Hong Kong’s shortage of land is one of the biggest problems facing our city today. The Task Force on Land Supply’s five-month public consultation, which came to a close at the end of September, proposed 18 options ranging from short- to long-term solutions and conceptual options. The Chamber has submitted its proposals to the Task Force, which are summarised below.
Long-term and reliable
At the end of the consultation process, the Government should map out a long-term, stable and reliable land supply plan with a clear deliverable timetable.
This plan should not only cater for organic population growth and social and economic development, but also address the community’s aspirations for better living space. It should also consider issues relating to an ageing population, the trend of smaller households and other changing needs in society.
For such a plan to succeed, the Government must show that it has the will and determination to put in place policy measures that are in the best interests of the general public and the long-term prosperity of Hong Kong. As the Task Force has pointed out in its consultation paper, the challenge is not so much a shortage of ideas, but the lack of “broad consensus on the pros and cons, trade-offs and priorities of the various land supply options.”
To overcome this, the Government must provide strong leadership and commitment to resolve the issues that Hong Kong has faced today and over the longer term.
Expediting the process
Once a comprehensive plan has been clearly devised, concrete actions should be taken to expedite the process.
The Chamber has long been urging the Government to speed up and simplify the development process, as well as the town planning process. Furthermore, some of the options discussed have previously been subject to detailed consultation – such as the East Lantau Metropolis and reclamation outside Victoria Harbour – or are already being implemented, as in the suggestion to develop caverns and underground space.
We also note from the 2010 Policy Address that the then-Administration put forward the initiative to “build up a sufficiently large land reserve over a period of time to ensure stable land supply for the residential property market.” It is clear that there are already policy directions in these areas and the next logical measure is to step up their implementation.
The Chamber recognizes the urgent need to address the acute shortage of affordable housing. This shortage has led to significant frustration from an increasing proportion of the community who simply cannot afford high-cost housing.
The development of a housing policy that reflects the urgency of this issue would play an important role in restoring the harmony that is such a critical part of a healthy society and business-friendly environment. This is particularly important for Hong Kong’s young talent, who may see brighter prospects overseas where their aspirations to buy their own home are significantly more attainable.
Dedicated policy bureau
Currently the management of land and housing is divided between the Transport and Housing Bureau and the Development Bureau, and it is unclear which has the ultimate authority. The Chamber has advocated that all land and housing-related policies should be administered under a single policy unit. This bureau would have the authority to determine and prioritize land sites and development for different land uses.
Reclamation
On enhancing land supply, the Chamber agrees with the Government that a multi-pronged approach should be adopted on four points:
(a) creating new land;
(b) redeveloping old districts;
(c) increasing plot ratio; and
(d) rezoning land uses / modifying leases / redeveloping and converting industrial buildings.
In making new land available, we support the proposal for reclamation outside Victoria Harbour, in areas where the ecological impacts are low. This is one of the options where a large piece of land could be created with greater flexibility to fill the shortage gap.
Unlike other options, reclamation would not adversely affect existing land users, and so would avoid the time-consuming process of tackling issues relating to private land resumption or household resettlement. Moreover, the Government could make use of reclamation to build up a land reserve for Hong Kong’s future development, similar to the practice in the 1980s and 1990s.
Farm land, brownfield and greenbelt sites
Hong Kong is arguably not short of land. As noted in the consultation paper, there is a readily available supply of land that could be converted. Hence, an option that could be pursued in parallel to reclamation is rezoning and development of abandoned farm land and brownfield sites.
Concerns have been raised over the amount of time needed for land resumption for such sites. Therefore we suggest that consideration be given to reviving the practice of issuing Letter B land exchange entitlements. This would have the benefits of expediting the process and – by allowing the letters to be freely tradable – provide market transparency in determining prices.
We all treasure our precious greenbelt areas that provide a “green lung.” Therefore we should not consider encroaching on our country parks, or facilities that provide venues for international sports activities, train Hong Kong athletes for international competitions and provide essential recreation space for residents.
However, farm land and brownfield and greenbelt sites which are proven to be of low economic or conservation value in their current state should be put to their fullest uses. Altogether, they could produce more than 1,700 ha of land (including 1,000 ha private agricultural land and 760 ha brownfield sites) for use in the next 30 years.
Respecting private property ownership
A city’s competitiveness depends not only on its economic development, but also on the extent to which it upholds the rule of law. In that regard, it is imperative that the right of private property ownership should be protected and respected.
The non-renewal of long term leases, such as private recreational leases, should be considered as a last resort and only if overriding public interest justifies doing so. Hong Kong’s free market system, ability to attract investors and economic success depend on stable and reliable property rights.
In addition, the amount of land that would arise from such a rezoning exercise would fall far short of market needs. We support the proposal to promote more equitable use of such sites by enabling greater public access as this would enhance their value to the community without surrendering their recreational, cultural, ecological and “open space” values.
