong, so that the Government will get a better grasp of public views on this issue. Land and housing problems have long troubled Hongkongers as different stakeholders have their own stances and rationales on the selection of land supply options. The Government has the responsibility to balance various interests, and resolve the housing problems facing those in urgent need with a rational and pragmatic attitude.’

Priority goes to ‘Public Rental Housing (PRH)’ and ‘Home Ownership Scheme (HOS)’ flats

The survey findings showed that 79.1% of respondents agreed that Hong Kong is in urgent need of developing more land for housing, reflecting a social consensus on this issue. Given limited land resources, respondents agreed that priority should be given to building ‘PRH’ (44.3%) and ‘HOS’ flats (21.6%). Therefore, the Government should consider carefully the proportion of different housing types when developing land and housing, ensuring effective use of Hong Kong’s land resources.

Socio-economic backgrounds affect people’s desire for home ownership

A fair number (68.8%) of respondents said it is important to buy a home. Among them, respondents with the following socio-economic characteristics, i.e. older, with higher monthly household income, living in self-owned property and married, were more likely to think it is important. In regard to education level, the percentage of respondents answering ‘unimportant’ was higher among those who had received junior secondary education or below, when compared to respondents with higher education attainment.

Private recreational land and private developers’ land are preferred in the short to medium term

The public seemed to have conflicting views when asked about housing supply in the short to medium term. More respondents preferred developing ‘land granted for private recreational use’ (27.3%) and ‘land owned by developers’ (23.3%), but neither of these two options enjoyed an overwhelming majority of those surveyed. This may reflect that the society does not have an obvious stance on how to utilise land resources in the short to medium term. It is foreseeable that the difficulty in seeking land for housing will persist in the near future.

PPP is acceptable but concerns remain

When asked about their views towards using PPP for housing development, especially public housing, 65.0% of respondents agreed that the Government should provide incentives to attract developers to cooperate with the Government in using their land for building private and subsidised housing at the same time. Compared to ‘increasing the permissible gross floor area of the site for construction’ (48.9%), more respondents accepted ‘providing infrastructural facilities such as roads, water and power supplies’ (61.6%) as an incentive for PPP.

The survey found that nearly half of the respondents (49.4%) thought that PPP will have mixed impacts on the society, with 41.5% of them believing that PPP will result in transfer of benefits from the Government to developers. To allay public concerns, ‘to appoint a regulatory body’ (30.6%) is relatively a more acceptable plan to ensure PPP is fair and transparent. The Government can consider this approach when formulating relevant policies in the future.

Over 50% agreed with SH scheme, with mortgage arrangements making reference to existing HOS practices

More than half of the respondents (55.6%) agreed in principle that the Government has the responsibility to assist first-time homebuyers. Respondents with the following socio-economic characteristics, i.e. younger age group, lower education level, less monthly household income, living in PRH or rented private housing, who were unmarried or married with children under the age of 18, were more inclined to agree with this notion. The survey also revealed that 58.5% of respondents agreed with the Government’s plan in introducing the SH scheme. In general, respondents agreed that the Government should refer to existing HOS practices, such as providing a mortgage loan of up to 90% loan-to-value ratio (68.8%) and mortgage loan guarantee (63.6%) to families who will buy SH flats. However, respondents had divided views on the recommendation of determining the prices of SH flats in accordance with eligible families’ income level (agree: 38.8%; disagree: 35.0%). The split opinions may be attributed to the fact that respondents had little knowledge of the SH scheme as details have yet been unveiled.

The survey also found that ‘price of the flat’ (53.8%) was the key factor influencing people’s decision on whether to buy a flat under the SH scheme, followed by ‘transportation and ancillary facilities’ (16.5%). As a result, the society needs to discuss whether the prices of the SH flats should be set in respect to the affordability of eligible households. Since most developers’ lands are farmland, if PPP is adopted for the SH scheme, the Government must consider how to strike a balance between environmental conservation, community economy, transportation and ancillary facilities.

‘The Government is obliged to speed up land supply and meet people’s needs for public and private housing. Housing shortage and soaring home prices affect not only people’s livelihood, but also Hong Kong’s long-term competitiveness. I hope the Government will listen to people’s opinions actively and map out strategies with various stakeholders when formulating housing policies. It is essential to win a broad consensus and ensure that people can live harmoniously and happily’, Mr Lau concluded.