No. of view:9850
Land and Housing Policy Ideas for the Next Five Years (III)
 
Richard Wong
SBS JP
22nd April 2017

The housing malaise in Hong Kong is often seen as a problem of demand growing faster than supply. Government policy aims to (1) manage demand by discouraging transactions through high stamp duties and mortgage down payments in the shorter term, and (2) increase housing supply by finding as much land as possible and squeezing as many units into every development site in the longer term.

 

Accordingly, the housing malaise is interpreted as a straightforward problem of insufficient housing units. This appears to account for why existing housing units in the private sector are being sub-divided to meet the excess demand and the waiting time for public sector units has lengthened. Such an approach assumes that once enough public and private housing units are built, the malaise will disappear.

 

But this logic may be flawed because in Hong Kong we have long had two housing sectors: a private market sector and a public non-market sector. Today they respectively house 53.5 per cent and 45.7 per cent of households. These two sectors are connected through a housing ladder. Lower-income households first occupy the subsidized public rental housing sector. As their economic situation improves, they upgrade into the subsidized Homeownership Scheme (HOS) sector and eventually graduate into the more expensive private housing sector.

 

Our current housing malaise is not only about insufficient units, but also high prices. Three decades of rising property prices have made a very large number of households wealthy because their properties have appreciated greatly in value. They are the primary drivers of local private housing demand either for investment or to help finance home purchases for their children.

 

The demand for private housing units has increased by so much that the housing ladder has been broken for a large majority of the less well-off households. They cannot afford to live in private housing units without government subsidies or assistance.

 

The present income eligibility criteria to qualify for the Homeownership Scheme units is set at a monthly household income of $52,000. This implies government accepts that if a household earns less than this, it should receive some form of government provided housing subsidy. According to government surveys, about 80 per cent of households have monthly incomes below this level.

 

By implication, the government is saying that in principle 80 per cent of households qualify for public housing subsidies. If this is correct (!), then it is not at all obvious that government policies are focused on delivering such a housing goal.

 

Many middle-income households find current private housing prices to be unaffordable even if their household incomes are above $52,000 a month. Furthermore, since so few units are supplied each year, many of those eligible today would no longer qualify in future as their incomes rise.

 

Upward mobility through the housing ladder has become increasingly difficult for low- and middle-income households. Their incomes have lagged behind overall economic growth. Meanwhile, their numbers are swelling, especially among low-income households, as a result of rising cross border marriages and rising divorces and remarriages. This has led to unmet demands for subsidized housing.

 

Historically, public sector housing occupants moved into the private housing sector because of upward mobility. Today, they move into sub-divided units in the private housing sector, which is seen as downward mobility. This is the only form of housing that they can afford. Given that sub-division is not permitted in the public housing sector, the main burden of accommodating the increased demand from the less well-off households must take place in the private rental sector.

 

The requirement that adult children of existing public sector tenants must be deregistered in order to prevent them from ‘inheriting’ the right to stay in the public rental housing units also adds to the pressure for sub-dividing units in the private rental housing sector. The regulatory restriction that prevents sub-division in the large public rental sector is raising rents and property values indirectly in the relatively small private rental sector.

 

For this reason, it is important to recognize that rising market rents and prices are not solely driven by well-off local households and overseas buyers. The increased demand from those without means is probably an equally important source of rising private housing rents and the growth of sub-divided private housing units. This is reflected in the decline of average household size in the public rental sector from 5.1 in 1976 to 2.8 in 2016, while that in the private rental sector has decreased from 3.3 to 2.6 over the same period (see Figure). In the most recent decade it has started to rise.

Our housing malaise has so many complex interconnected dimensions that simply building more public and private units will not suffice as a solution. First, the balance between public and private housing units is a divisive issue. The balance has been shifted by the current administration from 50-50 to 60-40 in favor of public units. But less supply of private units only fuels private housing prices, which recent experience has demonstrated cannot be held down by punitive stamp duties. Rising housing prices further infuriates those who cannot wait or qualify for public housing.

 

Second, building more public rental housing may not reduce the shortfall if it encourages more cross-border marriages either through first marriages or remarriages that increase family formation numbers. If such demand is incentivized, the housing shortage among less well-off households will not be narrowed. Therefore, it matters greatly how public housing subsidies and assistance are provided and whether they will improve or worsen the housing malaise.

 

 

Third, if we only focus on building more units to meet the housing shortfall, then eventually a 60:40 ratio of public to private sector housing may become inadequate for accommodating our population because the economic divide cannot be narrowed. This would certainly imply the end of limited government and low taxes because public housing spending will soar.

