Chief Executive Carrie Lam introduced six new policy measures on Friday to tackle Hong Kong’s perennial housing crisis. They include a tax on new flats which have been left vacant, delinking the price of subsidised sale flats from market prices, and reallocating nine land sites from private use to public use.
Lam said at a Friday press conference that housing is “the most complex challenge” of her administration, but the new measures will help make flats more affordable for first-time homeowners.
“The goal of our policy is property ownership. We aim to build a property ladder for families with different incomes, and reignite their hope for buying property,” Lam said.
Lam announced that subsidised sale flats – flats made available under various schemes by the Hong Kong Housing Society – will use a different set of calculations to determine their prices. Citing 2017 market prices, Lam said the effect of the new calculations will result in a flat being sold at 52 per cent of market price, instead of the original 70 per cent.
Lam said that this change will “delink” the price from market trends, so that families will not be left behind by ever-rising housing prices. She added that the formula will also be tweaked so that it uses a more favourable figure for median family income.
Lam also announced that a fee will be imposed on newly built flats which are left vacant – typically by developers seeking to maximise profit – for a year or more. The fee will amount to 200 percent of the rateable value.
Lam said that there are currently around 9,000 vacant flats, and they should be released to the public to satisfy market demand.
Nine sites, located in Kai Tak and Anderson Road, have also been newly earmarked for subsidised housing. Lam said they were originally intended as private flats, but the new policy will provide around 10,600 subsidised apartments.
Lam’s remaining new policies involve tackling pre-sale tactics by land developers, the “starter home” pilot scheme, and greater support for temporary housing.
Lam conceded that her six proposals are interim measures, since they do not tackle root causes of the crisis such as land supply.
“It is true that under this set of policies we don’t aim to rein in the housing market, but that doesn’t mean I don’t have other options to use,” Lam said. She added that she hoped various stakeholders would participate in the ongoing land supply debate to find long-term solutions.
‘No political reason’
Lam faced criticism from pro-democracy lawmakers who said she was deliberately delaying the announcement to coincide with the weekend’s Handover anniversary. On Thursday, lawmaker Eddie Chu warned citizens not to be “tempted” by Lam’s housing benefits, and urged them to join the annual July 1 pro-democracy march to reflect their concerns.
At the press conference, Lam dismissed claims that her timing was political.
“Why choose to announce today, on the last working day before July 1? There is no political reason at all… Our administration’s policy over the past 12 months has been, we will announce something when we are prepared,” Lam said.
Directly after Lam’s press conference, lawmaker Alvin Yeung said the Civic Party supported a vacancy tax but Lam’s proposal was not strong enough. Lawmaker Jeremy Tam also expressed concern that the reduced price of subsidised housing would lead to a surge of new buyers.