Hong Kong Running Out of Its Most Valuable Asset: LandPosted: July 20, 2016
In a city where land is everything, a housing crunch is brewing.
Annie Zheng reports: According to a new study by think tank Our Hong Kong Foundation, the amount of new, developable land in the former British colony is shrinking. Add in a growing population that will outpace the supply of new apartment units, and there’s a pressing need for the creation of more land, says the think tank, led by former Chief Executive Tung Chee-hwa.
“We see a substantial shortage in land and housing resources,” said William Tsang, senior researcher and author of the study. “The government is increasingly relying on changing the use of old land. This means the amount of buildable land is dwindling. When that runs out, what’s next?”
The study found that in 2012, 73% of the nine million square feet of public land for bidding was reclaimed land; by 2015 that had dropped to 50% of the 7.8 million square feet on offer. As a result, the government is relying more on selling converted forms of land, such as work sites, slopes and former staff quarters.
Public land sales in the form of 50-year land grants are a major source of revenue for the government and one way developers secure land on which to build. In recent years, a flurry of new developers including mainland Chinese have entered the bidding process as the government has put up smaller and more pieces of land.
Land is the city’s most precious natural resource and was historically controlled by a few tycoon families, writes Alice Poon in her book “Land and the Ruling Class in Hong Kong.”
“Land monopoly has enriched the few and impoverished the majority, thanks to land policies implemented under the colonial government,” she writes.
Most of the city’s over-seven million citizens live in cramped quarters…(read more)
Source: China Real Time Report – WSJ