As Hong Kong seeks to boost housing supply, flexibility is key to urban renewal
When Leung Chun-ying campaigned for the chief executive's post in 2012, he rightly made affordable housing one of his key election platforms. Three years have passed and we have yet to see words translated into action. While the government is already exhausting its options to release more land for housing, the effectiveness of such measures is another matter. A case in point is the proposal to redevelop old housing blocks owned by civil servants. Tenants say the rules are so restrictive that redevelopment will be difficult, if not impossible.
The blocks were built decades ago under the Civil Servants Cooperative Building Society Scheme, a government initiative to help public servants build their own flats. As they are usually low-rise buildings in prime urban areas, it is estimated that redevelopment can yield an extra 50 units at each of the 85 sites. The units will be acquired by the Housing Society at a price expected to be slightly higher than market value. But owners are required to repay two-thirds of the land premium to the government. Additionally, redevelopment must come with the consensus of all owners, unlike some urban renewal projects that can go ahead even if only 80 per cent agree.
The proposal is worth exploring because it can generate some 4,000 new flats. But residents' concerns must be addressed. Representatives at a Legco hearing said getting every owner on board would be next to impossible. The steep land premium would dampen any incentive they might have to sell the units. But officials insist on charging the land premium, arguing that the land was granted with substantial concessions. It would be unfair to other subsidised flat owners if the rules were bent for civil servants' flats, they said.
Experience shows that the bar for urban redevelopment should not be set too high. It is meaningless if the scheme fails to attract property owners. Given the potential gains from redeveloping these flats, greater flexibility is needed.