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Hong Kong housing

New authority to guard against collusion when building on farmland would just mean more red tape, Hong Kong developers’ group says

Real Estate Developers Association says body would be an additional layer of bureaucracy, further slowing process of developing land to ease housing crisis

PUBLISHED : Friday, 21 September, 2018, 11:26pm
UPDATED : Saturday, 22 September, 2018, 2:22am

An association that represents Hong Kong’s major developers has protested against having an independent body guard against collusion in any efforts by the public and private sector to jointly build homes on large tracts of abandoned farmland.

The Real Estate Developers Association said the body would be an additional layer of bureaucracy, further slowing the process of developing land to ease Hong Kong’s housing crisis.

Its remarks were in a letter on Friday to a government-appointed committee tasked with proposing ways to plug a predicted shortage of 1,200 hectares of land for long-term housing and economic development in the world’s least affordable property market.

The association said that developers already paid the government a land premium – a sum of money to use the site in a certain way that reflects its value after development – and that this was working efficiently.

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“Any additional approval procedure, be it in the form of an [authority] or an advisory committee, is bound to create an additional layer of bureaucracy with the risk of adding uncertainty, inefficiency and delay to the already difficult land conversion process.”

The committee, known as the Task Force on Land Supply, has spent the past five months consulting the public on 18 possible land options.

Developers hold 1,000 hectares of farmland in the New Territories but have found it difficult to use the area because the sites are too remote, a lack of infrastructure and rules on low density building, meaning they cannot pack in as many flats as they might like.

The task force proposed the government offer incentives to developers to nudge them into action and, in return, for the companies to commit to offering a specific proportion of affordable homes.

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But members of the public cast doubt on the suggestion, saying such collaboration would be open to collusion. It prompted the task force to mull the establishment of an independent body to oversee such cooperation.

The association disagreed. It urged the government to increase development density to spur more developers into action. In exchange, it said, a proportion of the site could be surrendered to the government for developing affordable public sector housing.

To increase transparency, the association suggested the government disclose the rationale behind the setting of the premium.

Lee Wing-tat, chairman of concern group Land Watch, said he also disapproved of setting up a body, especially a statutory one, because it would take years to pass through the city’s legislature.

He added that it would be difficult to find members really independent of businesses and developers, so those in the government would still be the best to oversee the public-private cooperation.

Lee believed the best way to ease public suspicion of collusion would be for the government to claim 70 per cent of the increased development density for developing public sector housing.

“Most of developers’ attempts to develop farmland have previously failed because these sites are too far away and there is no infrastructure,” Lee said.

“Now the government is giving them an opportunity to release the sites’ potential. The government has the bargaining power for a better deal.”

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Chan Kim-ching, founder of land concern group Liber Research Community, said the association’s opposition proved the land supply consultation could not even find a consensus among those who might benefit the most from the public-private cooperation proposal.

He said the government should make use of its power to buy back all the privately held farmland.

The public-private partnership proposal is one of five most talked-about land supply options the task force will submit to Chief Executive Carrie Lam Cheng Yuet-ngor on Monday for her to prepare her policy address on October 10, chairman Stanley Wong Yuen-fai said.

After a Friday meeting, where the task force discussed how to form the submission, Wong said the other four options included reclamation, developing country park peripheries, developing damaged agricultural land known as brownfield, and building on a golf course in Fanling.

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Wong said that the submission would only include what the public had said about the options so far, but that there would be no analysis to indicate the amount of support or opposition behind each one.

As the five-month consultation will end only next Wednesday, Wong said the final analysis would not be completed until the end of the year.