Although a proposal to make available apartments for sale specifically to first time home buyers is well received by the public, it has drawn criticisms from some politicians and social activists that the developers stand to benefit most from the scheme.
These critics are barking up the wrong tree. In this capitalist town, whether you like it or not, the private sector will always be called upon to play a key role either independently or in cooperation with the authorities in many policy initiatives, especially those involving the market.
The property sector is a case in point. Since the 1970s when income from the auction of government land was seen as a major source of funding to finance much needed infrastructure development, the private sector developers have dominated the property market.
By generating capital through sales of apartments to the public, these developers have helped ensure a reliable stream of sizable income enabling the government to treat land sales as recurrent revenue to help finance recurrent expenditures such as education and social welfare.
Many developers have amassed fabulous personal fortunes in the process. But they also run enormous risks from time to time.
Inviting developers to help build public housing is not a new idea in Hong Kong. The Kornhill development at an underground railway station has served as an example of success in such arrangements.
The developers are not going to do if they are not satisfied with the prospective return. The public will have to trust the government in negotiating terms of joint development projects with the private sector.
It is hard to determine who gets the better terms in such complex projects. But the public can at least benefit from the developers’ expertise and efficiency that cannot be matched by any government bureaucracy.
The latest proposal to solving the housing shortage problem is modest in size. It is hoped that its success can lead to more ambitious joint venture projects that can help meet the pressing needs of the many young families.
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