Former Hong Kong secretary for development Eric Ma Siu-cheung delivers a speech at the Building Safety Symposium cum Closing Ceremony of Building Safety Week 2017 on March 24, 2017. (PHOTO/ HKSAR GOVERNMENT)
Former secretary for development Eric Ma Siu-cheung is on the show this week.
Ma says, in order to start solving Hong Kong's housing shortage, our new chief executive will need to remove some red tape and release more land in order to first achieve some short-term goals before tackling long-term ones. He says these red tapes were formed over the years when Hong Kong developed a blame culture that forced civil servants to protect themselves.
Check out the full transcript of TVB’s Straight Talk host Dr. Eugene Chan’s interview with Eric Ma Siu-cheung
Chan: This is Eugene Chan, and welcome to Straight Talk. Our guest tonight is Mr Eric Ma, former secretary for development. Mr Ma is an engineer by profession, and prior to joining the government, he had 25 years of experience in the construction industry, leading teams that planned and implemented major development projects in Hong Kong. He also went on to lead new initiatives in boosting Hong Kong's land supply during his tenure. So tonight, we have invited Mr Ma to tell us if he thinks the housing shortage in Hong Kong will ever be resolved. Welcome, Eric.
Ma: Thank you. Eugene.
Chan: Eric, you know, the Chief Executive election is just around the corner. And the housing issue is most probably the number one concern. Actually, since the handover, this has been on the agenda and all the past four chief executives have put in policy to look in this important area. But Hong Kong today still has the world's least affordable housing. And as a matter of fact, we have topped the global list of the most expensive housing, private housing market for 11 consecutive years. So Eric, with your background, maybe you can tell the viewers what… can you give us a snapshot of what is happening to the private and public housing sector right at this moment?
Ma: Okay. Certainly I think everyone is aware about the housing situation, the acute shortage. So let's... as there's no measures... agreeable measures on how to measure it, but let us look at the Hong Kong situation, look at the public housing sector, look at the queue, there are over 150,000 applicants in the queue. And last year, at the end of last year, the waiting time, average waiting time was about six years, that's more than double what we pledged for three years, to get the housing allocation. So that's the situation on public rental housing. Looking back at the private housing sector, as mentioned, in the international survey, we have been ranked as the least affordable housing city in the world for 11 years consecutively. And in terms of affordability, the average household needs to spend 25 years of their average household income in order to acquire a unit for themselves. So 25 year, we're not talking about any interest rate, their monthly expenditure to keep their household, their wellbeing. So you can see it's a really very heavy burden for most of the private residential owners.
Chan: Right, I've done some research, slightly different to yours, 25 years. Depends on the size of flat you're going to buy. If you're getting a 60 square meter flat for $1.24 million, it is going to take like 60 percent of the average household income for 20 years. I mean, it's just as bad.
Chan: But anyway, having said that, I mean, Hong Kong's housing being expensive has always been the case for the last many, many, many years. But still people still come to work here and live here. So is it inevitable that big cities like Hong Kong, even London, or Tokyo or Sydney in Australia, they're always expensive? So I mean what is your view on that?
Ma: Always, I think cities have their attractions, in terms of working opportunities and in terms of education. So that's why a lot of people rush into cities. However, Hong Kong is very, very unique in that we are a city with a boundary, we have our city boundary, and all our activities, from the time we were born, we were born in Hong Kong, we need to be born in Hong Kong, we study in Hong Kong, we educate in Hong Kong, and we continue our work, entertainment, marriage, etc. And even up to the end of our life, we die and we need to bury in Hong Kong. So all these activities need to take place within the boundaries of the cities. So that's the very uniqueness of Hong Kong under the “one country, two systems”.
Compared to other cities where they may be coming from the country.
Chan: Exactly. Like London, they could be living two hours away but they take the train to work but when they finish work, they don't have to go to the city anymore.
Ma: Yes. And a lot of activities can take place outside the city boundary. So like education a lot of kids are brought up in the countryside, and they go to study in a university town. That may not be the case in major cities like New York or San Francisco. So these are the differences in Hong Kong compared to other major cities. We have all these constraints and our landmasses have to cater for all these activities from the hospital, living residents, shopping malls, office, commercial centers, industrial blocks and even up to the end, the burial ground, the columbarium we need to provide all within our own land mass.
