Lord of the Land: Lau Wong-fat

SCMP September 22, 2013

Who is the most influential person in Hong Kong? It is no longer Li Ka-shing. It is certainly not Leung Chun-ying. Nor is it yet the head of the liaison office. Perhaps it is legislative councillor and former Executive Council member Lau Wong-fat, head of the Heung Yee Kuk since 1980.

The story of how the now 76-year-old Tuen Mun villager came to such power - and land-owning wealth - could really only be told in a novel. But what is abundantly clear is that Lau, while representing a small minority of the actual residents of the New Territories, has manipulated government policies to the benefit of his small number of constituents on the single most important issue facing the government: land use.

So do not take lightly Lau's endorsement of considering using country parks for new development. At the same time, he has also changed tack and now suggests that the village house policy for sons of so-called indigenous villagers could be amended to allow high-rise flats rather than three-storey houses.

The kuk and its component rural committees has long seemed to have a veto not just over government policies in the New Territories but over laws against brazen misuse of allegedly agricultural land. Illegal structures, which in the urban area would quickly bring action by the Buildings Department, are ignored on a grand scale.

Lau's recent comments on the country parks and small house system seem designed to divert attention from the reality of Hong Kong's land misuse. As has been pointed out, 33 per cent of Hong Kong is neither urban nor country park, nor even golf courses, but a messy mixture of scrub and land supposedly agricultural but in practice often used for old car dumps, container storage and the like.

Lau's aim in now accepting, after years of rejecting, high-rise "village houses" appears aimed to fend off any attempt to abolish a system which is a major cause of shortage of development land. Even Lau now recognises that there is not enough land in all of Hong Kong to meet the open-ended commitment to the sons of so-called indigenous male villagers. Invented in 1972 as a short-term bribe to villages not to stand in the way of new town development, a myth of "ancestral rights" has been built around it, to the vast profit of a few and the expense of the rest of Hong Kong.

Not that one can blame Lau for other aspects of the land policy mess. Apparent shortages of development land also reflect the years under Donald Tsang Yam-kuen of keeping supply tight and viewing high prices as beneficial, which, of course, they are to the multiple-property-owning senior bureaucrats. Housing construction has been inadequate in recent years thanks to a policy of maximising premiums on land conversions. But that is no reason now to be panicked into moves promoted by this or that vested interest.

The issue of subdivision of apartments and industrial units - illegal, but now the law is ignored for being inconvenient - does not only indicate an overall shortage of housing. It also reflects the distance and travel costs of much new housing from jobs. In turn, that partly reflects the sale of inner-city land to the highest bidder, driving out middle- and low-income households or using the Urban Renewal Authority to replace cheap tenements and small shops with luxury blocks and big-name retailers.

In theory, it would be best to let market forces rule. But, in practice, this is not possible in Hong Kong at present because of the huge income gaps that exist and the unwillingness of government to consider the desirability of sustained lower prices for land generally, which would bring more affordability for more people. You can be sure that if prices tumble because interest rates rise, the government will, as in 1999, reverse course on land provision to protect existing owners and bank interests, and its own revenues.

As it is, prices and policies provide a huge implicit subsidy to older owners (like myself) and inheritors at the expense of the young and the non-property-owning old. Housing problems are as much a function of poor distribution as overall shortage.

Household size has also been falling steadily and may continue to do so as birth rates remain low and more old people move from flats to homes for the elderly. Estimates for future population also continue to be greatly exaggerated in official projections and are red meat for the engineering consultancies and construction companies that work with the big-spending infrastructure departments.

What is missing in all this is not just affordable housing. It is a sense of whether anyone in government has an overall grasp of the issue and whether they are capable of devising and pushing through a policy which treats Hong Kong as one society, which stands up to entrenched interests and can clearly enunciate its policies to the public.

In principle, Leung should, given his professional experience, be in a position to do so. In practice, he is being pushed here and there by behind-the-scenes politics, led into minefields by an incompetent development minister, and resorting to silly short-term measures - the tax on non-resident buyers. If he is a leader, now is the time to be seen to be in charge of this issue.

 

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