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Hong Kong housing

Developers open to partnership with Hong Kong government on public-private housing, but quota ‘down to calculation’

Companies call for model on proposal, saying cooperation cannot be based wholly on carrots by authorities dangled in form of infrastructure

PUBLISHED : Wednesday, 26 September, 2018, 4:19pm
UPDATED : Wednesday, 26 September, 2018, 10:21pm

Property developers in Hong Kong have said they are open to a partnership with the government to free up vast stretches of farmland for housing but added the number of public flats set aside for each plot would be “all down to calculation”.

The comments by the Real Estate Developers Association centred on a proposal which involves offering amenities and infrastructure for private companies to develop land, in return for a proportion of flats set aside on each plot for affordable public housing.

The association said there was no definite answer to the amount of flats designated for either side.

“It’s all down to calculation. Even if the government builds infrastructure or widens roads, those are all factored into the land premium developers have to pay, it’s not just for the benefit of us developers,” said Stewart Leung Chi-kin, chairman of the association’s executive committee.

The land premium is a sum of money calculated by the Lands Department that reflects the plot value after development.

“The government should propose a model and we can all just sit down and discuss this together,” Leung said.

The association’s views came as a five-month public consultation on how to plug a predicted shortage of 1,200 hectares of land for the city’s long-term needs ended on Wednesday.

The Task Force on Land Supply, a government-appointed panel which led the consultation, said it received more than 28,000 answers to online and paper questionnaires and conducted random phone surveys with 3,000 respondents over the period. It also received more than 65,000 suggestions from various groups in society.

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Stanley Wong Yuen-fai, chairman of the task force, said the response was sufficient to accurately reflect public opinion on the issue.

Tapping into some 1,000 hectares of private farmland in the New Territories was one of the 18 land supply options listed in the consultation. However, vast tracts of land have been left idle because the sites are too remote, lacked infrastructure or because of stringent rules on building in low-density areas, meaning developers cannot pack as many flats into a project as they may want.

The task force proposed the government offer incentives – such as providing basic infrastructure like roads, sewage and water supply facilities – to nudge developers into action. In return, the companies would commit to offering a specific proportion of affordable public housing.

Leung said a public-private partnership model would be a win-win solution for the government, developers and Hong Kong residents, as it would provide land supply relatively quickly and also help shorten the waiting time for public housing.

However, he said the government needed to increase manpower and cut red tape for such collaboration.

Members of the public have cast doubt on the proposal, saying such collaboration would be open to collusion between the government and businesses. The scepticism prompted the task force to mull the establishment of an independent body to oversee such projects, if they proceed.

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The association said an independent body would not be necessary as the current existing mechanism was “well tried and tested”.

Meanwhile, legislators from the two biggest pro-establishment parties have also on Wednesday called on the government to give greater consideration to transport when developing land for housing.

Alice Mak Mei-kuen from the Federation of Trade Unions and Edward Lau Kwok-fan from the Democratic Alliance for the Betterment and Progress of Hong Kong said any option to increase land supply should go hand in hand with comprehensive planning on transport. They added consideration was needed on whether infrastructure could accommodate increased capacity, instead of focusing only on the debate over the number of flats built.

Both lawmakers also said it was necessary to set up a new committee to deal with such projects. Mak added that rules could be set up to punish stakeholders, such as banning them from other future projects if they failed to deliver on the commitments.