Solution to land scarcity: Effective lands assembly
This article appeared originally in the Ejinsight on 7 Sep, 2021.
Authors: Ryan Ip Man-ki, Head of Land and Housing Research and Jacqueline Hui, Researcher at Our Hong Kong Foundation.
To tackle the land shortage problem, the Lands Resumption Ordinance is often propounded as a panacea. However, whenever a large-scale development project is launched, opposition from stakeholders is inevitable even though lands resumption is conducted by the government. Stakeholders, including occupiers and landowners, often do not see eye to eye with the government on development. If the government has no alternative but to resort to lands resumption, it will turn out to be a drawn-out process to cater to all stakeholders, impeding the development progress.
Targeted solutions to alleviate discontent
Relocation and compensation arrangements for occupiers are the major obstacles in lands resumption. Occupiers’ discontent and opposition are often attributed to the denial of statutory compensation and changes in lifestyle. Occupiers can be roughly categorised into brownfield operators, squatter residents and farmers. To mitigate the aforementioned stakeholders’ frustration towards development projects, the government needs to customise relocation and compensation measures targeting each category of occupiers.
It is not uncommon to hear recommendations about reapportioning brownfields for other development, but brownfields in Hong Kong are not vacant premises. They provide operational space for various sectors, including logistics, construction and recycling industries. Hence, the relocation of brownfields requires comprehensive policies. Currently, planned development projects have already covered 800 hectares of brownfields and the number of affected workers is probably up to 26,000. However, under existing policies, brownfield operators are not entitled to “one-for-one replacement” as relocation arrangements. A logistics industry report previously published by Our Hong Kong Foundation (OHKF) mentions the establishment of logistics nodes to offer development space for different industries. OHKF also proposes establishing a statutory authority to promulgate comprehensive industrial policies.
It is expected that existing large-scale development projects will affect at least 3,700 squatter residents, who are entitled to a maximum of HKD1.2 million in cash compensation under current policies. That said, squatter residents may be upset about relocation arrangements as they are deprived of their spacious living environment. In view of this, it would be better for the government to adjust compensation policies. For instance, the government can grant squatter residents the freedom to choose between renting, purchasing and the option to rent-to-own newly established public housing at affordable prices. A freezing survey to determine the eligibility of affected persons should also be conducted at an early stage to expedite relocation.
At least 100 hectares of farmland are affected by the development projects in the New Territories (N.T.) and farmers can relocate their business through two channels. The first one is the Agricultural Land Rehabilitation Scheme, where farmers can be matched with suitable arable landowners, but the waiting process usually takes at least 5 years. The second option is to apply for operation in agricultural parks. Lamentably, the agri-parks are slow in development and small in scale, covering only 11 hectares of farmland in the first phase. Farmland issues are indeed similar to brownfields, involving policies related to the entire agricultural industry. The government should review agricultural policies to offer a clearer vision and development direction for the industry. Only through this can agri-parks serve as the focal point to promote agricultural technology and help upgrade local agriculture.
Land restructuring and land bonds to release private lands
There are approximately 6,400 hectares of privately owned farmland and brownfields in the N. T.. Although some of the lands are owned by major developers, the majority are Tso/Tong lands (commonly known as ancestral lands) or owned by small individual owners. These private lands are mostly characterised by fragmented ownership and irregular borders while small owners lack the resources to develop the lands on their own. Given the limited cooperation between private and public sectors, private lands long left idle are commonplace before their resumption by the government, after which part of the lands can be sold for private development. In addition to the Conventional New Town Approach, the government can consider reviewing the ex-gratia zonal compensation system to address owners’ grievances against lands resumption. Meanwhile, the government can also study different viable mechanisms, such as land bonds and land restructuring, to release lands that are currently not under any official plans for private development.
Land bonds can be issued to landowners as compensation other than cash to integrate public and private lands into spade-ready sites. After development, owners can use cash and land bonds to buy the spade-ready sites. Land bonds are akin to the previously adopted Land Exchange Entitlements, but further refinements are needed for execution, such as setting a validity period for redemption. Land bonds reflect landowners’ expectations towards the land and prevent the deprivation of owners’ right to develop the land on their own. It is believed that this can reduce their hostility towards lands resumption. Owners can also voluntarily return the vacant lands to the government for thorough planning or as land reserve.
To consolidate scattered land for proper development, the government can encourage cooperation from various parties through land readjustment. Under this scheme, landowners contribute their sites for the government’s comprehensive planning and development, which may involve changes to the sites’ area, borders, and locations. The government may construct public housing, community facilities and roads using some of the acquired lands. Even though the lands returned to the owners will be smaller in size, they are now more valuable as they become well-equipped with infrastructure. Land readjustment has been effective in countries including Japan, South Korea, Spain, among which Japan has spared around 3,700 km sq. of urban land area, equivalent to 3 times the Hong Kong’s total area.
Garner stakeholders’ support through various means
Without stakeholders’ cooperation, the progress of development projects is bound to be slow. While sparing no efforts in land development, the government ought to address stakeholders’ needs resourcefully. To satisfy stakeholders’ needs and enable the government to effectively handle land ownership issues, both foreign and local successful cases are worth learning from. Fresh impetus is required to catalyse land development.