Opinion | How to get Hong Kong humming again---with a single stroke
By Philip Yeung, university teacher
PKY480@gmail.com
With political insanity off the streets, Hong Kong gets its second wind to find its old magic and mojo.
But to do so, it must first exorcise one demon that has possessed the soul of the city. I am talking about housing, the single most encompassing issue facing its leadership.
For over two decades, Hong Kong was living in an economic straitjacket. Once upon a time, Hong Kong was the freest of economies, with rags-to-riches stories aplenty. But its fairytale came crashing to an end, thanks to the dark deeds of one man—Donald Tsang. Tsang did pay for his sins when he was jailed for 10 months, although the verdict on his misconduct was subsequently overturned by the Court of Final Appeal. If you ask me, he deserves to rot in jail for the rest of his life. What he did might be borderline illegal, but it was incontestably immoral.
Those of us old enough can remember a time before Tsang, when housing was affordable. But this shameless worshipper of all things British, borrowed a rule from Margaret Thatcher’s playbook, the so-called myth of “little government, big market”. He followed it to the hilt and went overboard. He stopped public land sales, suspended the construction of public housing, sold residency rights to any non-locals for the purchase of a HK$6 million property—sheer lunacy in one of the most overcrowded cities in the world, leaving its residents at the mercy of speculators. Overnight, with supply choked and demand exploding, property prices went sky-high. Hong Kong became a real estate speculator’s paradise. Since then, real estate has eaten Hong Kong alive. Without rent control, entrepreneurs work for the landlord. In a typical 3-year contract, the first year is a financial struggle, the second a break-even year, and profitability arrives only in the third year, but by then the greedy landlord typically hikes the rent by 50% or more, wiping out the margins. Many businesses choose to relocate, but the premises must first be stripped bare---an environmental disaster for ever-bigger landfills. This also explains why Hong Kong will never again produce another Li Ka Shing, a hero from zero. Profitable entrepreneurship is dead. The city became the most unaffordable, with its misery index through the roof. What Tsang did was not just keeping the government small, he grotesquely and dangerously distorted the market.
Tsang has a legacy of notoriety. Thanks to him, we now have cage homes, nano-flats, coffin homes, and the euphemistically named “subdivided flats”, plus a growing army of the homeless and Mac-sleepers or Mac-refugees---that is, the homeless who take shelter in 24-hour MacDonald outlets. The names stink.
There are other fallouts. While high rent saps Hong Kong’s entrepreneurial energy, attracting talents to the city becomes problematic. University graduates from the north would rather return to the mainland than eke out a hand-to-mouth existence here. The picture of a doctoral student cooped up in a windowless, stifling subdivided unit went viral across China.
Hong Kong is the only city on earth where real estate agents are treated as daily VIP guests on TV, presenting themselves as gurus, pontificating on the property market. It is utterly ridiculous.
Obscenely, high-paid civil servants became addicted to real estate speculation, including Carrie Lam’s assistant and her disgraced husband--- the power couple raked in $23 million from flipping flats over a 10-month period. They were moonlighting as flat-flippers.
As for Tsang himself, he was too busy hobnobbing and clinking glasses with developers and tycoons. I recall being invited to dinner at the Hong Kong Club by a tycoon. When I said that the red wine was divine, his assistant chimed in: “This is nothing. You should have seen the vintage wine we served Sir Donald the other day.” This son of a poor policeman, with just a high-school education, has developed an expensive taste and a distaste for the poor. When Tsang left office, this man from a humble background had a wine collection sold on the cheap for two million dollars. You can imagine the thousands of hours he whiled away being wined and dined by big developers and an assortment of the super-rich.
There are two good Chief Executives in Hong Kong—Leung Chun Ying and the current leader Lee Ka Chiu. Both are men of action; both want to right social wrongs. Mr. Leung, unfortunately, was hamstrung by opposition from vested interests in the property sector and filibustering activists in the legislature. Even after leaving office, Leung proposed building 30,000 new public housing flats at the fringes of Tai Lam Country Park. Mr. Lee, the incumbent, now has a free hand in undoing the grievous damage done by Tsang. Tsang did Hong Kong in socio-economically. Lam did Hong Kong in socio-politically. Tsang belongs in an orange jumpsuit, while Lam belongs in the political doghouse. Both are sinners of a thousand years.
What’s next for Hong Kong? It must cast out the curse of housing. As President Xi resolutely and correctly declares: “Housing is for living, not for speculating.” Had Tsang adhered to this sound principle, Hong Kong would not have endured two lost decades that discredit one-country-two-systems, with a dangerous spillover over Taiwan. The ill deeds of local leaders have far-reaching global consequences.
The city has debated long and hard about finding land for housing. Reclamation is neither economical nor sensible. Over three quarters of land in this overcrowded city are country parks. Out of 1108 square kilometers, residential use only takes up 77 square kilometers. To me the ethical choice is clear: fringes of country parks are not sacred land when people are suffocating in coffin homes. Country parks are middle-class obsessions. Fully 70% of the land on Landau is country parks—don’t tell me they are all untouchable. Don’t forget there are also 730 hectares of land on brownfield sites. Housing should come before hiking. We don’t have another two decades for dilly-dallying.
The views do not necessarily reflect those of DotDotNews.
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