Hong Kong's Carrie Lam pledges more affordable homes

Incoming chief executive Carrie Lam (above) said she will launch the "Starter Homes" scheme as promised in her election manifesto. These homes will be priced above those under the current home ownership scheme, but will come under the private market.
Incoming chief executive Carrie Lam said she will launch the "Starter Homes" scheme as promised in her election manifesto. These homes will be priced above those under the current home ownership scheme, but will come under the private market.PHOTO: BLOOMBERG
Incoming chief executive Carrie Lam (above) said she will launch the "Starter Homes" scheme as promised in her election manifesto. These homes will be priced above those under the current home ownership scheme, but will come under the private market.
Incoming chief executive Carrie Lam (above) said she will launch the "Starter Homes" scheme as promised in her election manifesto. These homes will be priced above those under the current home ownership scheme, but will come under the private market.PHOTO: BLOOMBERG

Tackling housing woes will be high on the new leader's agenda when she takes office in July

HONG KONG • As home prices notch up another record in Hong Kong, its incoming leader Carrie Lam has vowed to push ahead with a scheme to build affordable homes for Hong Kongers.

Mrs Lam told a radio show yesterday that one of her priorities after assuming office in July would be to launch the so-called "Starter Homes" scheme as promised in her election manifesto.

The scheme is aimed at helping middle-class families realise their dreams to own a home in the world's most expensive housing market.

The Starter Homes project is aimed at helping Hong Kongers who are too wealthy to apply for public housing but unable to afford a private flat, she has said during her election campaign.

Since her election last Sunday, the city's first woman to be elected chief executive has signalled her determination to solve the city's perennial housing woes.

  • Ways to create more homes in Hong Kong

    USE OF ABANDONED FACTORY

    An abandoned 50-year-old textile factory in Sham Tseng near Tsuen Wan district was turned into housing for low-income families last October, reported SCMP. The five-storey building was leased by the government to a social enterprise for six years for a token fee of HK$1 (18 Singapore cents).

    Rent ranges from HK$3,000 to HK$5,000 a month.

    'SPACE CAPSULE PODS'

    A Hong Kong landlord grabbed international headlines last year when he offered "space capsule pods" for rent.

    The pods, manufactured in Guangzhou and modelled after those found in Japan's capsule hotels, are leased out for between HK$2,800 and HK$4,500 a month. Tenants share a kitchen and bathroom, a relatively common arrangement in the city.

    'SHIPPING CONTAINER' HOMES

    The Hong Kong Council of Social Service, a federation representing at least 400 NGOs, has suggested turning shipping containers into temporary housing for those waiting for a public flat, reported SCMP last October.

    The container homes can be sited in abandoned carparks or under flyovers. A Dutch company has built thousands of such homes in Amsterdam and abroad.

In her victory speech last Sunday, she vowed to tackle the high cost of housing by increasing land supply.

Two days later, she told a Credit Suisse investment conference she was "very determined" to tackle the high cost of housing.

"On the land issue, I am very determined to tackle that in the next term of government in a big way," she told the gathering of 200 financial and business professionals.

Home prices in Hong Kong rose for the 11th consecutive month in March to an all-time high. This was despite the government raising stamp duty for the second time in three years last November to 15 per cent, in an effort to curb market speculation and soaring real estate prices.

Mrs Lam, 59, admitted that efforts to suppress Hong Kong property prices have failed.

The private property market was out of the reach of ordinary Hong Kongers, she said. "In the meantime, money keeps flowing in from other places - from London, from New York," she said yesterday.

"I'm afraid it may not be feasible to suppress prices. And doing so further will have side effects… So providing more public housing will be the key."

She also proposed a "public-private partnership" scheme, which would see developers instead of the Housing Authority pay the construction costs of public housing projects.

She said there would be one or two larger plots in this year's land sale programme that might be suitable for the Starter Homes scheme, reported South China Morning Post yesterday.

The Chief Executive-elect, formerly the city's chief secretary, also hopes to reach a city-wide consensus on how best to increase Hong Kong's land supply.

She said the public will be asked to consider options such as land reclamation from the sea, developing country parks or brownfield sites.

The cost of housing is one of Hong Kong's biggest social issues, and making homes more affordable was among outgoing leader Leung Chun Ying's top priorities. It was also a source of discontent for the thousands of young Hong Kongers who joined the 2014 Occupy Central street protests.

In a note dated March 27, Citigroup said another round of new cooling measures on the home market could be imminent, reported Bloomberg.

The Hong Kong Monetary Authority has warned banks in the city over the rising risks of property lending, according to the Oriental Daily, citing unidentified people.

A version of this article appeared in the print edition of The Sunday Times on April 02, 2017, with the headline 'HK's Lam pledges more affordable homes'. Print Edition | Subscribe