Chief Executive Carrie Lam Cheng Yuet-ngor’s final Policy Address visualized the future of the city at the final stage of her tenure. The address focused mostly on housing and land supply, the chronic issue that has been getting on the public’s nerves for decades. The bold plan for a Northern Metropolis proposed by Lam raised eyebrows, and the vast bordering land of Hong Kong and Shenzhen, most of which is wild nature preserves, is about to be in the spotlight.

The metropolis envisaged by the Policy Address, covering 300 square kilometers, is expected to accommodate around 926,000 households — more than half to be newly built — for around 2.5 million people. Lam said the development aims to grow into an innovation and technology hub, creating more than 500,000 jobs, and complementing the city’s role as a financial center.

In total, 1 million housing units could be ready to be in the real estate market in the next 20 to 25 years, 34 percent of the current supply of 2.94 million units.

Hong Kong already plans artificial islands estimated to cost HK$624 billion ($80.2 billion) — its most expensive infrastructure project —with up to 400,000 units across 1,700 hectares of reclaimed land.

As per Lam’s remarks, “Fortunately, the implementation of the National Security Law (for Hong Kong) and the improvement to our electoral system have restored safety and stability in society. Hong Kong is now ready again for a new start for economic development”.

Public housing estates have not kept up with demand, and Hong Kong’s property is among the priciest in the world. This is why Lam’s plans must be welcome indeed. As I mentioned previously, home prices in August jumped to a record high according to the home price index compiled by Centaline Property Agency. The previous record for the price index was set in mid-2019 at the beginning of the civil unrest. Residential property values have increased 8.6 percent since the beginning of 2021.

Undoubtedly, despite what some media in the West try to explain, the scarcity of land supply and subsequent housing issues are Hong Kong’s biggest concerns to most of its residents: it has been like that for decades, and the intention of the government, as per Lam’s words, is that this ceases (at least partially) to be a concern in the future. It will not be an easy task, but initiatives like the one announced by Hong Kong’s chief executive must be applauded.

Hong Kong is an amazing place to live in most senses, but it looks appallingly grim when referring to the city’s dire housing status. The average household, for instance, offers a meager 15 square meters (160 square feet) of living space per person, according to the Census and Statistics Department. It impresses the world that people in Hong Kong barely have enough room for stretching their bodies at home!

From a macro perspective, Hong Kong is doing well, much better than expected given the circumstances. According to revised government figures released on Aug 13, Hong Kong’s economy is expected to grow by between 5.5 percent and 6.5 percent this year, compared with an earlier range of 3.5 to 5.5 percent, which means that the growth is considerably higher than initially expected.

Nevertheless, in the housing area, things are more complicated. Real estate and housing in Hong Kong are areas difficult to analyze because of Hong Kong’s peculiar system of landholding and also because of its lack of usable land, among other things.

There is indeed a big mismatch between the demands and the supply of land. Hong Kong has more than 7.4 million residents crammed into a relatively small landmass. This landmass, per se, is not so small, since Hong Kong has a total land area of 1,104 square kilometers. The problem here resides in the fact that almost 40 percent of the total land has been designated as country parks and special areas, which prohibits any construction. Consequently, construction is permitted on only 60 percent of Hong Kong’s land area, which has clearly proved to be insufficient.

This issue could be solved in several ways, but none of them seems to please everyone. It is critical for the long-term well-being of Hong Kong that proper solutions are found to make land available for housing, thus making everybody’s lives easier. The government should find a way to stop land hoarding by the developers, a way to reclaim more land, and a way to reduce the size of country parks.

No chief executive in the special administrative region has the magic wand of Hogwarts, but the top job in the legendary city demands somewhat magic powers in mitigating, if not solving, the housing conundrum with an increasingly limited land supply. A quick Band-Aid-like solution would be the last thing that Hong Kong deserves; therefore, we cannot expect the chief executive’s final steps to fix all the underlying problems. Lam’s project looks promising as it is bold and comprehensive, featured with an overall development program that will take years to materialize. It is a great first step forward toward tackling the problem, and therefore it must be applauded. Other actions will still be required, though, such as, for example, developing the fringes of country parks and restarting the land reclamation projects … regardless of how controversial they may be. Hong Kong needs more developable land.

The author is a fintech adviser, a researcher, and a former business analyst for a Hong Kong publicly listed company.

The views do not necessarily reflect those of China Daily.