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Following is a question by the Hon Lee Wing-tat and a reply by the Acting Secretary for Transport and Housing, Mr Yau Shing-mu in the Legislative Council today (May 19):
Question:
The Government put forward its first long term housing strategy in 1987, published the Long Term Housing Strategy Review Consultative Document in 1997, and announced the White Paper on Long Term Housing Strategy in February 1998. Under the strategy, the Government assisted needy people in acquiring their homes through assessing housing demand and implementing the Home Ownership Scheme (HOS) as well as other housing schemes. Yet, the Secretary for Transport and Housing stated at the meeting of this Council on April 21 this year that encouraging the acquisition of residential properties was not a policy objective of the Government. In this connection, will the Government inform this Council:
(a) whether it has abolished the long term housing strategy; if so, of the reasons for that, and whether it has conducted any extensive public consultation beforehand in this regard; if it has not abolished the strategy, of the contents of the existing long term housing strategy;
(b) whether the authorities have conducted any assessment of the demand for private housing since 2003 and planned the land supply on the basis of the assessment outcome; if an assessment had been conducted, of the outcome; if not, the reasons for that, and how land planning work has been undertaken having regard to the supply of residential flats; and
(c) of the specific timetable and contents of the public consultation on the Government's subsidising home ownership to be conducted by the authorities in the coming five months?
Reply:
President,
My reply to the first part of the question is as follows:
(a) In January 1997, the Government published a consultative document on long term housing strategy (LTHS) to consult the public on the LTHS promulgated in 1987. In October of the same year, the Government announced major initiatives and new measures relevant to housing, and committed three pledges with specific targets:
(1) set a long-term housing target, in which starting from 1999-2000, to build not less than 85,000 public and private flats a year;
(2) achieve a home ownership rate of 70% by end-2007; and
(3) reduce the average waiting time for public rental housing to three years by end-2005.
In February 1998, the Government published the White Paper on "Long Term Housing Strategy in Hong Kong", which outlined a number of strategies to help achieve these three specific targets by assessing housing demand regularly, providing a sufficient supply of land together with supporting infrastructure, shortening development procedures, drawing up a long-term flat production programme, and implementing subsidised housing schemes to enable those in the relevant income groups to buy their own homes, etc.
In 2002, the property prices tumbled by over 60% against the peak in 1997, and the volume of transactions also showed a marked decline. The plunging net asset values in the private residential market had inhibited economic recovery and many owners found that their property values had declined, forcing some into a negative equity situation. To pump-prime the deflation-battered economy, the then Housing, Planning and Lands Bureau, under the direction of the Chief Executive, undertook a root and branch review of the Special Administrative Region Government's housing policy with a view to restoring the public's confidence in the property market. Before re-positioning the housing policy, the Government consulted widely among all stakeholders, including academics, the political parties, the Housing Authority, the Housing Society, representatives from various housing concern groups and resident groups.
The outcome of the review was that while the overarching objective of providing subsidised rental housing for families in need must continue to sit at the very heart of the Government's housing strategy, the Government should withdraw from its role as a property developer by halting the production and sale of subsidised flats and reduce radically its share in the overall housing production. The Government should also set in train highly focused measures to redress the serious imbalance between supply and demand, and to restore the confidence of the public and investors in the property market. To this end, the then Secretary for Housing, Planning and Lands made a statement on November 13, 2002 which set out measures to rationalise the housing targets. He also clearly stated what Government's role should be in future. The Government would no longer pursue the first and second targets above, but would retain the third target of maintaining the average waiting time for public rental housing at around three years. He stressed that the role of the Government was to provide rental housing to low-income households. The statement was intended to let all stakeholders and the general public have a clear view of the revised housing policy at that time.
The Government's housing policy remains that set out in the statement on housing policy made in 2002. Put simply, the policy covers three main areas:
(1) the thrust of the Government's subsidised housing policy should be to assist low-income families who cannot afford private rental housing through the provision of public rental housing;
(2) the Government's role should principally focus on land supply. It should also withdraw as far as possible from other housing assistance programmes to minimise intervention in the market; and
(3) the Government must maintain a fair and stable operating environment to enable the sustained and healthy development of the private property market. The Government should ensure an adequate supply of land together with the necessary supporting infrastructure to meet market demand. As regards the quantum of private housing production, this should be a matter for the market to decide.
