Planning and development control through lease conditions

The Hong Kong government has pledged to deal with the imbalance between supply and demand of housing. Given the innate constraints of limited land resources in Hong Kong and the extensive and expedient control enforced through lease conditions, the Hong Kong government can alleviate the long-recognized problem of housing shortage by modifying specific development conditions. Therefore, the supply of housing units can be changed at a faster pace to satisfy the requirement of private dwellings. Other factors affecting the property market in Hong Kong include land supply, economic issues, population growth, and income growth. Many studies, for example, Hui et al. (Monograph, Department of Building and Real Estate, Hong Kong Polytechnic University and Hong Kong Government (Study of Housing Demand, Hong Kong Government Printer, Hong Kong and Study of Housing Demand Model, Hong Kong Government Printer, Hong Kong), have investigated in detail the impacts of these factors on the property market. However, little or nothing is known about the planning and development control through lease conditions. Therefore, this study particularly attempts to examine how the Hong Kong government exerts its influence in the local private residential market through changing the development conditions. These conditions will be studied separately and distinctively in order to capture their unitary effects upon the local private residential real estate market. Section 1 looks at Hong Kong's tenure system, followed by the deliberation of how planning and development control is done through lease conditions (in Section 2). Sections 3 and 4 set out the analytical framework and report on the findings of how lease conditions affect property supply. The concluding section gives out recommendations.