At the same time, it is important that private sports clubs be allowed to operate under a climate of certainty so that they can continue to support the development of sports in Hong Kong and to provide consumers with a choice.
Welcoming public-private partnership
Land rezoning and land exchange were once important sources of land supply for Hong Kong. The Chamber supports the use of the public-private partnership (PPP) model to develop private agricultural land in the New Territories. In doing so, we agree that a fair, open and impartial mechanism should be established to deal with all matters relating to PPP projects.
We also suggest the setting up of an independent body should include selecting sites for development, assessing applications, and determining the proportion of public and private investment and the split between public and private housing.
Land for all purposes is needed
Hong Kong not only suffers from insufficient living space for its residents, but also for doing business and catering for our future needs such as smart city and new economy developments. The Chamber considers that a holistic approach should be undertaken to enhance land supply for office, retail, MICE, storage space, government, institutional and community facilities (GIC), open space, and transport and infrastructure facilities.
Hong Kong cannot afford to waste time with endless conflict and divisions, otherwise we risk losing our competitiveness to neighbouring cities in the Greater Bay Area and other competing jurisdictions. The Government should address the land issue as soon as possible, and concentrate its resources on attracting talent, accelerating innovation development and rebuilding the city’s brand.
Focus On PRL
The Government has also conducted a review of private sports club leases. HKGCC’s comments on the proposals are below.
The Consultation Paper (CP) proposes a number of changes to the current policy on Private Recreational Leases, or PRLs. We appreciate that one of the objectives is to promote greater transparency and accountability of private sports clubs, given that the land that they operate on is heavily subsidised by the Government. We also recognise the need to address public conceptions that a scarce resource is being set aside for a minority of users.
These are understandable concerns, although we would suggest caution in making any changes.
Proposal 1: Renewal
Currently, with long term leases, there is an expectation that renewal will be the norm. Under the proposed changes, however, private sports clubs would be subject to more stringent criteria. The factors to be taken into account in deciding on lease renewal appear to be vague, arbitrary and subjective, which creates uncertainty for private sports clubs as to whether their leases will be renewed.
This means that clubs might think twice about investing in new facilities, existing members may decide not to renew their subscriptions and potential new members may be deterred from joining.
The Chamber is also concerned about the signal that this approach sends to the market and overseas investors, given that security and predictability of property rights are fundamental to Hong Kong’s reputation as a free market.
Proposal 2: Land premium
Currently, clubs under PRL pay only a nominal land premium. The CP proposes they should instead pay substantially more – one-third of the full market value of the site. We appreciate the rationale behind this proposal, which is to charge a “fair” fee. However, no other compelling reasons have been put forward.
It is hard to see how this can be considered a legitimate benefit to the development of sports in Hong Kong, as it is obvious that the less money private sports clubs have, the less they will be able to invest in facilities. The CP itself notes that the additional financial burden may result in the closure of some facilities.
If the intention is to achieve equity based on the ‘ability-to-pay’ principle, we suggest an alternative approach.
Under this option, private sports clubs could set aside a defined number of places for talented athletes who would not otherwise be able to pay for membership. These clubs could also provide sports scholarships to promising athletes.
These arrangements would be less disruptive than charging higher premiums – especially when the Government already enjoys a budget surplus – and would also be conducive to the goal of ensuring that public resources are generally accessible.
Proposal 3: Non-member access
We support the proposal to grant the public better access to private clubs. However, this could lead to a reduction in revenue from membership fees, as it may deter members from renewing or joining. This would in turn jeopardize the ability of the clubs to invest in sports facilities.
These effects would be exacerbated if the higher land premium policy was to be implemented. Sports clubs would likely need to raise their subscription fees, making membership even less attractive.
Private and Government-funded clubs play complementary roles in the development of sports in Hong Kong. Private sports club can play a bigger role in the development of sports, for example by setting aside places for talented athletes, as we have proposed.
We suggest that these ideas be considered in the interest of the overall well-being and viability of the different types of clubs in existence, and, more importantly, to offer the public a choice.
Fanling Golf Course
The current consultation exercises have given rise to intense debate on whether sites such as the Fanling Golf Course should be re-designated for housing.
The Task Force on Land Supply has proposed re-developing the course either partially (32 ha) or fully (172 ha). The former would allow the construction of some 4,600 homes while the latter would provide 13,200 additional units. However, it would require the uprooting of old trees, razing clan graves and the demolition of historic buildings. It would also require the relocation of the golf course as well as the loss of irreplaceable lowland natural habitat.
We believe that repurposing Fanling Golf Club for residential use scores poorly on a cost-to-benefit analysis. Furthermore, it would come at a hefty cost to Hong Kong both in the development of sports and liveability standards. We would not only lose the city’s only world-class golf course, but also an internationally recognized facility for training local talent. We welcome measures to support greater public access to private clubs such as the Fanling Golf Course, so more Hong Kong people can enjoy these facilities.