John Lee policy address 2023: record 410,000 new public flats in Hong Kong, shorter waiting time over next decade

Lee devoted part of his second policy address to housing issues, and aside from updates on public flats and tiny homes, he also announced moves to put more new private housing on the market.

The government had earlier identified enough land to satisfy projected demand for public housing over the next decade, but most flats would only be ready in the second half, with supply expected to increase gradually every year.

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Last year, the administration said 360,000 public flats would be available between 2023-24 and 2032-33, with only 128,000 built in the first half of the decade.

Of the 410,000 homes announced this year, 142,000 would be completed in the first five years, 9 per cent more than announced in 2022.

Lee’s administration maintained its pledge to cut the waiting time from the current 5.3 years to 4½ years by 2026-27.

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Towards that goal, 30,000 government-built temporary flats would become available in batches from 2024-25 for families in the queue for more than three years.

The task force on subdivided flats, led by Deputy Financial Secretary Michael Wong Wai-lun, would set a minimum standard for shoebox homes in 10 months and recommend ways to eradicate substandard ones in an orderly way.

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Meeting the media to take questions on his address, Lee said: “Over the years, there have been no comprehensive measures to tackle the issue. We hope to take a step forward to tackle substandard subdivided flats.”

He did not set a deadline for ridding the city of such homes, but Beijing’s top official on Hong Kong affairs, Xia Baolong, has said the city should “bid farewell” to subdivided flats and “cage homes” by 2049.

A government source said the work done by the task force would be the first step towards eliminating substandard homes, but the authorities would also have to wait for more public housing to take in tenants asked to leave their tiny living spaces.

Lee also announced measures to help Hongkongers from the lower-to-medium income group to buy second-hand subsidised homes by extending the mortgage default guarantee of subsidised flats from 30 to 50 years.

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With this measure, around 98 per cent of the city’s 352,000 subsidised flats would have a guaranteed mortgage default guarantee period of at least 10 years during which the government would pay off the loan for residents unable to do so themselves.

On new private homes, the authorities conceded after a series of failed land sales this year that supply was unlikely to meet the annual target.

They estimated demand for 132,000 flats over the coming decade, whereas the land available over the next five years would provide only 80,000 homes.

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Lee said in his speech that the Urban Renewal Authority would be given financial and planning leeway to build more private homes through redevelopment.

It would explore a new way to accelerate large-scale urban redevelopment by the end of next year.

Aside from considering using part of the Kau Yi Chau artificial islands to house residents affected by urban renewal projects, authorities would also lower the threshold of support required from owners for compulsory sales to proceed, allowing landlords to go ahead with redevelopment plans.

According to an insider, the support threshold could be as low as 65 per cent for buildings aged 70 years or older. That threshold could also apply for buildings aged 60 to 69 years if they were in designated renewal areas with numerous old buildings.

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A government source said authorities had decided to approve a few applications from developers interested in partnering with the government to offer subsidised homes.

There was little progress after the scheme was announced early this year. Under it, developers would build homes priced at 65 per cent of the market price on their plots with a discounted land premium.

Anthony Chiu Kwok-wai, executive director of the Federation of Public Housing Estates, said he hoped the government could speed up building flats and shorten the waiting time to three years.

The Concerning Subdivided Units Alliance, a group working with tenants of tiny flats, said the government should set a deadline for eradicating substandard housing as soon as possible.

It also suggested capping the rent of subdivided flats to protect poor people living in them, but a government source said that would be hard to do.