On October 10, Chief Executive Carrie Lam announced in her second Policy Address, the land and housing strategies come as anticipated. Knight Frank agrees with the government's new initiative on land and housing supply and below is an analysis presented by the company's experts.
Land sharing pilot scheme
By adopting Public Private Partnerships (PPP), it brings long-term benefits to the Scheme, taking advantage of developers' project experience, lowering inputs and risk borne by the government. Given the inflexibility of the government's compensation mechanism, the application of PPP avoids the potential conflicts arising from private land resumption and other associated social issues. It expects that the development timeline of subsidised flats could be fast-tracked by 3 to 5 years through PPP, compared to "Land Resumption Ordinance".
As Hong Kong is currently facing the issue of land shortage for subsidised flat development, the government should create incentives to draw private participation from developers who own land reserves. It is suggested that the ratio of subsidised flats to total housing provision in the PPP proposals could be capped at 50%, to create sufficient private incentives for participating in the development of subsidised flats, and bring balance to communities. He advocates the government in adopting a positive approach to create a win-win
Civil Servants' Co-operative Building Society Scheme
In the past, it has been very difficult to redevelop Civil Servants' co-operative buildings, considering the high land premiums and age of the buildings. If the Urban Renewal Authority is invited to lead the redevelopment scheme, it is believed that it may speed up the pace of redevelopment. This will greatly facilitate the city's urban renewal and improve the living standards of the old districts.
<Enlarge> (Photo: CEDD)
Reclamation, artificial islands and East Lantau Metropolis
The development of East Lautau has a certain geographical advantage, together with the Greater Bay Area initiative, but it requires a long-term timetable. Reclamation and artificial islands are considered more desirable and feasible options.
The reclamation of non-natural coastlines outside Victoria Harbour and construction of artificial islands in the central waters can reduce the compensation problem. These proposals are capable of faster development time than other options, as they are simpler and more comprehensive solutions for future new towns. However, feasibility studies, technical and environmental impact assessments should be conducted by the government prior to implementation.
Though it is believed reclamation to be a stronger option for consideration, to increase Hong Kong's land supply in the long run, it is advocated that diverse planning, rather than the government relying too much on one or two approaches. Multiple options to increase land supply should be implemented simultaneously, and the government should also accelerate the implementation timeline.
Revitalisation of industrial buildings
Since 2010 there have been over 150 industrial buildings approved for usage conversion, with the majority being in Kowloon East and Kwai Tsuen area. We fully agree with the government's initiative to exercise flexibility in converting obsolete industrial buildings into transitional housing since on one hand this will supplement the housing insufficiency and on the other hand it will stimulate a more comprehensive system to support the growth of these newly formed features of the commercial landscape into more well-rounded and mature mixed-development areas."
The brownfield issue is a complex one that cannot be easily resolved and should therefore be handled with caution. In considering the potential influence on stakeholders and methods of attracting occupants to move out, it will inevitably involve certain compensation issues. Since the business nature of some existing brownfield operations is unique, relocating these operations will evolve similar financial and technical challenges, whether it is initiated by the government or the operators. However, the option of brownfield development can increase land supply in a shorter timeframe compared to other options, with the added benefit of existing support from the general public. We suggest that the government provide policy support to the affected brownfield operators to accelerate the implementation process of brownfield development.
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