Illegal use of Hong Kong industrial space leaves only one option: make tenants responsible

The Ngau Tau Kok fire in an industrial building used for private storage has highlighted the dangers of the government’s policy of looking the other way

PUBLISHED : Monday, 08 August, 2016, 5:46pm
UPDATED : Monday, 08 August, 2016, 10:53pm

Currently, businesses that fall outside “industrial and/or godown” use but which are inside industrial buildings are deemed to have breached their land lease

SCMP, August 7

We still have a substantial manufacturing base in this town, judging by raw property figures that show 181 million square feet of flatted factory space.

As the first chart makes clear, however, there is something odd here. Restate these figures as an index in which the stock of factory space in 1996 was 100 and you get a present index figure of about 92, indicating a gradual decline over the years.

Do the same for manufacturing production over the last 20 years and your current figure is only about 59, a much steeper decline.

Clearly this indicates that there must be a good number of unused flatted factory buildings. If we choose not to tear them down, can we not put them to a wider range of uses?

No, we may not. The Lands Department has in hand a 2003 Court of Final Appeal ruling, Raider vs the Secretary for Justice, which tells developers and users, “No way, not unless we allow you!” And the department has not.

I cannot blame the CFA for this. It was the law and if people here and there still had trifling moans about it, the law in its majesty had a practised Latin reply to them – de minimis non curat lex – (the law ignores trifles).

To which the triflers then made their own reply – de lege non curant minimes – (Well, if you’re going to be stupid about it, then devil take the law).

People everywhere simply took it on themselves to put industrial space to other uses in defiance of the law

And I know that this is what they said because the second chart tells me so. Almost at the same time that the Raider ruling was pronounced, flatted factory rents, which had been going down in line with falling manufacturing activity, began to rise steeply and have continued doing so.

Rather than wait for a Lands Department which moves as fast as a gravestone in responding to changed circumstances, people everywhere simply took it on themselves to put industrial space to other uses in defiance of the law.

The figures say this defiance has been general and pervasive across our city, so much so that there is really no glut of factory space at all. It is in short supply and in great demand for homes, offices, almost anything you care to mention. Rents in the industrial market are firmer than in the residential one.

And now we have a problem. The Ngau Tau Kok fire in an industrial building used for private storage has highlighted the dangers of the government’s policy of looking the other way.

Comprehensive enforcement of the law will not work any longer. We risk economic dislocation. The government has let things go too long. Legalising the breaches will also not work. We will just get another Ngau Tau Kok fire soon.

I suggest a third way. Make all the tenants in any building responsible for the dangerous practises of any one of them. If one offends, shut them all down.

And, you know, I think it’s the solution to which the government now leans.

business-article-page