On The Record
Rebuilding the housing ladder
September 14, 2013
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Secretary for Transport & Housing Prof Anthony Cheung
Earlier this month, the Long Term Housing Strategy Steering Committee released a consultation document on the direction of our housing development for the next 10 years. Ever since the committee, of which I am the chairman, started work 10 months ago, the community has been following its discussions with keen interest.The Long Term Housing Strategy (LTHS) consultation document sets out the vision of providing adequate and affordable housing for each and every family in Hong Kong, and to re-establish a housing ladder that promotes upward mobility.
Hong Kong used to take pride in our housing story. The public housing programme launched in the 1970s, had vastly improved the living conditions of many grassroots families. It also released extensive urban land previously occupied by squatters, and helped spur the development of new towns.
Yet today, housing still tops the livelihood issues of concern to the general public. We witness a proliferation of sub-divided units, severe under-supply of housing, and rising property prices and rents beyond the affordability of the general public. The general public's living conditions are not simply commensurate with the economic affluence of our society. The seriousness of our housing problem has resulted in a divided society and aggravated class conflicts.
If you ask me what are the most important messages in the consultation document, I would say it is the committee's recommendations that the Government should strengthen its role in the provision of housing by adopting a "supply-led" strategy to address the supply-demand imbalance in a fundamental and long term manner.
We will provide public rental housing for the grassroots, the Home Ownership Scheme (HOS) and other forms of subsidised housing for the lower to middle-income groups, as well as young and first-time home buyers. We will also provide a stable private property market, with priority accorded to meeting the housing needs of Hong Kong people to facilitate those who can afford home ownership.
In terms of strategy, the premise is to continuously increase housing supply, stabilise the property market, rebuild the housing ladder, attach importance to the functions of public housing, and promote social mobility.
Based on a robust econometric model, the committee projects that the total housing supply should range from 440,000 to 500,000 units in the next 10 years, and that the mid-point figure of 470,000 units be adopted as the supply target. The committee considers that the projection should not over-estimate or under-estimate the demand in a casual manner, but should be reviewed and adjusted annually in view of the prevailing policies and changes in the economic and property market conditions.
Furthermore, having regard to the supply-led strategy, and with public housing accounting for a higher proportion of the new housing production, the committee recommends adopting the ratio of 60:40 as the public/private split for the housing supply in the next 10 years. This is a clear signal to the community that the Government should attach greater importance to the role to be played by public housing (including rental and sales units) in future years in light of the high level of private housing prices and rents. Again, this ratio should be adjusted flexibly to cater for changes in circumstances.
Apart from the overall supply target, given limited land and housing resources in the near future, the committee has looked into the issue of priorities. Which groups have the most pressing needs now? They are the grassroots families and the elderly, especially those who are inadequately housed. At the same time, we should not overlook the housing aspirations of the younger generation. To give them hope for the future, we must establish an effective housing ladder and increase the production of HOS units beyond the number already pledged by the Government so as to help them achieve home ownership within their affordability. The committee has also suggested improvements to the Quota and Points system to progressively reduce the waiting time of the non-elderly singletons above the age of 35. There are several other recommendations relating to measures to ensure the rational use of public rental housing resources.
I will not go into the details of the consultation document here. You are invited to visit the website. You will find not only the consultation document, but also other useful references such as a detailed survey report on sub-divided units in Hong Kong, as well as a focus group study report where 22 groups of different backgrounds were asked to talk about their housing needs and views on housing related issues, including a group of professionals like yourself. Let me leave the pleasure of reading and surfing to you, and talk a bit more about two specific issues.
First, about what we should do with sub-divided units. For the sake of projecting the demand, although the committee has noted that depending on the actual living conditions, not all households sharing units with other households are necessarily inadequately housed, it has decided to count all those households as having housing needs which are not fully satisfied in the context of the demand projection. However, as revealed by the survey, some people have chosen to live in sub-divided units for various practical reasons, for example, convenience for travelling to the place of work or study. As such, sub-divided units situated in convenient urban locations may well continue to exist even if there is an adequate supply of public rental housing. Nevertheless, as far as the committee is concerned, the safety conditions of sub-divided units should under no circumstances be compromised. Hence the Government is urged to step up inspection and enforcement.
Some committee members have also suggested that the Government should explore the feasibility of introducing a licensing or landlord registration system for sub-divided units in domestic and composite buildings. This proposal has stirred up quite a lot of heated discussion in the community. Some push for the eradication of sub-divided units entirely, and some find merit in regulation. There are also those who urge for tolerance of sub-divided units in view of supply shortage. We still need time to find common ground among the many views expressed so far, but one thing seems clear, that is, the community will look to surveyors for professional views. Your views will carry a lot of weight in the overall discussion.