 

The economy will also suffer because an increasingly large share of our highly valuable land resources will be committed to a use whose economic value cannot be released and captured by anyone, including the government. The economic and social divide between the ‘haves’ and ‘have-nots’ due to property ownership will not be narrowed, leading to long-term negative political consequences.

 

Reforming Public Housing Policy

 

Obviously a new public housing strategy has to be devised. This can be undertaken in four steps.

 

Step 1: Sell most new public housing units (instead of renting them) using a new financing arrangement to assist households that are not well off.

 

Most newly supplied public housing units should be available for sale. Conceivably an entire building could be designated as either for sale or for rent. The sales price could be the market price and be divided into two parts: the development cost and the land value. For illustration assume that the development cost is $1 million and the land value is $2 million. Land values will depend on location.

 

Households that choose to purchase the units will first pay the development cost. An initial 5-10 per cent down payment will be required and the balance paid with a mortgage loan from a bank. Government will provide a guarantee to banks to facilitate mortgage lending. Units bought cannot be transferred on the open market for 5 years, subsequently they can be freely transferred on the open market and the owner will receive all capital gains.

 

The land value will be fixed at the time of initial purchase and will be paid for as a loan from government. The loan will be at a fixed interest rate of 2 per cent and the charge will start after five years, when the units can be transferred on the market. The outstanding government loan can be repaid by installments on fairly long flexible terms so that individual households could afford the payments. If the owner fails to make payment, then the sum will be deferred and charged to the outstanding loan.

 

The proposal does not provide a direct subsidy towards the purchase price. It is a financing arrangement to assist households that are not well-off and cannot pay a high down payment and get a mortgage loan from a bank. Such assistance does not cost the government any resources because the land would otherwise have been used to build public rental housing free of charge. In fact, the government will now be able to recover part of the land values gradually.

 

Conceivably, the public may be willing to provide some direct subsidy to the less fortunate in society. This can be introduced through a discount on the sales price, which may vary with the circumstances of the household. But this is purely a political decision.

 

The new public housing scheme is in effect a government intervention to correct capital market imperfections confronting those who are not well-off when they seek loans from banks. It exposes no party to any risk. The owner gets an opportunity to become a homeowner, bequeath the asset to his next of kin, and reap any value uplift like any homeowner.

 

If an eligible household does not wish to purchase the unit upon entry to the new public housing program, then he has the option to rent first and buy later. All individuals will only be eligible once in a lifetime for ownership financing by government.

 

Step 2: Extend the new financial arrangement to existing public housing units.

 

After successfully taking the first step, the government can advance towards the second step, which would allow a much larger pool of eligible households currently occupying public housing units to become homeowners. In determining the appropriate sales price of existing units, the same principles adopted above shall be used. The government will first determine the original market price of the unit at the time they were completed and available for occupation.

 

For public rental housing units and unsold TPS units, the above original market price will be accumulated at a compound interest rate of 2 per cent to arrive at the current sales value. A depreciation rate will be applied on the estimated development cost, but not on land values. The same financing arrangements will then be applied. (If the depreciation rate used is 2 per cent, then it will exactly offset the accumulated interest charge on the development cost.)

 

For sold TPS and HOS units with outstanding unpaid land premiums, the appropriate sales price shall be determined in the same manner. Any sums that have been paid initially will be deducted before the outstanding amount is accumulated at a compound interest rate of 2 per cent to arrive at the current sales value.

 

Step 3: Facilitate redevelopment.

 

Many public rental housing estates are very large, which could make future redevelopment costly after the units are sold off to separate household owners. To reduce the transactions cost of redevelopment, stratified titles shall be defined for each building and not on the entire housing estate. Provision for forced sales could be triggered if at least 80 percent ownership shares vote in its favor. Government public housing units completed after 1997 should be made available for sale as soon as possible.

 

Step 4: Think about old estates.

 

Many public rental housing estates are quite old and some will have to be redeveloped within say two decades. The pros and cons between redevelopment as a public housing estate under the Housing Authority versus relying on the market after privatization needs to be considered. If the latter is chosen, it may be useful to consider a lower threshold for triggering forced sales, say at most at 70 per cent.

 

Privatizing the entire stock of public housing will improve economic efficiency, foster social harmony, and empower citizens politically. It will narrow the divide and disparity that is plaguing many communities everywhere. Hong Kong would not have come to its current stage had housing been privatized shortly after 1997, which I had hoped for at the time. It is late, but not too late, to arrest the populist drift towards authoritarianism. If land values are so released, our community will be enriched and invigorated. Hong Kong is blessed to have valuable land resources that can have the potential to finance a better future for all. They should not be left to waste.

