Just how to resolve these conflicting agendas will now be Lee’s problem. Given that Beijing had repeatedly also said housing was a deep-rooted issue and the source of public unhappiness, analysts and lawmakers alike are watching keenly how Lee intends to untie this Gordian knot – finding enough land and speeding up the building of new homes.

Lee’s first chance to deliver will come on Friday, as he plans to unveil his election platform focusing on housing, care for the elderly, technology, youth development and civil service reform, among other topics.

A preliminary check with sources on his manifesto suggests the city’s former No 2 official will aim to address housing and land issues based on his “new ideology” of a results-oriented approach. But sources said he would aim to build mostly on existing projects amalgamated from the playbooks of previous chief executives, rather than propose groundbreaking ideas.

Lee offered hints in a Facebook post on Wednesday, saying the key focus on housing was to “speed up construction and boost supply”, as he could see “everyone is very concerned about housing issues”.

He wrote: “We must take a multipronged approach and compress the housing construction process. We have discussed for too long ways to identify land and build houses, and it is time to take action. Only by doing this can the public’s plight be relieved.”

Sources said a special task force would be set up in the new government overseeing interdepartmental coordination to expedite the acquisition of land and compress building programmes to boost supply in the short term. Such an approach would echo Lam’s plan outlined in her last policy address.

“Lee will highlight the importance of simplifying the planning process for providing land for building residential flats in an attempt to ease the housing crunch,” a core campaign team member said.

Beijing heavyweight Tam Yiu-chung, Lee’s campaign office director, told the Post that, unlike his predecessors, Lee would only provide an overall policy direction, concept and vision in his platform, and would not go into great detail. The actual plans would be in his maiden policy address, Tam said.

Lawmakers and developers reckoned that short-term measures for streamlining procedures were about offering “a solution when there are not many other solutions”, adding that it was too early to say whether the specific initiatives would be better than those offered by Lee’s predecessors.

But unlike previous leaders, Lee will not set hard targets such as building a certain number of homes each year or reducing the average waiting time for applicants for public rental flats. He will only propose to allow eligible tenants to move into new public blocks earlier while other structures at the same estate are still under construction.

“This may allow residents to live in better conditions, instead of subdivided flats, months or even a year earlier, based on a preliminary assessment,” a source added. Currently, the construction of a public housing project takes three to four years to complete, but if infrastructure such as roads is not available, the process will take a few more years.

Lee on Sunday said he hoped to “achieve results” instead of “solely chanting slogans”. The former chief secretary said he understood housing was the key to solving many other issues in the city, including alleviating poverty and ensuring better resource allocation.

The metropolis plan aims to turn parts of rural areas near the border with Shenzhen into an economic and residential hub housing 2.5 million people, while turning the San Tin area into a “technopole” – or hi-tech cluster – spanning more than 1,100 hectares.

An unresolvable top priority?

Beijing has long singled out housing as a “deep-seated social issue” plaguing Hong Kong. In 2019, state media even said the difficulty young people faced in affording homes and the lack of social mobility were a “root cause” of the anti-government protests. An even more direct indication of the central government’s impatience came last year when Xia Baolong, director of the Hong Kong and Macau Affairs Office under the State Council, urged the city to “bid farewell” to substandard subdivided flats and cage homes by 2049.

Lee’s performance on the housing front will therefore come under the microscope. The pressure will be considerable, given how all his predecessors since the 1997 handover had not been very successful in addressing the issue. While they were undermined by external economic factors, internal political struggles, local objections and red tape also played a part in thwarting their plans.

10:08

Hong Kong has until 2049 to fix its housing crisis, but is it possible?

Hong Kong has until 2049 to fix its housing crisis, but is it possible?

Drawing lessons from the Singapore experience of engendering a sense of rootedness through home ownership, Tung Chee-wah, the city’s first chief executive, announced an ambitious programme to build 85,000 flats a year and a target to boost the population’s home ownership rate to 70 per cent.

But the Asian financial crisis, which led to property prices slumping by as much as 70 per cent, forced Tung to call off the plan quietly in 2000.

Tung’s successor, Donald Tsang Yam-kuen, was anxious to stabilise the property market and halted all land supply measures. While homes became cheaper after the financial crisis and short-term supply appeared sufficient thanks to Tung’s programmes, the years of inaction paved the way for the housing crisis that would eventually surface towards the end of his term.

Inheriting the bleak situation, Tsang’s successor Leung Chun-ying pursued quick solutions to boost land supply by turning dozens of green belt plots around the city over to housing use and further suggesting developing the fringes of protected country parks.

