Compensation in the works for businesses on bulldozed brownfield sites

Business operators on brownfield sites that will be bulldozed to make way for new development may finally be eligible for compensation after years of being squeezed out due to outdated policy, according to a government proposal.

Under the current system, businesses that operate on private agricultural land are eligible for government compensation in case of land resumption only if they are covered by a 1982 squatter structure survey or had their licenses issued before 1982.

However, the lack of urban land has pushed many operators of garages, car parks and container storage facilities further afield to degraded agricultural land in the New Territories over the past two decades.

Why brownfield sites are a greener option for housing development in Hong Kong

These business operators are not eligible for government compensation and have to resort to time-consuming and complex claims for disturbance payments.

With the policy extension, business owners who have operated for at least 10 years prior to a government pre-clearance survey can claim a maximum payment of HK$1.95 million for 54,000 sq ft of open-air operations.

Operators can claim allowances for covered areas at a rate of HK$115,500 for the first 269 sq ft and HK$2,310 per 11 sq ft thereafter.

“The [current] arrangement fails to acknowledge the hardship caused to those business undertakings which have been in existence lawfully for an extended period of time ... having invested substantial amounts in the business operations over the years,” a paper submitted by the Development Bureau to the Legislative Council on Tuesday stated.

A government source said the policy extension signifies a government move to pave the way for the clearing of brownfield sites for development, an idea that has been facing public scrutiny and controversy in the past year.

The government has been under fire for giving in to pressure from powerful rural leaders with vested interests in brownfield sites after setting aside a plan to develop public housing on a damaged site in Wang Chau.

The controversy has pushed the government to conduct a feasibility study on transforming the city’s 1,192 hectares of brownfield sites, which account for 1 per cent of Hong Kong’s total land area.

The paper stated that there was a need for the policy to be reviewed at this time.

“This is particularly the case when it is expected that many of the land clearance exercises for major land development projects in the pipeline involve a substantial number of such business undertakings with outdoor or open-air business operations,” it said.

A number of plans for upcoming large-scale development in the New Territories involve brownfield sites. Hung Shui Kiu in Yuen Long encompasses 190 hectares of brownfield sites, or 26 per cent of the entire development area, to provide homes for 218,000 residents and 150,000 new jobs by 2024.

In Kwu Tung in the northeast New Territories, hundreds of squatter homes and numerous businesses will have to make way for 60,000 new flats, which are set to accommodate 174,000 residents by 2023.