Moves on Hong Kong land supply step in right direction for city development
- Relaxed conditions on land exchanges should boost Hong Kong’s Northern Metropolis project and extension of land premium scheme is also welcome
Hong Kong’s insatiable appetite for development and growth has made boosting land supply a priority.
While the city is arguably not as land-strapped as it appears, projects often have to overcome rigid rules on zoning and uses to proceed.
Successive governments have talked about removing barriers and streamlining the process, though the pace is still painfully slow in some cases.
In another step to enhance development projects and land supply, the government has relaxed conditions on land exchanges for the Northern Metropolis in the New Territories and extended a standard rate land premium scheme to farmland and more industrial sites.
Under the revised land exchange arrangements for the Enhanced Conventional New Town Approach, the government may help an applicant with 90 per cent ownership of private land in a designated development site to acquire the remaining 10 per cent by compensating those affected under the land resumption law.
The applicant will be required to pay full market premium for the entire site, and build public facilities as specified by the authorities with a premium reduction.
The arrangements, officials believe, may speed up the Northern Metropolis and ensure better development layouts by leveraging market forces.
They may also reduce government upfront spending on land resumption and public works, and enable the Treasury to receive land premium revenue earlier.
Separately, redevelopment in the urban and rural area has also received a boost after the government decided to adopt a pilot scheme charging land premiums at standard rate for converting old industrial buildings and some farmland.
The premium, which will be adjusted annually, is expected to reduce negotiation times and provide more certainty on redevelopment projects.
The new initiative covers 10 zones in Yuen Long, North district and Tuen Mun, involving 24 cases of lease modification applications with a housing output of 8,500 units.
Whether the new measures will encourage more development projects amid a sluggish property market remains to be seen.
If the recent setbacks in government land sales and private property transactions are any guide, market sentiment remains cautious. But these policy adjustments are still conducive to more land supply and development in the longer term.
The government should continue to explore different measures to ensure more projects. This is especially important because the city’s land resources have yet to be fully utilised and some policies are still slowing the pace of implementation.
Hopefully, more positive steps will be made to speed up development that fulfils our needs.
