The government is aiming to reclaim 1,700 acres (688 hectares) off Lantau Island, stated the city’s Chief Executive Carrie Lam in a policy address on Wednesday. That compares with the 1,670 acres of extra land that a previous government report estimated the city needed through 2046.
“Finding land is the pressing problem that we need to tackle urgently,” Lam told the city’s legislators. “We must make bold decisions.”
Land reclamation in the notoriously crowded Hong Kong has long been a controversial option to boost the supply of homes due to environmental concerns. However, public outrage over a crisis in housing affordability is encouraging officials to act, even as the property market is showing signs of cooling after years of stratospheric gains.
To mitigate opposition to reclamation, Lam has stated that most of such land will be earmarked for subsidised housing. As many as 1.1 million people could live on the artificial islands, according to her. This is about 15% of Hong Kong’s current population. The first phase of reclamation work would start in 2025, with people being able to move in by 2021, said Lam.
Other measures would include: allocating about 70% of new land to public housing; moving faster to convert so-called brownfields sites, such as deserted rural land in the New Territories, to residential use; and setting up a land sharing pilot program that could turn land held by developers into projects that accommodate both public and private housing.
An almost 15-year bull run in prices prompted UBS Group AG to name Hong Kong as the the city which is most at risk of a housing bubble last month. Still, due to rising mortgage costs—the city’s prime rate was increased for the first time in more than a decade last month.
This has weakened valuations and banks are beginning to trim their property valuations.