An evaluation of the tenants purchase scheme (TPS) : whether it is feasible to be restarted

Abstract

Hong Kong, such an international metropolis, is well known for its free market with limited government interventions. In terms of the housing sector, the Hong Kong government always plays an important role to maintain the sustainable housing development. Thus, lots of housing policies were introduced in the past several decades. One of them was the Tenants Purchasing Scheme (TPS)released in 1998, which helped the tenants of Public Rental Housing to purchase their flats with a great discount. However, as being blamed by its adverse effect on the housing market, the TPS was suspended in 2002. Since the housing price kept growing in the last several years and the pursuit of home ownership became much more difficult, the feasibility of restarting TPS has been widely discussed. However, the Hong Kong government has clearly stated that it will not be restarted due to limited amount of PRH flats and the large number of applicants in the Waiting List (WL) of PRH. After series of investigation, it is assumed and proved that a new TPS can be an effective way to promote home ownership under Hong Kong’s special circumstance. If the payment of land premium is adjusted and more PRH tenants are able to purchase their flats, the conflict between housing supply and housing demand can be lessened. In this way, more citizens are to become property owners and the public housing recourses can be better used.