How Carrie Lam can revitalise Hong Kong’s land supply and public housing targets in next decade
- At present, land resumption seems to be the most feasible way to overcome the acute land supply shortage
- To achieve a win-win outcome in public-private collaboration, the development of agricultural land or brownfield sites should be reinforced
Through her annual policy address, Chief Executive Carrie Lam Cheng Yuet-ngor has highlighted the government’s awareness on the severity and urgency of public housing supply in Hong Kong.
In 2019, she announced a plan to invoke the Land Resumption Ordinance to resume three types of private land for developing public housing and so-called “Starter Homes.” In 2020, she identified 330 hectares (815 acres) of land for the purpose, and said demand for 301,000 units under the official Long-Term Housing Strategy for the next 10 years can be met.
The land supply will mainly come through New Development Areas, part of the Fanling Golf Course and various brownfield clusters, which possess development potentials and rezoned sites reserved for public housing development.
Last October, 11.8 hectares of land was resumed for the implementation of the first phase development of Hung Shui Kiu-Ha Tsuen New Development Area, reserving lots of time and effort in achieving the overall 441 hectares development area in three phases through 2037.
Most of the government’s proposed plans on increasing land supply will take over 10 years, before they can be realised. At present, land resumption seems to be the most feasible way to overcome the acute shortage.
In her 2019 address, Lam announced 700 hectares of private land would be resumed, of which some 400 hectares were earmarked for the next five years. This amount is, however, 20 hectares above the level resumed in the previous five years.
The slow progress suggests the government needs to step up the efficiency and effectiveness of current land resumption practices to revitalise land supply and public housing developments. Next, it should address the long-term planning strategies in the New Territories.
In public interest, the government could take initiatives in the developing public housing or subsidised housing to better utilise land resources and improve the quality of life of the city’s population.
The Task Force on Land Supply in 2018 proposed to adopt a public-private partnership (PPP) approach to speed up housing development through collaboration with private developers.
To achieve a win-win situation for both parties, the development of agricultural land or brownfield sites should be encouraged and reinforced.
The government could also consider introducing specific terms in lease modification and land use changes, requiring developers to take part in the construction of public rental housing, subsidised housing or relevant infrastructures.
Under the PPP arrangement, the developers could either sell all public facilities to the government, deduct development costs from the land premium, or relax the plot ratio as well as building height restrictions as an incentive.
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Towards this end, it is necessary to establish a transparent application and approval system to prevent the possibilities of benefits transfer. This should be done to pre-empt or alleviate public concerns about any collusion between the government and private developers.
To gain public confidence and improve system transparency, I agree that all information regarding the entire approval and decision-making process, land premium payment, infrastructure and projected costs should be disseminated to the public.
As for the implementation, the government could consider engaging professionals from different sectors, particularly real-estate experts, to monitor the overall process and advise on its progress.
The level of transparency and fairness delivered to the public under the PPP arrangement can be enhanced by outsourcing the consultancy work on the planning and development of infrastructure and housing developments to professionals.
It is anticipated the surging demand for land resources and the housing shortage could eventually be resolved by streamlining the application procedures or by outsourcing part of the work to the real estate professional firms.
Chiu Kam-kuen is international director and chief executive of Greater China at Cushman & Wakefield