Is Chinese-style land reform the solution to Hong Kong’s housing woes?
- Given that property is viewed as an investment in Hong Kong, increasing land supply will not make housing more affordable
- Rather, Hong Kong needs systemic change and may have to choose between Eastern and Western approaches to land ownership
For years, environmentalists have championed “micro-living” as a way to reduce carbon footprints while optimising the use of space, quality of life and privacy. Hong Kong epitomises these standards.
However, micro flats in Western cities are more generous than the spaces Hongkongers live in. Worse, the majority here cannot even afford a micro flat.
How much more efficiently can we live? How did the idea of owning a home become a luxury, or become the yardstick by which we measure our well-being? To solve our housing problem, we need to understand what caused it.
About two centuries ago, most land was communally owned by traditional societies, higher sovereign powers or churches. Andro Linklater argues in Owning The Earth that, over time, this gave way to the idea of exclusive ownership of land, “the most creative at the same time destructive cultural force in the modern era”, closely tied to the concept of individual freedom and democratic government and institutions.
In the past 30 years, prices have held up despite major setbacks during the 1997 Asian financial crisis, 2003 Sars outbreak, 2008 global financial crisis, the social unrest in 2014 and 2019, and now the coronavirus pandemic.
This is not to suggest we abolish market economies or what is left of our democratic system, but we must realise that high property prices are the result of a social and economic system in which developers rightfully maximise their profits and control supply, and individuals are free to acquire any commodity they can afford.
Thus, we have a widening wealth gap between the affluent, who grow their property portfolios and reap profits, and the middle class and grass roots, who offer up those profits with both hands.
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This would be complicated, involving compensation settlements and potentially long legal battles. But it was suggested by Beijing because it is not so different from the Chinese concept of separation of land ownership and land use rights.
Land ownership is more ambiguous in mainland China, lacking a definite unitary concept of ownership or an exclusive relationship between the land and the owner.
While all land is publicly owned, Beijing has established land use rights for state-owned land in urban areas and land management and contract rights for collective-owned land in rural areas.
In extreme cases, land use rights could be nationalised. The best-case scenario is when the state and land users’ interests are aligned. If they are not, government ownership would prevail over a developer’s or individual’s rights, as this would be in the public interest.
President Xi Jinping’s declaration that, “Homes are for living, not for speculation” – echoed by mainland housing officials – is in conflict with many Hong Kong property owners. While nobody wants the housing crisis to continue, owners do not want their assets to depreciate or land to be resumed.
Housing might be one area where Hong Kong cannot enjoy the best of both worlds – Western and Eastern. Which would Hong Kong sacrifice for the common good?
Dennis Lee is a Hong Kong-born, America-licensed architect with 22 years of design experience in the US and China
