Wires

UPDATE 4-Hong Kong leader aims to ease the housing crunch inflaming protests

Clare Jim and Twinnie Siu

* Heckling forces unprecedented cancellation of live address

* Lam delivers policy address by video feed

* Pledge to drastically increase number of housing projects

* Property sub-index rises more than 2% after address (Adds details throughout)

HONG KONG, Oct 16 (Reuters) - Hong Kong leader Carrie Lam announced measures aimed at easing a housing shortage on Wednesday as she battles to restore confidence in her administration and address widespread discontent after four months of anti-government protests.

Lam had earlier been forced to abandon her annual policy address after some lawmakers jeered as she began speaking, causing an unprecedented cancellation of the speech in the legislature of the Chinese-ruled city.

The Beijing-backed Lam later gave her speech over a video feed, saying her government would drastically increase the number of housing projects and accelerate the sale of public housing schemes.

Anger over sky-high property prices, especially among the city's young people, is widely believed to have fuelled the at times violent protests that have rocked the city for months.

The measures Lam announced are among the boldest in recent years to take back large tracts of land held by a handful of powerful developers.

"We are determined to create home ownership opportunities for people of different income groups such that they will happily make Hong Kong their home," Lam said.

"I hereby set a clear objective that every Hong Kong citizen and his family will no longer have to be troubled by or pre-occupied with the housing problem, and that they will be able to have their own home in Hong Kong."

Lam, who has rejected calls to step down, said about 700 hectares of private land in the city's New Territories would be brought back into public use under what is known as a land resumption ordinance.

More than half of the allocated land would be taken back in the next few years, she said, adding that a further 450 hectares had been earmarked for "resumption".

Major developers, including Henderson Land, New World Development and Sun Hung Kai Properties , are sitting on no less than 1,000 hectares of agricultural land, according to government estimates.

Lam urged all developers to support the land ordinance. No further details were given as to how the process would work and which developers would be involved.

The Hong Kong stock exchange's property sub-index rose more than 2% after the measures were announced.

Before Hong Kong returned from British to Chinese rule in 1997, the colonial administration often deployed the ordinance to take property for public use, offering compensation to landowners.

But no leader has been able to successfully take back land from private developers since the handover.

FIVE DEMANDS

Earlier, pro-democracy lawmakers shouted "five demands, not one less" as they heckled Lam, who faces immense pressure to regain trust and resolve the city's biggest political crisis in decades, in a disruption that forced the meeting to be adjourned twice.

The dissenting legislators managed to project the call for "five demands, not one less", which has become a pr-democracy movement rallying cry, onto a backdrop behind Lam as she tried to deliver her speech.

The demands include universal suffrage and an independent inquiry into what they say has been excessive force by police in dealing with demonstrations.

Some of the protesting lawmakers wore masks of Chinese President Xi Jinping inside the chamber.

Pro-democracy legislator Tanya Chan said Lam was to blame for Hong Kongs chaos.

"Both her hands are soaked with blood, an emotional Chan said at a news conference after the policy session was adjourned.

"We hope Carrie Lam withdraws and quits. She has no governance ability ... she is not suitable to be chief executive.

Security was tight ahead of Lam's third policy address, with riot police and water cannon on standby.

She was speaking hours after the U.S. House of Representatives passed three pieces of legislation related to the Hong Kong protests, drawing a swift rebuke from Beijing, which accused the lawmakers of "sinister intentions" of undermining stability in the Asian financial hub.

One of the measures, the Hong Kong Human Rights and Democracy Act, would require the U.S. secretary of state to certify every year that Hong Kong retained its autonomy in order to keep receiving the special treatment that has allowed it to be a major financial centre.

Lam has ruled out making any concessions to the protesters in the face of escalating unrest, saying, "Violence would only breed more violence."

RAINBOW

Protesters are angry at what they see as Beijing's tightening grip on the city which was guaranteed 50 years of freedoms under a "one country, two systems" arrangement upon its return to China.

Beijing rejects that accusation and says Western countries, especially the United States and Britain, are stirring up trouble.

Lam said her government would uphold "one country, two systems" while she warned that Hong Kong's economy was suffering badly, with the city expected to enter a technical recession in the third quarter. The labour market is facing layoff pressure in the short term, she added.

Authorities have arrested more than 2,300 people since June when the unrest escalated, scores of them teenagers, some as young as 12 and the oldest 83.

Ending her address on a positive note, Lam said the city faced its "most formidable challenge" since 1997, but by restoring law and order, it would "emerge from the storm and embrace the rainbow". (Reporting By Donny Kwok, Clare Jim, Sarah Wu, Twinnie Siu, James Pomfret and Jessie Pang; Writing by Anne Marie Roantree and Farah Master Editing by Robert Birsel)