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Land use a matter for the people

Updated: 2015-11-11 08:03

By Peter Liang(HK Edition)

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Chief Executive Leung Chun-ying has posed a question to the many environmentally concerned young people of Hong Kong. He asked them to judge for themselves the proposal to slice off parts of some country parks on which to build affordable housing for sale to young families which cannot afford the market price of homes.

It should be expected that many young people will agree that solving the acute housing shortage problem, which is pushing prices to levels fewer and fewer people can afford, should take precedence over environmental concerns.

To be sure, some property market analysts have predicted a sharp correction of property prices in coming months. But prices have stood firm because of pressing demand for housing, especially by young middle-class families, which has offset negative macro-economic factors including the impending interest-rate rise and the projected slowdown in growth in 2016.

The government has put housing at the top of its policy agenda. But increasing the housing stock in land-scarce Hong Kong calls for the making of difficult choices not only by the government, but, more importantly, by the people.

The key is to strike a balance between development for housing and open space. The various country parks were established to offset the hectic development of large areas in the city as well as rural land in the New Territories in the 1980s and 1990s. They were designed to provide Hong Kong people with an escape from the urban jungle in which they worked and lived.

Since then, the size of the population has increased but the demand of prospective home owners has largely been ignored in the years after the outbreak of the Asian financial crisis in 1997, which triggered a property market crash. The latest property price surge, fueled by the flood of cheap credit created by the loose money policies of the United States since 2008, obviously caught many people by surprise.

The government has produced a comprehensive and ambitious plan to increase the supply of housing in the next decade. The biggest challenge it must face is the availability of buildable land, which has always been in short supply in hilly Hong Kong. One of the least costly and time-consuming propositions is to develop parts of the country parks that are most easily accessible to the existing transportation infrastructure.

It is a trade-off that even the most ardent environmentalists and outdoor enthusiasts would find it hard to object to. But it is important to bear in mind that public land, including country parks, belongs to all Hong Kong people. It cannot be used in any way for the benefit of only some of the people.

For that reason, the assessed market value of the land culled from the country parks must be factored into the sales price of the homes which are built on it. In a free market the increase in supply will invariably bring down prices of properties, which are not an inelastic commodity. Subsidies are inherently unfair to the majority of families which are not qualified to buy those homes.

(HK Edition 11/11/2015 page7)

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