These three areas mean that the public housing is provided to satisfy basic housing needs. Home ownership is driven by market forces. The Government does not compete with the private property market.
When the Government repositioned the housing policy in 2002, it was considered that both the economy and the property market had gone through great changes from 1997 to 2002. It was therefore unnecessary for the Government to continue to hang on to the long term target of achieving a 70% home ownership rate. Home ownership should be a matter of personal choice and affordability. I must stress that this does not mean that the Government disregards the home ownership needs of the public. The Government's role is to target the supply end, so that the residential property market could develop in a steady and healthy manner.
(b) Before replying to part (b) of the question, I would like to elaborate the areas of work of the Transport and Housing Bureau (THB) and Development Bureau (DEVB) in private housing.
THB is responsible for monitoring the development of the private housing market. To this end, THB would collect data on the private housing market, including the commencement and completion of private residential projects and units involved, and the expected volume of supply of private housing in the next three to four years. THB would regularly publish the relevant data for the reference of the public and departments. DEVB is responsible for providing stable and adequate supply of the land through effective planning and use of land.
The reply on the supply and demand in the private housing market is as follows:
On the demand for housing in the private market, we have consulted the Government Economist. Our experience revealed that the hard figures estimated by any model could not accurately quantify demand, especially demand in the private residential market which may be affected by many factors, including changes in social economic environment, such as market sentiment, liquidity and interest rate, etc which would have an impact on demand. It is very likely that any estimation would be very different from the actual situation. Hence, we repositioned the housing policy in 2002.
In relation to landuse planning and land supply, we have consulted the views of DEVB and their response is as follows:
Government's policy is to provide adequate land to meet the development needs of the community, and this involves long term planning work.
According to the Study on Hong Kong 2030: Planning Vision and Strategy released in 2007, it is anticipated that the existing built-up areas, including metro areas and new towns, can meet the land requirement for 70% of the population increase up to 2030, whereas the remaining 30% will be provided mainly by the two New Development Areas (NDAs). Therefore, the overall supply of housing land should be adequate to meet the needs of the projected population growth up to 2030.
The Government has, in accordance with the above development option, commenced the study for the NDAs in the North East New Territories (i.e. Kwu Tong North, Fanling North and Ping Che/Ta Kwu Ling); and will also commence the study for the Hung Shui Kiu NDA in the North West New Territories in due course. Besides, the Government will continue to conduct various planning studies and to review the land use in different districts for the purpose of identifying land suitable for residential use to meet social needs. For instance, in the Planning and Engineering Review of Potential Housing Sites in Tuen Mun East Area - Feasibility Study which was just completed, and the Planning Study on Future Land Use at Anderson Road Quarry - Feasibility Study which will commence in the latter half of this year, will meet the future population demand.
(c) My reply to the third part of the question is as follows:
As indicated by the Chief Executive at his Question and Answer Session in the Legislative Council on May 6, 2010, the Government's policy regarding the property market is to respond to market demand through the supply of land, of which the Application Lists System is the principal mechanism. This is supplemented by flexible improvement measures and land auctions from time to time to increase the land supply. Notwithstanding this, the Government is fully aware that the issue of using public money to subsidise home ownership is contentious and any change in the current housing policy would require the consensus of the public. In the light of this, the Government will, in the coming five months, consult stakeholders and members of the public, and listen to their views on this issue.
As a start to this process, the Government consulted the Housing Authority (HA) on revitalisation of the Home Ownership Scheme (HOS) Secondary Market at the Subsidised Housing Committee meeting on this Monday. On the other hand, whether or not the Government should subsidise home ownership involves a number of considerations. In the next few months, we will widely consult the stakeholders and the public through channels such as consultation sessions, focus groups and the Internet.
The consultation materials for this important subject are being prepared to facilitate a focused discussion. Consultation work is expected to take place between late May and mid-September. The outcome of the consultation exercise will be submitted to the Chief Executive.
Ends/Wednesday, May 19, 2010
Issued at HKT 14:32
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