Chinese Version :

未來五年土地與房屋政策之我見(下)

王于漸教授 SBS JP

房屋困局並非純因供不應求

 

香港房屋困局久被歸咎於供不應求,政府的對策不外兩方面:一)短期而言,透過加重印花稅、提高按揭首期要求,減低交投意欲,以控制需求量;二)長遠而言,則儘量增闢建屋土地,且在土地上儘量多建單位,以增加供應量。

 

社會普遍認為單位供應不足是罪魁禍首,此亦看似是私人住宅改裝為劏房、公屋輪候時間日漸延長的原因。果真如此,則只需增建足夠公私營住宅單位,香港房屋困境自會迎刃而解。

 

但以此邏輯推理顯然有誤,皆因本地向有私樓市場與公共房屋之分。現時居於私樓與公共房屋的人口分別為53.5% 與45.7%,;原則上他們大致都沿著房屋楷梯逐漸上移,低收入家庭起初租住受資助的公共房屋,一旦經濟條件改善,進而購買政府資助的居者有其屋(居屋)計劃單位,最終則在較高價私人市場置業。

 

進一步分析,可見問題關鍵不僅在於供應不足,而亦在於樓價過高。歷經近30年來持續不斷的樓市升勢,不少家庭名下物業大幅升值,為他們帶來財富,他們於是有機會參與樓市投資或協助子女置業,從而帶動樓市需求。

 

面對私樓需求劇增,經濟條件遜色家庭的房屋階梯已經折斷,在缺乏政府津貼或援助的情況下,根本無力負擔進入私樓市場的高昂價格。

 

目前申請居屋的家庭月入上限為52000元,意味着政府設定為月入低於此數的家庭提供房屋津貼;官方調查顯示,全港住戶中約有八成月入未及此水平。

 

換言之,政府無異於承認全港有八成住戶符合獲公共房屋津貼資格,此說若然成立,則政府並未有把這目標納入房屋政策之中。

 

事實上,即使月入高於$52,000的中等入息家庭,亦無法負擔私樓樓價。再者,每年新落成居屋單位極為有限,不少現時合資格的家庭日後收入按理會有所增加,亦會變得不再符合申請居屋資格。

 

對低收入以至中等入息家庭而言,要在房屋階梯向上移變得越發困難。此等家庭的收入未能追上整體經濟增長,而跨境婚姻、離婚及初婚更使低收入家庭為數日增,同時令資助房屋需求大增。

 

一向以來,公共房屋住戶向上流動,是入住私人房屋;今時今日,公屋住戶遷出公屋單位,卻只能住進私人市場的劏房單位,這亦是他們所能負擔的唯一房屋類型,等如向下流動。公屋不容劏房出現,經濟條件欠佳家庭的住屋需求卻與日俱增,唯有依靠租住私樓。

 

公屋租戶成年子女須於租戶登記冊中除名,以防日後繼承單位的有關規定,亦加重劏房需求壓力。公屋為數較多,但禁止分間,間接導致為數較少的私樓市場租金和樓價都水漲船高。

 

由此可見,本地房屋租金和售價持續飆升,並非純粹由本地富裕家庭和外來買家一手造成;低收入家庭的房屋需求有增無減,對私樓租金上升與劏房日多之勢,亦產生同等效應,由【】中可見,1976至2016年,出租公屋住戶的平均住戶人數由5.1減至2.8,私樓租戶的平均住戶人數則由3.3減至2.6。在近十年期內則開始攀升。

 

本地房屋困局涉及互相緊扣的多層面複雜因素,單靠增建公屋與私樓並不足以解決問題。首先,公營房屋與私樓的比例,就足以造成分化;現屆政府把原本各佔一半的比例改為側重公屋的六四之比,但減少私樓供應量只會令私樓樓價升勢火上加油,從近期懲罰性印花稅無助樓價下調即可見一斑。房屋價格趨升,令仍未能上樓的公屋輪候者或不符合資格申請公屋者更感怨憤。

第二,若增建公共房屋,反而助長跨境婚姻(無論初婚或再婚),增加家庭數目,對彌補房屋供應效用不大;假使公屋需求受此等人為因素助長,則低收入家庭所面對的房屋短缺現象,不會得到改善。簡而言之,資助公屋究竟有助於改善樓市困局抑或適得其反,在很大程度上取決於資助形式。

