Page 5 - LanHse_Part1_Subsidized_eng

1. Introduction

In the words of Chief Executive CY Leung, housing is a major focus of
the current-term Hong Kong Special Administrative Region (HKSAR) Gov-
ernment while tackling the housing problem is the top priority.

The housing problem is not only about housing matters, but is also
at the crux of political and economic issues. "Capital in the Twenty-first
Century", a recent publication by the French economist Thomas Piketty
which has generated widespread interest and discussion, draws atten-
tion to the fact that land and housing is the central issue faced by each
and every modern-day capitalist society.
In addition to the traditional approach of continually coming up with
new land and housing supply, revamping the current public housing
model is a more effective solution to Hong Kong’s housing problem in the
short term.

Apart from meeting the housing demand
of the general public, the “Subsidized Home-
ownership Scheme” (“the Scheme”) serves to
satisfy their need for homeownership.

In a society where half of the population are home owners while the
other half are not, ever-rising property prices will only have a decidedly
divisive effect economically, socially, psychologically, and politically. Lack of
shared interests among the general public will also make effective gover-
nance even more difficult to achieve. The Scheme is likely to help all as-
piring home owners to realize their dreams by providing low-income fam-
ilies with a chance of homeownership. This will create access to upward
social mobility and unify public interests, so that, without relying solely on
Government subsidy, the low-income families can focus their efforts on
increasing their productivity, thus bridging the wealth gap in society.

In terms of utilization of public resources, if public housing units can
be gradually privatized, and the land value can thus be unlocked, the Gov-
ernment will be able to recover in part the value of public land resources
to benefit the community at large by meeting ever-rising public expendi-
tures as a result of the ageing population.

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