Urban Renewal Authority must not lose sight of expectations
The record acquisition price for an urban renewal project raises questions about whether the redevelopment is being done in the public or commercial interest
Urban renewal plays an important role in modern development. It breathes new life into decaying districts, ensures better use of space according to changing needs and helps preserve heritage and city character.
In Hong Kong, the term has a somewhat different meaning, though. It evokes images of luxurious residential blocks or high-end shopping malls rather than open space and community facilities for public enjoyment.
Concerns were raised after the Urban Renewal Authority (URA) offered a record-high acquisition price for a redevelopment project in Sai Ying Pun.
With a per-square-foot price of HK$23,568, an owner of an almost 60-year-old, 500 sq ft flat is to receive compensation of about HK$12 million. The prices of the new residential units are estimated to be even higher, raising questions about whether the redevelopment is being done in the public or commercial interest.
Riding a two-year continuous rising trend in the world’s least affordable property market, the record offer is a reflection of the sorry state of affairs. The Sai Ying Pun project is located in a prime area in the western part of Hong Kong Island, where property prices have been soaring since the extension of the MTR’s Island Line.
This is not helped when the URA has a standing practice of pegging any offer to the market value of a seven-year-old flat in the same area. Whether it is just following or reinforcing the runaway market is open to debate.
What is clear, though, is that expectations will become even higher. The record offer is already the third in a row by the URA over the past year, after projects in To Kwa Wan and Hung Hom last year.
Inevitably, property owners in prime areas will expect offers to be equally attractive, if not more so. And if urban renewal becomes increasingly costlier, the incentive for private developers to engage in redevelopment will be even less.
Under its current redevelopment and financing strategy, the authority needs to take on moneymaking and other less lucrative projects. While it should be given sufficient flexibility to maintain fiscal health, it must not lose sight of public expectations. Although providing affordable housing has never been its mission, a statutory body should be prepared to shoulder more social responsibility.