Editorial "Tsang Home Ownership Scheme HOS"

Editorial "Tsang HOS"
明報 
10/18/2011


【明報專訊】THE PREMIUM ARRANGEMENT of the new Home Ownership Scheme (HOS), which Donald Tsang unveiled last Wednesday in his policy address, is quite problematic. According to him, the subsidised portion of a unit's purchase price will be regarded as a loan and, when its owner sells it, he may pocket the value increase of that portion. He may use the money to "move upwards" - to buy a flat from a private developer. 


The government would practically give the new HOS flat owner another subsidy to help him to buy a private housing unit or even speculate in property. If it does so, it will depart from the principle of using public money to help citizens to buy their own homes. That is far from right.


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The "Tsang HOS" would divide society and breed discord. First, it would make fish of one group and fowl of another. The premium arrangement applying to old HOS flat owners will remain unchanged. Inconsistent and unfair, the measure would drive a wedge between old HOS flat owners and new HOS flat owners. Second, if the government resorts to "populism" and offers old HOS flat owners the new premium arrangement, it will "maximise" its second subsidies, but people who are not HOS flat owners will consider that unfair.


Donald Tsang actually courted trouble when he came up with the new HOS premium arrangement, unless there is a hidden agenda behind it. Citizens are agreed that an HOS flat owner should repay the government the subsidised portion of his unit when he sells it. Why has Donald Tsang come up with another, unfair premium arrangement? That is very baffling indeed.


We are not saying the old arrangement must stand in any circumstances. If another is more equitable, it is of course worth considering. However, the novel arrangement does not seem more equitable. Clearly, it would lead to social contradictions. 


The government must not stubbornly cling to the new arrangement. It should be so sensible as to have the old HOS premium arrangement apply to the new HOS.
Another essential difference between the "Tsang HOS" and the old HOS is that there is a criterion for determining whether to make new HOS flats available. 


Their availability will depend on property prices. If an eligible new HOS applicant's monthly mortgage repayment is less than 40% of his monthly income or property prices in the New Territories fall to $4,000 a square foot, the government will build fewer or even stop building and selling new HOS flats. Both Donald Tsang and Eva Cheng (Secretary for Transport and Housing) have said that, if there are reasonably-priced flats sandwich-class citizens can afford to buy in the market, none will want to buy HOS flats.


The government denies the criterion is designed to prop up property prices. However, by Donald Tsang and Eva Cheng's logic, should the government not lay down a criterion for determining whether to stop putting up land for auction?


A major aim of the "Tsang HOS" is to "facilitate" the "upward mobility" of those in the new scheme. It should not concern the government whether those who live in their HOS flats can "rise to a higher level". If they have the money to invest in property or "move upward" to luxury residential flats, they will have their own plans. The government need not offer them any subsidies as an inducement.