But the “not-in-my-backyard” mentality in neighbourhoods slowed down the land repurposing process, while filibustering by opposition politicians in the legislature delayed plans to secure funding to build new towns and start feasibility studies on reclamation. The monetary policies of the US, influx of capital from mainland China and keen local demand for homes, meanwhile, continued to push prices skywards.

Lam, opting for what she described as a more “sustainable” approach, proposed the Lantau Tomorrow and Northern Metropolis projects, the most ambitious housing plans in more than a generation.

While she claimed she had succeeded in identifying land to meet the housing demand for the next decade – two-thirds of it only available from the sixth year – her critics felt the two projects kicked the can down the road and did nothing to ease the crunch in the short to medium term.

The latest average waiting period for public housing is now double the three-year pledge met by the previous governments between 2003 and 2014. At six years, it is the longest reported wait time since 1999, with nearly a quarter of a million applicants on the list.

Local properties remain the least affordable of major cities, with the housing price-to-income ratio rising to 19.8 in the last quarter of 2021 from 16.6 in mid-2017, according to a report by the Hong Kong Monetary Authority, which means a household has to save 19.8 years of its annual income without any consumption to pay for a standard flat.

Insiders said Lee was very likely to continue with major land and housing policies initiated by Lam given there were limited options, but he would shepherd a radical shift in management style to enhance workflow among civil servants and shorten procedures.

He also would give up controversial initiatives such as Leung’s country park ideas, sources said. Neither would he opt for building temporary homes, an initiative championed by Lam to ease the public housing crunch in the short run.

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Lawmaker Tse Wai-chuen, also a delegate to the Chinese People’s Political Consultative Conference, the nation’s top advisory body, said previous governments had always tried to address housing problems with “big projects” without tackling “internal restrictions”.

“Previous chief executives stressed to boost supply in the second five years, while they were not in tenure after the first five years, resulting in poor performance on housing issues,” he said. “People would monitor closely on whether Lee could do a better job … I believe he will try his best.”

Tse said reforming the overwrought procedures taken by departments when dealing with a project, especially from private developers could be a big breakthrough, given how there were “not many other short-term solutions”.

“A project could be stuck for months or years only because of departments asking for redoing of architectural drawings and land leases due to minor changes,” he said, citing these examples of bureaucratic inefficiencies.

Getting developers on board

The several major developers in Hong Kong, sitting on huge reserves of farmland in the New Territories, have a decisive hand in land ownership. They are almost always the default stakeholders in any plan by the government to build new towns.

Since being shamed by state media in 2019 for “hoarding land” and contributing to the social unrest, developers have become more responsive to the city government’s call to help tackle the land shortage issue. Some have supported a transitional housing scheme to build homes for low-income groups. A few have shared their land to build public housing. But their participation is still seen as limited by many in the pro-Beijing bloc.

Some have urged the government to seize some of the developers’ land to build public housing, but Lam has said private property rights have to be respected under the Basic Law.

As the sole candidate approved for the May 8 poll, Lee has brought on board all the city’s richest tycoons as his campaign advisers: CK Hutchison founder Li Ka-shing, Henderson Land Development founder Lee Shau-kee, Sun Hung Kai Properties chairman Raymond Kwok Ping-luen, Wharf Holdings chairman Peter Woo Kwong-ching and New World Development chairman Henry Cheng Kar-shun.

Whether they can be made to do more – by persuasion or diktat – will be a key challenge for Lee’s administration. In their virtual meetings with Lee earlier, two second-generation tycoons gave some clues they were willing to play ball. Martin Lee Ka-shing, the co-chairman of Henderson, expressed a willingness to “cooperate with the government in boosting housing supply”. Adam Kwok Kai-fai, executive director of Sun Hung Kai, suggested the government could push ahead with turning farmland into new towns.

Lau Siu-kai, vice-president of the semi-official Chinese Association of Hong Kong and Macau Studies think tank, said he expected Lee to initiate more aggressive policies for land acquisition or resumption, and possibly force developers to earn less when selling properties.

So far, Lee has not addressed the future relationship between his government and developers.

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“Developers have no choice as they know well how the central government is treating giant enterprises and businesses on the mainland to avoid the monopolies of certain sectors. They do not want to be targeted,” he said.

“It is also their responsibility as they are part of Hong Kong, while Beijing had specified that housing woes were some deep-rooted problems that must be solved.”

Stewart Leung Chi-kin, executive committee chairman of the Real Estate Developers Association of Hong Kong, insisted to the Post that developers were always willing to work with the city’s leaders. He said he had submitted to Lee suggestions on behalf of the organisation, but stopped short of disclosing the details.

