Elephant in the Room

A single remark by a guest on a television talk show has enabled me to better understand one of Hong Kong’s great mysteries: why is it so difficult to make more land available for housing. So amazing was his remark that at first I thought I had misheard, or misunderstood, or he had misspoken. But confirmation came just a few days later in an entirely different forum from an impeccable source.

The talk show is hosted by Michael Chugani, a fellow columnist on this newspaper. The guest on that occasion was Shih Wing Ching, chairman of a free Chinese language newspaper, but originally better known as the founder of one of our top property agencies. Shih said that Hong Kong only set aside seven per cent of land for residential use, of which four was for urban housing, and three was for rural settlement. If just two of those three were switched across to urban housing, which is by nature more intensive, then we would have more than enough land to meet all our housing requirements.

‘Surely that cannot be correct’ would be a common first reaction. But by chance just a few days later confirmation came at a forum to examine development of the New Territories. To assist discussion, the Planning Department had prepared an information paper on land utilisation in the SAR as a whole and there were the actual percentages: private residential 2.3; public residential 1.4; rural settlement 3.2. So Shih’s remark, far from being in error, actually slightly understated the discrepancy.

Now of course not all of that 3.2 is suitable for conversion to intensive development as there will be some small pockets in very remote locations that should be ignored on practical grounds. But there is surely scope for a considerable amount to be reclassified.

There were two other extraordinary numbers given in the paper: Hong Kong has no fewer than 642 recognised villages, and 4,500 hectares of farmland, of which only around 700 is actively farmed.

The fact is Hong Kong is essentially a city. The experience of every other major city in the world – London, Paris, Tokyo, New York – shows that as they grow, they absorb the villages surrounding them. Indeed we don’t need international comparators, as elsewhere within China we have seen the same process in Beijing, Shanghai, Chongqing and other large conurbations. Farming also gets squeezed out to the periphery as urbanisation takes hold. Only in Hong Kong, apparently, do we have to pretend that the situation prevailing in 1898 is to be preserved for all time.

By now the elephant in the room of our housing situation should be apparent for all to see. It is the small house policy, and the fabled "rights" of our indigenous villagers. A typical small house is three storeys on a 65 square metre footprint (the legendary 700 square feet), which means a total of 195 square metres for a single dwelling. At a time when an apartment of one quarter that size in the urban area rates as a good home for a family of four, at a time when our developers are selling flats as small as 15 square metres to give prospective buyers a first rung on the property ownership ladder, this discrepancy is socially and politically unacceptable and unsustainable.

It was Herbert Stein, a one-time chairman of the US Council of Economic Advisers, who is quoted as saying "If something cannot go on forever, it will stop". But how can we stop the small house juggernaut?

The good news is that, contrary to common assertion, the Basic Law does not protect the small house policy, and indeed those two words do not appear in it. Article 40 says that "The lawful traditional rights and interests of the indigenous inhabitants of the "New Territories" shall be protected by the Hong Kong Special Administrative Region". This article is already subject to challenge because of the different treatment meted out to men and women, which is contrary to other legislation in Hong Kong. It also runs foul of Article 25 of the Basic Law itself which states "All Hong Kong residents shall be equal before the law".

How can it be legitimate for one group of people to obtain, at very low cost, a large residence whereas another similar group is expected to pay a king’s ransom for one a quarter of the size? How can it be right that one group, merely through birth, gets the equivalent of a Mark Six win, while many of our best educated and highly qualified professionals, even with a spouse of similar high income, will only secure a decent property through inheritance from a deceased parent?

We see before us a controversial effort by the government to extinguish a small group of villages occupied by non-indigenous residents at Wang Chau. What we actually need is a comprehensive policy which provides for the gradual extinguishment of all the villages in the New Territories when the land they occupy is needed to provide decent living accommodation for all the people of Hong Kong. It’s either that or reclaim our way south to the Philippines.