Hong Kong Leader Defends Move to Scale Back Housing Project

  • 2014 decision scrutinized after critic reports death threats
  • Controversy may weigh on Leung’s decision to seek second term

Hong Kong’s leader, Leung Chun-ying, defended his decision to postpone two phases of a massive public housing project in the city’s northern outskirts, as he sought to address allegations that the government made the decision to benefit rural landlords.

“I would ask everyone to look at our decision and our work on these two sites against the background of what we’ve done for Hong Kong to ease the housing-shortage problem," Leung told reporters at the government headquarters Wednesday. “I want to be in charge of these projects because they are rare opportunities for Hong Kong to address in each of the situations the acute shortage of public housing.”

Leung Chun-ying on Sept. 21.

Photographer: Anthony Wallace/AFP/Getty Images

Leung, who must decide soon whether to seek a second five-year term as Hong Kong’s chief executive, has spent much of his tenure struggling to subdue housing costs in the world’s least affordable market. The controversy risks opening the door for potential challengers to lead the city in a vote by a committee of electors next year.

At the center of the dispute is Leung’s 2014 decision to scale back a public housing project in the Yuen Long area to 4,300 units from 17,000 units amid concerns about the impact on local businesses. The move would spare a brownfield site from immediate development while continuing construction on an adjacent green area, displacing residents from three communities.

‘Most Serious Scandal’

Legislator-elect Eddie Chu, whose campaign against rural corruption helped make him a top vote-getter in Hong Kong’s legislative election earlier this month, has alleged that the decision to scale back the development was made to appease rural landlords who operate businesses on the land. Chu has received police protection after reporting death threats that he said probably stemmed from his crusade.

“CY’s reputation will definitely be hurt by Yuen Long," Chu told Bloomberg on Tuesday, using the chief executive’s nickname. He described it as “the most serious scandal.”

Six suspected members of local triad gangs, ages 19 to 53, were arrested in recent days on allegations of criminal intimidation in connection with the threats against Chu, the South China Morning Post newspaper reported Thursday, citing police.

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Leung, whose approval rating fell to a record low this month, hasn’t said whether he’ll seek a second term. A panel of 1,200 electors dominated by Beijing loyalists is slated to meet in March to select a leader for the next five years.

Leung was flanked at the briefing by top ministers involved in housing development, including Finance Secretary John Tsang, a potential rival for the chief executive’s job. Leung said he made the decision based on recommendations from the housing department after consulting local parties. Tsang heads a committee responsible for expanding Hong Kong’s supply of land for housing.

‘You Always Agree With Your Boss’

“I did not take part in any of the consultations with, or the lobbying of, anyone outside the government,” Leung said Wednesday. Rising rents and prices should be arrested as a record number of new units under construction are completed over the next three or four years, he said.

Tsang, who said in July he would be “willing” to run for chief executive, played down the potential of any rift between him and Leung over the project. “You always agree with your boss. No question about that,” Tsang said.

Leung said the plan was always to build the remaining units, although officials said no start dates had been set. “The important thing is we did not abandon the rest of the phases,” Leung said.

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