In Legco yesterday, Secretary for Planning, Lands and Housing Michael
Suen showed the difference that exists between the experienced former
civil servants in Exco and the others.
In his portfolio he has some of the most contentious policy areas and
yet, since his appointment, he has made no ill-considered remarks.
Indeed, until yesterday, his publicly attributed utterances were
limited to the speech he gave at the series of civil service forums in
If we can take some comfort on the housing front, it is from the fact
that we now we have a man of apparent substance overseeing this policy
That may, slowly, be enough for the public to develop some confidence
in the residential market.
Yesterday he gave a strong performance. But the measures he outlined
will not herald a strong rebound in sentiment or a sharp price
movement in the market.
Indeed, I do not think for one moment that he intended this to be the
result of his announcement.
What he tried to do, and I think largely achieved, was to remove some
of the ridiculous straitjackets that have dogged this administration
since that day in October 1997 when the Chief Executive walked naively
into the hornet's nest that is housing policy.
That it took someone else, other than the Chief Executive, to shake
off the shackles, says a lot about the failings of an executive-led
government which does not have the ballot box as the windsock of
The nine policy measures that Suen did announce will not set the world
on fire. In some areas they bore the marks of the inevitable political
bartering that has to take place. But there were some moves towards
freeing the strangulated market.
The move to place all land on the application list, effectively doing
away with auctions, should be welcomed. It always struck me that civil
servants deciding when and what should be auctioned was rather
In a similar vein, after a decade of discussions behind the scenes, he
will be relaxing the security of tenure provisions in the Landlord and
There is no reason why normal contractual rules should not apply to
the renting of a flat.
This move will benefit both investors and tenants, as landlords will
be more confident in letting their property out.
The final dropping of the 70 per cent home ownership target was
necessary, as was the final demise of the 50,000 public housing
This brought back the flexibility that the authors of the Long Term
Housing Strategy had originally intended.
And whilst this does give some administrative discretion to the policy
makers, it must be better to choose this route than waste ever more
resources in an over-supplied and over-subsidised market.
In other areas one can be less enthusiastic.
Suen could have chosen between cancelling the Tenants Purchase Scheme,
or an obscure mechanism called the secondary home ownership market. He
could even have chosen both, especially as the public rental tenant
moving into a second-hand Home Ownership Scheme flat gets three lots
of subsidies! But he merely stopped at the first option. He should
have terminated the HOS, but instead merely halted it indefinitely.
In civil service-speak there is an important distinction between the
two terms. What the distinction is will only be revealed when prices
are soaring, at some future date, and the HOS is unveiled once more.
I have been following the machinations on housing policy for well over
a decade now and hopefully we have seen the last policy clarification
for a few years to come.
If I am left with one thought after all these policy changes, it is
that the randomness of the public housing changes has been so divisive
Changes in income and asset limits, in particular, have dramatically
altered the welfare of families on similar incomes. One day you are in
the target group, the next you are out. You may have got the lucky
draw ticket for a HOS, or you may not have. And, at the same time that
these massive subsidies are doled out we still have people in real
So, now that we are slowly getting back to square one on housing, it
is time to sit down and institute real reform of the land market and
work out an integrated welfare policy that benefits those in need,
Stephen Brown is head of research for Kim Eng Securities
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