Hong Kong’s second-biggest public housing provider will get land at a cheaper rate from the government, as it tries to boost the city’s supply of affordable homes.
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The Housing Society, tasked with building 6,600 flats across Kowloon over the next seven years, will get one site intended for public rental housing at a nominal price of HK$1,000 (US$127), the Transport and Housing Bureau announced on Thursday night.
The price would normally be a third of the market rate.
The society will also get four sites earmarked for subsidised homes for sale, paying only a third of the market price, down from the usual half.
“The Housing Society, an important partner of the government, has been operating on a self-sustaining model to provide … homes for low- and middle-income families,” the bureau said in a statement.
“The government considers the revised premium arrangement will help reduce the financial impact on the Housing Society ... so that it can continue to provide affordable homes for rent and for sale and to redevelop old estate housings to fulfil society’s needs.”
As part of the measures to curb property rises under Chief Executive Carrie Lam Cheng Yuet-ngor’s administration, subsidised homes are priced under a new formula considering affordability and are sold at greater discounts.
This resulted in flats at a recent project by the city’s largest public housing provider, the Housing Authority, being sold for as low as 52 per cent of the market rate, to eligible families.
Lam has also decided to ramp up the supply target for public housing in the next decade. The split between public and private housing will be adjusted from 60-40 to 70-30.
The Housing Society welcomed the new premium arrangement, saying it was willing to help increase housing supply “when resources allow”.
Its chairman, Walter Chan Kar-lok, earlier cautioned that the new pricing mechanism and the new target would add to his organisation’s financial burden.
The land premium arrangement will cover five sites to be allocated to the society at the former Kai Tak airport – which will be developed into a tourism, sports and housing hub – and in the former Anderson Road Quarry. About 6,600 flats, for rent or for sale, will be built on the sites from 2024 to 2026.
Wilson Or Chong-shing, a lawmaker from the Democratic Alliance for the Betterment and Progress of Hong Kong, agreed the premium reduction was a good idea, and urged the organisation to reflect the discounts in its rents and sale prices.
But economist Andy Kwan Cheuk-chiu warned that the series of housing measures, including the premium reduction, would add to the burden on the treasury.
“When the government is selling fewer plots to developers under the new housing split, and granting sites more cheaply to the Housing Society, the land revenue is expected to drop,” Kwan said.
Noting the government’s huge plan to house more than 1 million people on land reclaimed around Lantau Island, he said: “The government needs to tell us where it can make up for the possible drop in land revenue and the huge reclamation costs.”