So Hong Kong being not a very big city with ever increasing population, housing shortage is inevitable in a way.
Chan: Yes. Mr Frank Chan was here six months ago, our secretary and we were saying that we were looking at… we need 300,000 units for until the year 2025. But at the moment, we can only plan 180,000. So we are short of 120,000 flats for both the public and private housing. And he said at that stage, it will be another 10 to 20 years before the current waiting time for the moment, you mentioned 5.8 years for the public housing to be reduced for three years. I mean, it's a very alarming figure. Do you agree?
Ma: That's the hard facts. We can't deny it. That's the plan we have in hand. So if the government wants to do something, I think they need to do some quick fix, some quick wins. So I think the forthcoming term of government, they need to think about whether they can have some quick fix, utilization of some of the available resources, like some of the land holding in the private sector, or even the farmland in New Territories. And all these are the processes they need to do something.
Chan: Right. All right. Since you said the government needs a quick fix. I'm going to ask you a quick question. And a quick answer. The title of the show tonight is “Will Hong Kong's housing shortage issue ever be resolved?” A quick answer.
Ma: I think housing is a problem all the time, in all the cities they face a challenge. How to alleviate it I think it's important. In the past, you may recall in the 1970s, in the last century, we had a very high natural growth rate. And at the same time we got an influx of migrants, the problem we face at that time is much, much bigger than now. You remember after the effort over the three decades, they have built nine new towns to accommodate three and a half million people. So that's a huge task, compared with what we currently face. So I have confidence if we make changes, and if we have the determination. I think the situation could be alleviated.
Chan: Right. Before we move onto some projects that the government has proposed, from this government. Now, let me ask you what I think the major... one of the facts that everybody agrees is that land supply is the crux of the matter, right. But I've also done some data work before I see you today, that 42 percent of our land is used for country park, where 25 percent used for other businesses or development. Only 7 percent is used for housing. I mean, this is alarmingly low compared to… it’s been listed at 7 percent, not 17 percent, 7 percent, very low. So that hasn't changed for 15 years. Should this be changed?
Ma: What you said are the hard facts. And we are very generous in terms of land allocation for conservation for country park, woodland and wetland, etc, as you mentioned. And indeed the total number allocated for all these uses, our conservation purpose is 66 percent out of our 1,100 kilometer square. We are not a big city, but we allocate quite a lot of land for this purpose. The remaining is only 24 percent for all purposes. And out of this 24 percent, only 7 percent are for residential users. So that means they have room for us if we want to do something to increase these 7 percent by another 2 or 3 percent is possible. Only it’s time.
Chan: Being you were in the development bureau, one of your jobs was to look for new land, as we just said, that without land we can't build housing on. And I have to refer to the guests who have been to the show. Mr Kenneth Lam, the president of the Hong Kong Golf Association was here eight months ago. And he was saying that one of the plans is to take away some from the golf course, part of the golf courses with the Hong Kong golf club. And to him he said they need land for sports development. So if we follow in that direction, will it one day, are we going to take back the racecourse? Maybe we take back the football fields and all those parks that we have? Is it good? Is it the direction we're going down? It's quite worrying.
Ma: I think for a city, we need to have a balanced development. The people need to live, they’re not just for living, they need to have jobs. And they need to have entertainment. So that's why quality needs to improve alongside housing accommodation being improved. So if… from what I anticipate, we need to have a balance, we are not just for work, we need a place for us to live and entertain and enjoy.
Chan: So before we go to a break, I want to ask you about the new projects. I mean, this government has come up with the Northern Metropolis, the Tomorrow Lantau Vision, and all our great plans for the next 20 to 30 years. Are we on the right track? Do we need them?
Ma: Just a simple answer: without them, we have no room to bargain, and we have no room to improve. So that's what I think, we need them.
Chan: So we need them.
Chan: Even it will take 20, 30 years? But how about short term measures? I'm sure the viewers are going to say, right, you have said the hard facts. We are going to be stuck with all the shortages. But what are we going to do now? I mean, we still have to live.
