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Kenneth Ko

OBSOLETE buildings, overcrowding and poor environmental conditions are thorns in the flesh of a society as modern as Hong Kong.

 Urban renewal has become an increasingly important means of economically rejuvenating dilapidated areas of the territory.

  The Government, in a show of support for the resource-intensive and time-consuming process of urban redevelopment, has recently come up with a package of recommendations that attempts to address the problem.

    One proposal encourages private developers to take on commercially 'non-viable' urban redevelopment projects, together with profitable projects, under a linked-site approach.

  In addition, the Hong Kong Housing Society has been urged to provide rehousing for people affected by urban renewal projects.

  The proposals also touch on property acquisitions and compensation for affected tenants and commercial operators.

  Details and public responses to the recommendations, which are open for consultation until mid-October, will be discussed in part two of this series.

  Essential to any discussion about urban renewal are the efforts of the quasi-public Land Development Corp (LDC), which began operations in January 1988.

  But it was in the 1960s, well before the LDC came into existence, that the Government first began to tackle the issue of urban renewal.

  An Urban Renewal Pilot Scheme for Hong Kong was first proposed by The 1965 Report of the Working Party on Slum Clearance.

  In 1969, approval was given for the then Public Works Department to conduct a planning and engineering feasibility study for a 13-acre area bounded by Queen's Road Central, Queen's Road West, Hollywood Road, Shing Wong Street and Gough Street.

  Thomas Ho, property director of the Mass Transit Railway Corp, joined the Public Works Department in 1976 as part of the team overseeing the pilot scheme.

  He described it as a 'very successful' programme for urban redevelopment, which involved the participation of almost all government departments.

  Various departments played a part in acquiring and then demolishing old properties, amalgamating building lots or developing roads, sewage systems and other facilities in the area, he said.

  Under the pilot scheme, sites suitable for redevelopment were subsequently sold by public auction to developers.

  Under the present system, however, the LDC itself acts as the redeveloper or takes on a joint venture partner after acquiring and clearing private lots and properties.

  Mr Ho said the pilot scheme, which was launched between the 1970s and early 1980s, drew strong objections from the public, especially from those who were tenants or owners of flats in the buildings in question.

  'Many properties included in the pilot scheme were pre-war buildings which were badly in need of redevelopment,' he said.

  'Some buildings were even declared dangerous properties.'      Despite opposition from property owners and residents, the Government managed to see the pilot scheme through by taking over private land for public purposes under the Crown land resumption ordinance.

  Property owners affected by the scheme were given compensation in accordance with market values, tenants were rehoused, and commercial operators were compensated with allowances.

  People who were dissatisfied with the amount of compensation could lodge claims with the Lands Tribunal. In 1979, the pilot scheme had advanced to the stage where all private lots affected had been acquired and substantially cleared.

  The land auction programme was completed in 1981. Accumulated revenue derived from the sites that were auctioned was $625.5 million.

  The sites the Government accumulated through the land resumption ordinance were eventually sold at auction to private developers, again drawing fire from the public.

  There were claims of collusion between the Government and developers.

  Analysts said it was against this background that the Government decided not to launch another pilot scheme but floated the idea of forming a development corporation to carry out future urban renewal programmes.

  In 1982, the Special Committee on Land Supply appointed a working group to study the possibility of increasing private sector participation.

  Following the enactment of the Land Development Corporation Ordinance 1987, the LDC was established in December 1987.

  The corporation is empowered to negotiate the surrender of existing properties and to oversee large-scale urban redevelopment.

  Analysts said the Government created the LDC out of a belief that a separate authority was both desirable and necessary to facilitate urban renewal.

  Unlike private developers that only take on commercially viable projects, the LDC may undertake projects that are unlikely to be profitable.

  With the exception of the chief executive, who serves on a contract term basis, board members of the LDC, including government representatives, are appointed by the Governor for a period of two years.

  As part of the process of acquiring property, the LDC is required to look after various interests in redevelopment areas and to offer reasonable prices, compensation and proper rehousing provisions.

  The LDC's ability to invoke the Government's land resumption powers has turned out to be a controversial weapon that has been denounced by affected property owners and tenants.

  Analysts said there were fears that the LDC was counting on Government support to press ahead with its urban redevelopment projects, despite objections.

  The pros and cons of a comprehensive urban renewal programme were also open to question, according to some analysts.

    'Large-scale comprehensive urban redevelopment could deprive people of their development rights and freeze the value of people's properties within the affected areas,' one surveyor said.

  Redevelopment projects undertaken by private developers had merit and accounted for a large proportion of the new supply of properties in urban areas, they said.

  One developer said single-block redevelopments had a role to play in urban renewal, citing Man Ying Building in Kowloon.

  But LDC chief executive Abraham Razack has a different story to tell.

   Next week, Property Post will look at his views on LDC's achievements and difficulties in urban renewal, conflicts between LDC and property owners' interests, as well as criticism of the statutory body.



Slums pose renewal challenge