Hong Kong property

Property developers and Hong Kong authorities should co-develop land to increase land supply: think tank

But critics argue public-private model would raise suspicions of collusion

PUBLISHED : Thursday, 27 April, 2017, 9:12pm
UPDATED : Thursday, 27 April, 2017, 10:14pm

A think tank founded by former chief executive Tung Chee-hwa has called on the government to co-develop land held by the city’s property developers, which could contribute to over 9,000 hectares of land that the group said Hong Kong would need in the next three decades.

Our Hong Kong Foundation’s suggestions on Thursday came a day before the end of a public consultation on the government’s 2030 Plus blueprint, which outlines the city’s development directions over the next 30 years and beyond.

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In the long run, the group said, reclamation should be the main way to increase land supply.

“The government needs to adopt innovative plans to meet the massive demand for housing and solve social problems caused by high property prices,” foundation senior researcher William Tsang Wai-him said.

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But critics said a public-private co-development model would raise suspicion of government-business collusion, calling the estimated future demand of land “unrealistic”.

Tsang said Hong Kong’s three major developers – Henderson Land Development, New World Development and Sun Hung Kai Properties – had obtained a combined land bank of almost 1,000 hectares, mostly agricultural land in the New Territories.

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He said developers left such land undeveloped due to lack of infrastructure, town planning restrictions and a need to negotiate premiums with the government.

Tsang suggested the government offer developers incentives, such as providing infrastructure and relaxing density restrictions, in exchange for a certain percentage of land to develop subsidised housing.

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But Chan Kim-ching, a researcher at local land concern group Liber Research Community, said the plan would largely benefit private developers, who had bought the land cheaply years ago, while the government would have to discuss with developers the percentage for public housing.

There will be a huge suspicion of government-business collusion
Chan Kim-ching, Liber Research Community

“It’s more like helping private developers to release the agricultural land they’re hoarding,” Chan said. “There will be a huge suspicion of government-business collusion.”

He added if the government really wanted to develop such land, it could conduct compulsory acquisition of it.

The foundation estimated that Hong Kong would need 9,350 hectares of land in the next 30 years to accommodate residents affected by urban renewal projects and population growth, assuming an average living area per person of 270 square feet for all new flats and a ratio between housing and facilities – commercial areas, hospitals and public space – of 1 to 2.

Foundation researcher Ryan Ip Man-ki suggested five reclamations to meet the demand, which would provide 3,490 hectares, including a 2,200-hectare artificial island to the south of Cheung Chau for relocating the Kwai Chung container terminal and brownfield operations, and a 200-hectare extension of Po Toi Island for relocating existing prisons.

But Chan said the government had shown no intention of introducing a compulsory living area per person for the private sector while the existing one for public housing was only 141 sq ft.

“[The estimation] is much inflated and unrealistic,” Chan said. “It sounds more like a way to justify additional large infrastructure projects.”