Ma: Yes. I think there is a very simple answer to the acute shortage of land. First, land is not something you can readily draw out from farmland and convert into a housing site or for other uses. It’s not. It's a very lengthy process, we need to pass through all the study, ways to make it through all the statutory procedures. And we need the wider infrastructure to support it, we need to form the site, we need to assume the land, form the site and provide all the infrastructure like roads, sewage, drainage, utility, etc. So it's a very lengthy process. So we need to have a timeframe, we need to look at problems in two dimensions. One is the time and the other is the impact. So if we want to have some quick wins, we need to do something that convert the land from non-developable land into development land within a short timeframe, like the government is now currently proposing, like the second round of rezoning exercise, they're going to convert 300 hectares of land for various uses. I think that's one way that can have a quicker delivery time, because most of these lands are within the developed area with all the infrastructure available, and they are smaller in scale. So even though there are a lot of pieces, they are smaller in scale, and can be absorbed by the existing infrastructure. And their delivery can be within three or four years, they can help us alleviate our problem. Like the big projects, they are Lantau Tomorrow, the Northern Metropolis is a huge project that needs at least a decade.
Chan: Okay, let's take a break. We'll be right back.
Chan: Thank you for staying with us. We have been talking with Mr Eric Ma about the housing shortage in Hong Kong. So Eric, in the first part we had looked at the snapshot of Hong Kong's shortage issue, we agreed that land supply is the most important factor that we must get to. And we talked about the future projects the government has. And you agreed it's going to be a right direction. But the hard fact is we have problem with the short term. Maybe you can just revisit that topic very quickly again: how can we have interim measures that will alleviate at least some of the problems while we are getting to the end of the tunnel, with end result, with enough supply?
Ma: Some of the measures, like what I've mentioned earlier, like rezoning, is the quickest way because we identify some land parcel, vacant land parcel that are in the fringe of the developing area. So we can just convert it into certain uses, like residential. That can give us a quick supply of land. That has been done before. Certainly some people, local people, will be complaining about the transportation and other measures. But that is the way and that is the price we need to pay for. If we want to have a long-term solution, we need to have big-ticket items, like the Lantau Tomorrow, like the Northern Metropolis. These are big items and they can give us a long relief. However, they need a long time to become materialized, maybe 10 years for the whole process. But that will be the long-term solution. So we need the combination of soft-term and long-term, in order to sustain…
Ma: …our continuous development over the years.
Chan: You had your past experience in doing new town planning. You mentioned earlier the first part that there's a good way to do it. You were involved in Sha Tin and Tin Shui Wai. What else can the current government do along that line? Do we have more land for more cities to be built? New towns?
Ma: I think for new towns, why we call it new towns? Because their impact is huge, like the Tin Shui Wai new town, they are talking about accommodating 330,000 people; while the new development areas, we are talking about… like Hung Shui Kiu, they are talking about 100,000. So it’s much smaller in terms of scale. For those projects in the 80s, as I mentioned earlier, in the 70s and 80s in last century, we have delivered eight new towns to Hong Kong, and accommodated 3.5 million people. And these new towns were, at that time, under very efficient delivery mechanism. All the departments, all the resources required to deliver all these infrastructures, planning, were under one authority – the New Territory Development Branch at that time. So it's very efficient, they are very swift in making decisions, quick responses to the needs of the community. And they have the long foresight. Take Tin Shui Wai as an example, the government acquired land from the private sector in 1982, and the first occupation of the private development in Tin Shui Wai was 1991. And all the 58 private residential towers were delivered within seven years.
Ma: So that is the timeframe. It’s much more efficient than now.
Chan: Right. Eric, you were in the government for… full term of a government, then you went into the private sector. So you will have a first-hand experience from the outside, go to the government, know exactly what's happening, back to private sector. When you look back, if the new Chief Executive is going to ask you, with your experience, is there anything that we can do better? Because I'm sure there has been all the talks in the community saying there are a lot of red tapes. Or even the procedures are very long and tedious. What would you suggest to the new government?
Ma: I think for the government itself, we need to be aware of one thing. You know government is the authority, with this view, the wealth of the city. So it has a very important mechanism, it’s “check and balance”. So all its decisions, actions, need to have a check and balance. And that's why they inherited a lot of red tapes, as we mentioned. That's good and bad. Good is they have the check and balance; but the bad is the delivery efficiency. So from my perspective, I think the most frustrating factor is about the mentality.