 

第三,若社會只著眼於增建單位,以彌補房屋短缺,則即使公私營房屋達六四之比,亦不足以應付全民所需,皆因經濟鴻溝根本無法縮窄。毫無疑問,公共房屋開支必會隨之飆升,有限度政府與低稅率政策勢難維持。

 

把寶貴土地資源埋沒,經濟價值無從釋放,各方(包括政府在內)無一受惠,整體經濟備受打擊,「有產階級」與「無產一族」之間的社經鴻溝更難望收窄,政治惡果影響深遠。

 

如何改革公屋政策

 

公屋政策顯然有必要改轅易轍,制訂新方向可循下列四大步驟。

 

第一步:出售(而非出租)最新建成之公屋,採取全新融資安排,協助低收入家庭置業。

 

大部份新推公屋單位應可出售。可將整幢大廈列作可供出售或出租,售價可以等同市價,其中包含發展成本與土地價值兩部份,例如發展成本一百萬,土地價值二百萬,地價視乎地點而定。

 

有意購買單位的住戶須先付發展成本,支付規定的半成至一成首期後,餘款則以銀行按揭方式償還,由政府擔任按揭擔保人。有關單位五年內不得在市場上轉讓,限期過後可於公開市場上自由轉讓,資本增益概歸業主所有。

 

有關單位的地價,在購置時即加以釐訂,以歸還政府貸款方式償付。貸款年息固定為二厘,由五年禁止轉讓期限之後起計。為協助借款家庭,政府貸款餘額將以較寬鬆的長期分期付款方式處理;逾期供款一律遞延,計入未償還貸款總額之內。

 

上述建議旨在為無力負擔首期,又未能獲得銀行按揭貸款的低收入住戶提供融資安排,而非直接補貼買價。有關土地本來就已免費用作興建公屋,此一融資安排不但不費公帑,政府更可於日後取回部份土地價值。

 

另一構思則由社會為弱勢社群提供直接資助,例如售價折扣,視乎有關家庭的實際家境而定,但這屬於政治決策。

 

上述新公屋計劃實際上等於政府介入,以矯正資本市場窒礙弱勢社群申請銀行貸款的不完善處,對任何一方均不會構成風險。住戶有機會成為業主,可將資產傳給近親,而且一如社會上其他業主,可隨物業升值而獲益。

 

獲編配新建公屋家庭若暫時無意置業,可選擇先租後買;市民一生中只能享有一次由政府提供資助融資買樓安排的福利。

 

第二步:將新融資安排適用範圍擴展至現有公屋單位。

 

第一步行之有效之後,政府可採取第二步,令更多合資格公屋住戶晉身業主;現有公屋單位亦可按相同原則及按先前有關單位落成以至可供入住時的市價釐訂售價。

 

計算公屋租住單位以及未出售租者置其屋(租置)計劃單位,應按複息利率二厘釐訂現時售價,並應將折舊率計入發展成本估值而非地價中,然後採取相同的融資安排。(若折舊率為二厘,則剛好抵銷發展成本的累計利息收費)。

 

已經售出而未補地價的租置單位及居屋單位,售價將以同一方式釐訂。先前已繳款項先予扣除,再以複息利率二厘計算尚欠餘款,以釐訂現時售價。

 

第三步促進舊屋邨重建。

 

不少公共屋邨規模龐大,一旦所有單位都售給獨立住戶,日後重建成本難免高昂;為減省重建交易成本,應界定每座大廈的各自業權,而非按整個屋邨計算,重建的強拍門檻,可定為八成業權。1997年之後落成的公屋單位,應儘早向住戶提供購買的安排。

 

第四步舊式屋邨

 

不少公共屋邨已相當殘舊,其中一些也許在20年內就有需要進行重建。究竟應該當作房屋委員會轄下的公共屋邨重建,抑或透過私有化而改由市場主導,必須仔細權衡兩者的利弊;假使決定私有化,則可考慮將強拍門檻劃在不高於七成業權的水平。

 

將全港公屋私有化,必會有助改善經濟效率,促進社會和諧,賦予市民政治權利;困擾世界各地的社會分化和貧富懸殊現象,在本地可藉此得以紓緩。香港若於九七回歸之初就如我所提,做到以上各點,應不至於陷入當前困境。

 

要制止民粹主義演變成威權主義,尚為時未晚。藉出售公屋釋放土地價值,定能創造財富,活化社會。香港有幸坐擁寶貴土地資源,打造美好前景,焉可白白浪費?