Tuesday, December 23, 2014   




Shackles off ... it's time for real reform

Stephen Brown

Thursday, November 14, 2002

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

late summer.

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

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area.

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

policy.

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

strange.

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

Tenant Ordinance.

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

opportunities.

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

and unfair.

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

need.

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,

proportionately.

Stephen Brown is head of research for Kim Eng Securities

All rights reserved.

END


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