Chan: So before we go into that, so you're not saying that the red tapes are the major slowing down reason?
Ma: I think red tape is indeed in the past, we used the term bureaucracy. The bureaucracy is referring to the government anyway. So it’s part of the character inherited from all these government structure.
Give you an example, recently with the makeshift hospital, we can build something in seven days, just like the mainland. So it can be done.
Chan: So you just mentioned about the mentality.
Ma: Exactly. So that's why I said mentality. If we get the mentality and we get the determination, we can do it. Why I said it’s the mentality? Because we need to be fair to the civil servants. A lot of civil servants, they joined the government, they want to do something. But the problem is there is a culture in our community, we have a blame culture developed over the last few decades. You can quote all these examples, even a citizen will complain about a rubbish on the street, a fall on a slippery floor. So a lot of blame culture. So they blame all the mistakes, they blame the incidents, or even they blame a decision by the government. So that pushes all the civil servants to develop a culture to protect themselves. And that's what you mentioned about this bureaucracy. It is to protect themselves and the time…
Chan: So in a way it is understandable.
Ma: It’s understandable.
Chan: So how can the government change it? I mean this won’t change, people will still complain, still blame people. So what can they do?
Ma: I think we need to have… let the civil servants… first need to empower them, they have the discretion to make a decision. But at the moment, we get rid of the this by replacing with all these committees. You know it’s the committees governing the system now. So we need to get rid of those committees and let the civil servants, empowered them to make the decisions.
Chan: Since you mentioned that, a Hong Kong Foundation report recently said that… they said a pessimist work culture, which slows down the process. So what they are saying is suggesting a system of bonuses and promotions, like Singapore and South Korea. Is that the right direction?
Ma: I will not go that extreme, but I will say the most important is to get their KPI. They need to have service patch. And like the acute supply of housing and land, they can have a certain target.
Chan: Right. Just a wild guess, if we remove so-called red tapes, make it more efficient, I am not saying don’t use them, will we be able to catch up to 120,000 that was short, in terms of both public and private housing within 2025? Is it possible?
Ma: 2025 is only three years away.
Ma: So it’s almost a mission impossible. But if we are talking about a 10-year timeframe, I think they can do a lot more. And in particular, from my perspective from both in the private sector and the public sector, I think the public sector, they have a… their role should be retained to regulatory, and utilize more on the resources from the private sector.
Chan: Before we move onto that, there is always another thing that we have mentioned, that I've heard stories about repeated consultation, or even what we call duplicate regulations, that is slowing down the process. Which one should be handled first?
Ma: I think we need to handle all the front at the same time. Like the consultation, it has been a very demanding job, I have handled over 100 of these consultation sessions. But interestedly, more than 50 percent of those attendees are the same frequent comers. They repeatedly repeating their voice. So I think we need to be focused.
Chan: So that can be streamlined, as you said?
Ma: We need to streamline, we need to combine, we need to have single… let the professional to do their recommendation and consult the public on the recommendation.
Chan: Eric, on the last part of the show, since you mentioned involving… let the civil servants do the job and let the committees reduce the time, and that gets things going. You also mentioned the private sector. In Hong Kong, we know that we need the private sector to make things happen as well. But there has also been a blame culture, or so-called people are saying the colluding between the government and the business sectors. Is that true?
Ma: That's always the blame culture developed over the last two decades. But I still think we have the mechanism, as far as we get all these into a public tendering system, let the tendering process be opening and transparent. I think that is good enough. And a lot of time, we need to rely on the efficiency of the private sector to deliver all these projects.
Chan: One last point I want to ask you: every five years, we have a new government, and with different chief executives, I'm sure they have different ideas, they have different situations at the time, so there would have different policies. But as you said, like 2022-2025 is a very short time. So how can we ensure to have a continuation of policies for the many years to come?
Ma: Most important – set and agree the target with the community. If we said that's the 10-year target and agree it with the community, that is the consensus. And all our machines, all the government machines, should move towards that target.
Chan: All right, Eric, that is all the time we have, many thanks for coming tonight to share your suggestions on how to solve Hong Kong’s long-standing housing shortage, based on your experience with both the government and the private sector. Stay healthy and have a good week, and goodnight.
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