Comment by pca006132 | Hacker News Reader

Comment by pca006132 | Hacker News Reader

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Yes, but I don't think this is just a recent trend.

In Hong Kong, we spent over half of our income for rent [1]. Median per capita floor area for accomodation of 15 square metres, with some people living in subdivided flats with per capita floor area of 5.3 square metres [2]. The average waiting time for public housing is 6.1 years [3], note that public housing are government provided housing available with lower rent for low-income households, which are much cheaper and larger than subdivided housing mentioned previously. The median house price is about 20 times the median family income [4].

Yes, we know that this is a problem. But the government officials don't have incentives to tackle this problem. In fact, about 1/5 of the government income comes from selling land [5], so they probably can't fix this problem and keep the same spending without increasing tax. Let alone many officials are related to this sector or hold many properties.

[1]: https://www.thestandard.com.hk/breaking-news/section/4/17694...

[2]: https://www.bycensus2016.gov.hk/en/Snapshot-09.html

[3]: https://www.scmp.com/news/hong-kong/society/article/3177511/...

[4]: https://www.chinadailyhk.com/article/119131

[5]: https://www.budget.gov.hk/2019/eng/io.html

But how would you tackle it without making the problem worse?

In Hong Kong, it's not a problem of over-densification. There's loads of unused land, but the government is incentivised to keep it empty and not zone it for high-density residential. When they do sell off a small parcel of land for new development, they auction it off leading to obscene land prices.

That's what OP means about there not being an incentive for the government to lower cost of living. The high cost of living is subsidising HK's notoriously low taxes.

There's a pretty good YouTube video about it: https://www.youtube.com/watch?v=hLrFyjGZ9NU

Oh and to answer the question, the solution is to zone lots more high-density residential, sell a lot of land for less money, and stop subversively taxing the poorest citizens via high CoL. Tax businesses and the wealthy to make up for it. But they're not going to do that, because low taxes on businesses and the wealthy is their USP.

Turns out when you optimise a city for business wellbeing at the expense of citizen wellbeing, then it impacts citizen wellbeing...

Fair points. Didn't know about the gov land sales. Honestly I presumed I was going to hear "rent controls!"

No, I don't know. I major in computer science, not economics or public policy. I just think that it is ludicrous that despite every chief executive said that they will tackle this problem, the price just keep rising and statistics keep worsening. They propose some absurd plans like massive 10+ year land reclamation plan [1] to build more houses, despite that there are actually quite a lot of unutilized land in the New Territories.

[1]: https://en.wikipedia.org/wiki/Lantau_Tomorrow_Vision

A high land value tax moves the problem around (instead of young people not being able to buy a house, older folk can't afford to keep the large one they spent their lives in).

In the process, it makes land completely unappealing to rent-seekers while incentivizing high-density development of desirable locations.

> older folk can't afford to keep the large one they spent their lives in

This is only a problem if you believe older folks should continue to live in big luxury houses for a pittance (read: gain the benefits of luxury without having the detriments of luxury), or the country does not have enough smaller housing for them to move.

In situations where housing is severely constrained at the cost of younger people, leaving old people in their large houses should be the last of your concerns. Doubly so for any social structures where older generations are extremely reliant on younger generations (almost every democratic, socialist or communist country).

I certainly feel that way, but the roughly-50% of voters who are either retired or close to retirement seem to disagree.

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