Carrie unveils major exciting housing mega-snooze

Today is the day Hong Kong Chief Executive Carrie Lam makes a big blockbuster announcement on the burning issue of housing. Her people (or someone) have already leaked details of a package to impose a tax on developers’ vacant units, cut prices of some subsidized homes, and divert some land away from auction to public housing.

As with previous measures, these all seem carefully designed to sound serious but have minimal impact in practice. The vacancy tax will no doubt have loopholes, subsidized homes are too scarce to make a difference, and only a small amount of land will probably be reallocated to public housing.

Carrie sees this as a way to boost her popularity for her first anniversary as CE on July 1. (Her lame, rigged public consultation on land supply having mysteriously failed to fool the public.) If she were a devious and skilled politician, she would use the leaks to manage expectations, and announce something more significant today so we all go ‘Wow’. But to her, these non-measures are probably daringly radical as they are – she will be puzzled, shocked and hurt when citizens fail to be impressed.

Today is also the day that lawmaker, wannabe Chief Executive and Executive Council member Regina Ip calls for a ban on non-residents buying housing. Not only that, she dismisses the vacancy tax idea as pointless…

She gets bonus ‘twisting the knife’ points for mentioning that many Mainland cities in the glorious let’s-all-integrate Opportunities! motherland have similar restrictions.

As an Executive Council member, Regina is supposed to support government policy in public – but of course the vacancy tax hasn’t been announced yet (clever, huh?) so the legislator in her can be an independent-thinker with a serious idea.

Officials consistently refuse to even consider demand-side solutions to the housing-affordability crisis, using an array of excuses if pushed. (The other main one is curbing the flow of unskilled Mainland immigrants, who push up rents at the bottom of the market, and ultimately join the lengthening queue for public housing.)

Beijing has also long favoured the high-land-values asset-price-inflation mentality in Hong Kong (the CCP co-opted property tycoons way back, it eyes our reserves, China’s elites use local real estate to launder money, and squeezing the young middle-class out of Hong Kong is a perfectly believable Leninist strategy). But Chinese leaders must realize that housing undermines the local administration’s credibility; the Liaison Office must have approved the vacancy tax idea, if not suggested it.

Regina still apparently lusts for power and shoe-shines Beijing accordingly (pushing Belt and Road, etc). So it is perfectly possible that her proposal has the blessing of Liaison Office puppet-masters. Alternatively, she is making a little mischief as a way to have some summer fun.

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