Room for private sector in subsidised housing, says housing committee
An already heated construction boom in public and private housing looks set to heat up further for building and foundation contractors if a housing committee’s recommendations get the nod from the public and becomes formal government policy.
The Long Term Housing Strategy Steering Committee delivered its long-awaited report for public consultation on Wednesday, recommending an average of about 470,000 housing units be delivered over the next 10 years.
There has been growing public discontent in recent years over high property prices and acute shortage of affordable housing.
The ratio of public to private housing should be set at 60:40, the report said, but this could be adjusted according the circumstances.
In particular, the committee further reaffirmed the role of the Home Ownership Scheme (HOS) in providing subsidized housing and called for its supply to be increased over the quantities already pledged by the government.
The report ran through a list of ways in which the housing supply could be increased, some of which have been already mentioned before in other public consultations, such as increasing the plot ratio.
However in order to realize the ultimate aim of providing more housing, the supply of land simply had to be increased, the report said.
That meant making a difficult choice of how to balance conservation with development such as that presented by reclamation and rezoning of green belts.
“This is necessarily a big challenge to the government. I believe the government will need to consider whether to adopt these figures on land supply and how to proceed,” the Secretary for Transport and Housing and committee chairman Anthony Cheung Bing-leung said at a press briefing.
According to the report, the government has enough land to meet public and private housing demand for the next three to four years but after that things were looking difficult.
“In fact, if the community cannot reach consensus on how to increase land supply, the long term housing supply in Hong Kong beyond the next ten years will be at risk,” the report said.
While the private sector had a role to play in providing private housing, the report also pointed out that private developers could be called upon to help out the public sector.
Private developers built HOS flats under the Private Sector Participation Scheme from 1978 to 2002 when the government caved into to demands to scrap it amid a severe property downturn.
There was also another scheme to provide subsidized housing, the short-lived Mixed Development Private Scheme from 1997 to 2002, that delivered only two projects, both of which were eventually sold as private units.
“The Steering Committee considers that the case for more participation from the private sectors should be revisited, and encourages the government to adopt new thinking in exploring ways to leverage on the private sector’s capacity in order to speed up housing supply,” the report said.
Apart from short term measures to increase housing supply such as rezoning of government, institution or community (GIC) zonings and redevelopment of existing housing estates, the report also went looked at some long term measures to increase supply of land.
These include reclamation, cavern development and new development areas, which have previously been raised by the government, as well as a review of deserted agricultural land in North and Yuen Long districts.
Four areas were identified for the farming land option: Kwu Tung South, Yuen Long South, Fanling/Sheung Shui area 30 and Kong Nga Po.
In a nod to the current stretched state of the construction industry, the report acknowledged that finding the manpower to build all that housing would be a recurring problem despite the best efforts of the Construction Industry Council in attracting more workers, especially younger ones, into the industry.
Construction companies have been busy over the past few years with public works contracts especially the large infrastructure projects such as the Express Rail Link as well as property development work for the private developers.
In 2012, the Housing Authority (HA) awarded public rental housing contracts and foundation contracts totalling HK$12.6 billion and HK$2.5 billion respectively.
China State Construction Engineering (Hong Kong), a subsidiary of mainland giant China State Construction International Holdings (3311) came first, in terms of value of HA contracts won, with HK$5.36 billion.
Hsin Chong Construction came second, with HK$2.86 billion worth of work followed closely by Yau Lee Construction with HK$2.83 billion.
Other companies that won HA contracts in 2012 include Gammon Construction, Hanison Building, Shui On Building Contractors and Tysan Foundation.