The second issue of particular relevance is the measures to increase housing supply. The LTHS will cover various strategies and priorities. However, none of them could be realised without land. At the end of the day, the construction of private and public housing on a massive scale hinges upon the timely planning and supply of land. As we all know, the conventional means to increase housing land supply, such as reclamation, has become increasingly controversial. There have also been increasing concerns on development density and conservation issues amongst the general public. But we don't have the luxury to stay on the fence and to hesitate in making some hard choices.
The supply challenge before us is indeed a huge one. It is estimated that Hong Kong will need to build the equivalent of one new town per decade, or three new towns roughly the scale of Sha Tin within 30 years. As I said to the media a few days earlier, in dealing with our housing problem, we should not confine ourselves to addressing the issue of quantity, but should also consider how to progressively improve the quality of housing. Our future new towns should broadly speaking be developed as self-sustained communities and in a balanced and holistic manner, with sufficient commercial or industrial activities, community facilities and local employment opportunities to enable the local community to flourish. This helps improve the quality of life for the residents in the whole area. At the household level, we wish to meet the aspirations in the community for a more spacious living environment. We need the community to reach a consensus about the necessary trade-offs in order to realise this aspiration. As professionals in the relevance fields, your expert advice on this rather complicated matter is much needed. Your inputs will also help to facilitate more informed public deliberations on the pertinent issues.
Our housing problem is a pressing one that demands immediate action without further delay. What we need urgently is a community consensus and determination to overcome the various constraints, and to set the appropriate priorities to solve our problem progressively. Admittedly, there are trade-offs and choices to be made, we need to bear collective responsibility and work hard to build a better future for our next generation. The title of the consultation document speaks for itself: "Building Consensus, Building Homes".
Ladies and gentlemen, having spoken at length on housing, I think I need to do justice to the "infrastructure" part of the theme of this conference by touching on a few of the important programmes that my colleagues and I are pursuing on the transport front of my portfolio.
As one of the world's most densely populated cities, Hong Kong faces huge challenges in providing a safe, efficient, affordable and reliable transportation system to meet the economic, social and recreational needs of the population. Every day, there are about 12 million passenger journeys on our public-transport network of trains, buses, minibuses, taxis, trams and ferries. This corresponds to about 90% of the total passenger trips, making Hong Kong one of the least car-dependent cities in the world. Priority has been accorded to the mass carriers, particularly railways and franchised buses. Railways carry over 40% of daily public transport passenger journeys and franchised buses 30%.
Currently, we are taking forward five railway projects at full steam to come on line before 2020. They are the West Island Line, the South Island Line (East), the Kwun Tong Line Extension, Sha Tin to Central Link and the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link. The new domestic lines can serve major concentrations of population and employment presently not linked to our railway system. Upon their completion by phases, our railway network will be extended by 30% as compared to now, covering areas inhabited by over 70% of the population.
Even as new railway lines are under construction, we are already looking further ahead - this year, we have consulted the public on major railway corridors and local enhancement schemes beyond 2020 in the review of our Railway Development Strategy. We aim to report to the public on the way forward on railway development next year.
We are also planning major road projects such as the Central Kowloon Route, and an extensive cycling track in the New Territories. A new "Universal Accessibility" Programme has been introduced to facilitate pedestrian access through adding lift towers to public footbridges.
At the same time, we are pursuing a mega project to enhance our road connection with the Western Pearl River Delta region in the form of the Hong Kong-Zhuhai-Macau Bridge. Upon completion in 2016, the Main Bridge will become the longest bridge-cum-tunnel sea crossing in the world, totalling 29.6km in length with 6.7km of underwater tunnel. This mega bridge is unprecedented in terms of scope, scale and complexity. With the connection by the bridge, the western Pearl River Delta will fall within a reachable three-hour commuting radius of Hong Kong.
We are also actively planning the third runway for the Hong Kong International Airport which is expected to be commissioned in 2023. The three-runway system can increase the airport's handling capacity to 97 million passengers, 8.9 million tonnes of cargo and 620,000 flight movements per year, which means double the current levels. The third runway project will no doubt create employment opportunities for skilled professionals, particularly during the planning and construction stages.
The institute and the Government have been close working partners for almost three decades. We have benefited from the wise counsel and professional knowledge of the institute in the course of building up Hong Kong. The input from institue has always been an important part of the continuous success of Hong Kong.
I am sure the conference today will provide useful insight from different angles on the role of infrastructure and property development in Hong Kong, not only on housing, but also on improving our global and regional connectivity, our intra-city mobility, and our all-round economic and social development. Let's work together on this place we call "home".
Secretary for Transport & Housing Prof Anthony Cheung gave this speech at the Hong Kong Institute of Surveyors Annual Conference 2013.