Commenting overall on land policies since 1997, Leung said governments had not been “thorough enough”, and the “complicated structure within the administration had worsened the problems”.

“It took a lot of years to go through the procedures. We gave the same recommendations to Lee’s government and I believe he will take into account our ideas,” he said.

Infighting or synergy?

Since Lee announced his bid for the top job earlier this month, pro-establishment parties, lawmakers and developers have been sending in ideas to him, while his campaign office has also encouraged civil groups to grasp “the last chance” to submit written policy suggestions before he unveiled his platform.

Among the city’s think tanks backed by different political heavyweights, the one founded by the city’s first chief executive Tung, Our Hong Kong Foundation, has been playing a key role in contributing ideas on housing initiatives for Lee’s platform, according to a politician close to his campaign office.

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Foundation deputy executive director Stephen Wong Yuen-shan, also a lawmaker, took leave and is assisting in his personal capacity as a chief writer of Lee’s housing policies, integrating proposals raised by different stakeholders, including Leung and Lam’s policies.

Wong is also serving as one of the 16 deputy directors of the campaign office, while representatives of the One Country Two Systems Research Institute, a think tank co-founded by former city leader Leung, are noticeably missing – a line-up the insider read as “a signal of Leung’s camp being sidelined”.

Leung wrote on his Facebook on Tuesday that “solutions to social problems have to be concrete” as he renewed his call to build 25,000 public housing flats and a home for the elderly with 2,000 beds on the edges of Tai Lam Country Park.

On Wednesday, Leung told the Post he would not be drawn into questions of whether his camp was being sidelined.

Ryan Ip Man-ki, head of land and housing research at the Our Hong Kong Foundation, agreed the top priorities of the next government should be expediting the processes of sourcing land and boosting supply in the coming five years.

Citing recommendations made by his think tank in January, Ip highlighted the idea of bringing private developers back to the process of subsidised housing construction – a long-standing practice that was dropped in 2002.

“Developers are faster than the Housing Department as the latter usually involves more procedures in outsourcing to contractors. It’s good to enlist developers’ help as they are now more forthcoming in helping solve the housing problem,” he said.

Lawmaker Scott Leung Man-kwong, also chairman of the Federation of Public Housing Estates, urged Lee to set out road maps to shorten the wait for public housing flats by half and relaunch the Tenants Purchase Scheme terminated in 2005, which allowed residents of public rental housing to buy their flats at massive discounts.

“Problems of bureaucracy stood out in this government term that undermined efficiency, with all the red tape and conflicts between departments,” he said. “We will allow a few months for him to work with his cabinet and tell us concrete solutions in his first policy address.”

A platform too vague?

On his campaign trail, Lee has been repeating his three areas of focus that he pledged when he announced his bid for the top post: shifting to a “result-oriented approach”, boosting Hong Kong’s competitiveness and reinforcing the city’s foundation, such as its rule of law and its long-term stability.

Tik Chi-yuen, the city’s sole non-establishment lawmaker, said Lee had so far been guilty of precisely what he wanted to avoid, which was sloganeering, as the three areas were too unclear to function as a comprehensive plan for governance. Would the manifesto provide more details, he asked.

“When he highlighted the importance of ‘result-oriented’, how exactly will he do that?” Tik said.

Brian Wong Shiu-hung, a member of Liber Research Community, a civil group concerned with land policies, said judging from the measures revealed to the Post by sources so far, the platform “sounded rather loose”.

“For example, the sluggish supply in public housing lies in land sourcing, shortage of manpower and site engineering, rather than the building construction process itself. I wonder how moving in residents to a construction site earlier will help speed things up?” he said.

Wong was alarmed at the idea of further simplifying planning processes, arguing that Lam’s current proposal to cut short public consultations had already sparked controversy.

“If you just impose the kind of ‘results’ you want, that is, building more flats without listening to the community, you won’t have a good result, in terms of pollution, traffic congestion, forced clearance and so on,” Wong said.

Proposal to boost Hong Kong land supply may cut process but limit public input

He also said Lee should revisit the property vacancy tax, a plan Lam abandoned, to ensure more efficient use of housing.

A source close to Lee’s campaign team, however, defended the former minister, saying compared with Leung and Lam, he had limited time to prepare for the election campaign and platform, and “Lee does not want to make empty promises”.

“The public should give him more time,” the source urged, echoing campaign director Tam.

“Once he is elected, Lee will discuss the work goals with the new team. It is not appropriate to set too many targets at this time. We are sure he will be able to deliver in his first policy address.”

Additional reporting by Gary Cheung and Olga Wong