(Bloomberg) -- Hong Kong may dig deep to reverse the city’s chronic shortage of land for building, adding underground caverns to the mix of options aimed at creating more housing in the world’s most expensive property market.
“Hong Kong’s hilly terrain and strong rock formations make it highly suitable for developing rock caverns, particularly on the urban fringes,” the task force said, seeking public submissions over the next five months on 18 options for boosting land supply.
Although urban centers in the city are among the densest in the world, about three-fourths of Hong Kong’s land mass is made up of open spaces that are off limits to development, such as protected country parks. As a result, Hong Kong faces a shortfall of at least 1,200 hectares -- more than 60 times the size of the city’s Victoria Park -- as it plans for about the next 30 years, according to the Task Force.
The government’s policy of controlling the amount of new land it makes available to developers -- which enables it to earn billions of dollars per year in revenue -- creates scarcity of supply that results in ever higher land prices. Developers say they also face a thicket of regulations in converting private land they purchase for residential use.
Developing caverns was “probably the most expensive” choice and would take longer than some alternatives. Tapping developers’ holdings of farmland, developing “brownfield” sites -- former agricultural land -- or building on land used for recreation were among swifter options, the task force said.
Cramped homes and soaring property prices are signs of the crisis that sees Hong Kong regularly named the world’s least affordable city to buy a home. As the public argues the merits of converting land on the edges of country parks or redeveloping the golf course that’s home to the historic Hong Kong Golf Club, one business leader had a different idea this week.
Frederick Ma, the chairman of MTR Corp., which runs the city’s subway system, told the South China Morning Post on April 23 that one option was to build a “Hong Kong town” in mainland China, linked by high-speed rail.
©2018 Bloomberg L.P.